S-1/A

As filed with the Securities and Exchange Commission on March 2, 2012.

Registration No. 333-174245

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No. 6
to

Form S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

Regional Management Corp.

(Exact Name of Registrant as Specified in its Charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 6141
(Primary Standard Industrial
Classification Code Number) 57-0847115
(I.R.S. Employer
Identification No.)

509 West Butler Road
Greenville, South Carolina 29607
Telephone: (864) 422-8011
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Thomas F. Fortin
Chief Executive Officer
Regional Management Corp.
509 West Butler Road
Greenville, South Carolina 29607
Telephone: (864) 422-8011
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Joshua Ford Bonnie
Lesley Peng
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Telephone: (212) 455-2000
Facsimile: (212) 455-2502 Colin J. Diamond
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Telephone: (212) 819-8200
Facsimile: (212) 354-8113

Approximate date of commencement of the proposed sale of the securities to the public: As soon as practicable after the Registration Statement is declared effective.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  o

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer þ Smaller reporting company o

(Do not check if a smaller reporting company)

CALCULATION OF REGISTRATION FEE

	PROPOSED MAXIMUM
TITLE OF EACH CLASS OF	AGGREGATE OFFERING	AMOUNT OF
SECURITIES TO BE REGISTERED	PRICE(1)(2)	REGISTRATION FEE
Common Stock, par value $0.10 per share	$100,000,000	$11,460(2)

⁽¹⁾ Estimated solely for the purpose of determining the amount of the registration fee in accordance with Rule 457(o) under the Securities Act of 1933.

⁽²⁾ Previously paid.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information contained in this preliminary prospectus is not complete and may be changed. We and the selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED MARCH 2, 2012

PRELIMINARY PROSPECTUS

           Shares

Common Stock

We are offering           shares of our common stock and the selling stockholders identified in this prospectus are offering           shares of our common stock. We will not receive any proceeds from the sale of shares by the selling stockholders. This is our initial public offering and no public market currently exists for our common stock. We expect the initial public offering price to be between $      and $      per share. Our common stock has been approved for listing on the New York Stock Exchange under the symbol “RM.”

Investing in our common stock involves a high degree of risk. Please read “Risk Factors” beginning on page 12 of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

	PER SHARE	TOTAL
Public Offering Price	$	$
Underwriting Discounts and Commissions	$	$
Proceeds to Regional Management Corp. before expenses	$	$
Proceeds to the selling stockholders before expenses	$	$

Delivery of the shares of common stock is expected to be made on or about           , 2012. The selling stockholders have granted the underwriters an option for a period of 30 days to purchase an additional           shares of our common stock solely to cover over-allotments. If the underwriters exercise the option in full, the total underwriting discounts and commissions payable by the selling stockholders will be $      , and the total proceeds to the selling stockholders, before expenses, will be $     .

Jefferies

JMP Securities Stephens Inc.

BMO Capital Markets

Prospectus dated          , 2012

Table of Contents

	Page
Summary	1
Risk Factors	12
Forward-Looking Statements	27
Use of Proceeds	28
Dividend Policy	29
Capitalization	30
Dilution	31
Unaudited Pro Forma Consolidated Financial Information	33
Selected Historical Consolidated Financial and Operating Data	36
Management’s Discussion and Analysis of Financial Condition and Results of Operations	38
Business	57
Management	75
Certain Relationships and Related Person Transactions	99
Principal and Selling Stockholders	102
Description of Capital Stock	105
Certain United States Federal Income and Estate Tax Consequences to Non-U.S. Holders	109
Shares Eligible for Future Sale	111
Underwriting (Conflicts of Interest)	113
Certain ERISA Considerations	117
Notice to Investors	118
Legal Matters	121
Experts	121
Where You Can Find More Information	121
Index to Financial Statements	F-1
EX-1.1
EX-10.2
EX-10.3.2
EX-23.1

We are responsible for the information contained in this prospectus and in any free writing prospectus we may authorize to be delivered to you. Neither we nor any of the selling stockholders have authorized anyone to provide you with additional or different information. We and the underwriters are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of shares of our common stock. This prospectus is not an offer to sell or solicitation of an offer to buy these shares of common stock in any circumstances under which the offer or solicitation is unlawful.

Unless the context suggests otherwise, references in this prospectus to “Regional,” the “Company,” “we,” “us” and “our” refer to Regional Management Corp. and its consolidated subsidiaries.

In this prospectus, we refer to Palladium Equity Partners III, L.P. and Parallel 2005 Equity Fund, LP, our current majority owners, as the “sponsors,” and we refer to the other owners of Regional Management Corp. as the “individual owners.” We refer the sponsors together with the individual owners as our “existing owners.” Palladium Equity Partners III, L.P. is an affiliate of Palladium Equity Partners, LLC, which we refer to, together with its affiliates, as “Palladium,” and Parallel 2005 Equity Fund, LP is an affiliate of Parallel Investment Partners, LLC, which we refer to, together with its affiliates, as “Parallel.”

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In this prospectus, references to “loans” (and corresponding references to “lending” and “lender”) include both direct loans and indirect loans. Direct loans are loans that are closed and funded directly by the financing provider. Indirect loans are closed and funded by a third party, such as an automobile dealer or a retailer, and subsequently purchased by the financing provider.

This prospectus includes market and industry data and forecasts that we have derived from publicly available information, various industry publications, other published industry sources and our internal data and estimates. Our internal data and estimates are based upon information obtained from trade and business organizations and other contacts in the markets in which we operate and our management’s understanding of industry conditions.

Unless indicated otherwise, the information included in this prospectus (1) assumes no exercise by the underwriters of the over-allotment option to purchase up to an additional           shares of common stock from the selling stockholders and (2) assumes that the shares of common stock to be sold in this offering are sold at $      per share of common stock, which is the midpoint of the price range indicated on the front cover of this prospectus.

Through and including          , 2012 (the 25th day after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This requirement is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

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SUMMARY

This summary highlights selected information contained elsewhere in this prospectus and does not contain all the information you should consider before investing in shares of our common stock. You should read this entire prospectus carefully, including the section entitled “Risk Factors” and the financial statements and the related notes included elsewhere in this prospectus, before you decide to invest in shares of our common stock.

Regional Management Corp.

We are a diversified specialty consumer finance company providing a broad array of loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies and other traditional lenders. We began operations in 1987 with four branches in South Carolina and have expanded our branch network to 170 locations with over 174,000 active accounts across South Carolina, Texas, North Carolina, Tennessee, Alabama and Oklahoma as of December 31, 2011. Each of our loan products is secured, structured on a fixed rate, fixed term basis with fully amortizing equal monthly installment payments and is repayable at any time without penalty. Our loans are sourced through our multiple channel platform, including in our branches, through direct mail campaigns, independent and franchise automobile dealerships, online credit application networks, furniture and appliance retailers and our consumer website. We operate an integrated branch model in which all loans, regardless of origination channel, are serviced and collected through our branch network, providing us with frequent in-person contact with our customers, which we believe improves our credit performance and customer loyalty. Our goal is to consistently and soundly grow our finance receivables and manage our portfolio risk while providing our customers with attractive and easy-to-understand loan products that serve their varied financial needs.

Our diversified product offerings include:

n   Small Installment Loans – We offer standardized small installment loans ranging from $300 to $2,500, with terms of up to 36 months, which are secured by non-essential household goods. We originate these loans both through our branches and through mailing “live checks” to pre-screened individuals who are able to enter into a loan by depositing these checks. As of December 31, 2011, we had approximately 137,000 small installment loans outstanding representing $130.3 million in finance receivables.

n   Large Installment Loans – We offer large installment loans through our branches ranging from $2,500 to $20,000, with terms of between 18 and 60 months, which are secured by a vehicle in addition to non-essential household goods. As of December 31, 2011, we had approximately 12,000 large installment loans outstanding representing $36.9 million in finance receivables.

n   Automobile Purchase Loans – We offer automobile purchase loans of up to $30,000, generally with terms of between 36 and 72 months, which are secured by the purchased vehicle. Our automobile purchase loans are offered through a network of dealers in our geographic footprint, including over 2,000 independent and approximately 740 franchise automobile dealerships as of December 31, 2011. Our automobile purchase loans include both direct loans, which are sourced through a dealership and closed at one of our branches, and indirect loans, which are originated and closed at a dealership in our network without the need for the customer to visit one of our branches. As of December 31, 2011, we had approximately 15,000 automobile purchase loans outstanding representing $128.7 million in finance receivables.

n   Furniture and Appliance Purchase Loans – We offer indirect furniture and appliance purchase loans of up to $7,500, with terms of between six and 48 months, which are secured by the purchased furniture or appliance. These loans are offered through a network of approximately 250 furniture and appliance retailers. Since launching this product in November 2009, our portfolio has grown to approximately 9,200 furniture and appliance purchase loans outstanding representing $10.7 million in finance receivables at December 31, 2011.

n   Insurance Products – We offer our customers optional payment protection insurance relating to many of our loan products.

Our revenue has grown from $56.6 million in 2007 to $105.2 million in 2011, representing a compound annual growth rate (“CAGR”) of 16.8%. Our net income from continuing operations has grown even more rapidly from $3.1 million in 2007 to $21.2 million in 2011, representing a CAGR of 61.7%. On a pro forma basis, giving effect to this offering and the application of the estimated net proceeds therefrom as described under “Use of Proceeds,” our net income would have been $      million in 2011. Our aggregate finance receivables have grown from

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$167.5 million as of December 31, 2007 to $306.6 million as of December 31, 2011, representing a CAGR of 16.3%.

Our Industry

We operate in the consumer finance industry serving the large and growing population of underbanked and other non-prime consumers who have limited access to credit from banks, thrifts, credit card companies and other traditional lenders. According to the FDIC, there were approximately 43 million adults living in underbanked households in the United States in 2009. Furthermore, difficult economic conditions in recent years have resulted in an increase in the number of non-prime consumers in the United States. While the number of non-prime consumers in the United States has grown, the supply of consumer credit to this demographic has contracted since deregulation of the U.S. banking industry in the 1980s. Tightened credit requirements that began during the recession in 2008 and 2009 further reduced the supply of consumer credit. According to the Federal Reserve Bank of New York, $1.4 trillion in consumer credit, including mortgages, home equity lines of credit, auto loans, credit cards and other forms of consumer credit, was removed from the credit markets between the second half of 2008 and the fourth quarter of 2011. We believe the large and growing number of potential customers in our target market, combined with the decline in available consumer credit, provides an attractive market opportunity for our diversified product offerings.

Installment Lending. Installment lending to underbanked and other non-prime consumers is one of the most highly fragmented sectors of the consumer finance industry. We believe that installment loans are provided through approximately 8,000 to 10,000 individually-licensed finance company branches in the United States. Providers of installment loans, such as Regional, generally offer loans with longer terms and lower interest rates than other alternatives available to underbanked consumers, such as title, payday and pawn lenders (“alternative financial services providers”).

Automobile Purchase Lending. Automobile finance comprises one of the largest consumer finance markets in the United States. According to CNW Research, originations by borrowers within the subprime market averaged $81.4 billion annually over the past ten years. In recent years, many providers of automobile financing have substantially curtailed their lending to subprime borrowers and as a result, subprime automobile purchase loan approval rates have dropped significantly from approximately 69% in early 2007 to approximately 11% at the end of 2011. This contraction in the supply of financing presents an attractive opportunity to provide a large, underserved population of borrowers with automobile purchase financing.

Furniture and Appliance Purchase Lending. The furniture and appliance industry represents a large consumer market with limited financing options for non-prime consumers. According to the U.S. Department of Commerce’s Bureau of Economic Analysis, personal consumption expenditures for household furniture were estimated at approximately $83.9 billion for 2011. Most furniture retailers do not provide their own financing, but instead partner with large banks and credit card companies who generally limit their lending activities to prime borrowers. As a result, non-prime customers often do not qualify for financing from these traditional lenders. Continued demand for furniture and appliances, combined with constraints on the availability of credit for non-prime consumers, presents a growth opportunity for furniture and appliance purchase loans.

Our Strengths

Integrated Branch Model Offers Advantages Over Traditional Lenders. Our branch network, with 170 locations across six states as of December 31, 2011, serves as the foundation of our multiple channel platform and the primary point of contact with our over 174,000 active accounts. All loans, regardless of origination channel, are serviced and collected through our branches, which allows us to maintain frequent, in-person contact with our customers, which we believe improves our credit performance and customer loyalty. Additionally, with over 70% of monthly payments made in-person at our branches, we have frequent opportunities to assess the borrowing needs of our customers and offer new loan products as their credit profiles evolve.

Multiple Channel Platform. We offer a diversified range of loan products through our multiple channel platform, which included, as of December 31, 2011:

n   170 branches across six states;

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n   a network of over 2,000 independent and approximately 740 franchise auto dealerships, which offer our loans to their customers;

n   our pre-screened live check mailings;

n   a network of approximately 250 furniture and appliance retailers, which offer our loans to their customers; and

n   our consumer website through which we facilitate loan applications.

We believe that our multiple channel platform provides us with a competitive advantage by giving us broader access to our customers and multiple avenues for attracting new customers, enabling us to grow our finance receivables, revenues and earnings.

Attractive Products for Customers with Limited Access to Credit. Our flexible loan products, ranging from $300 to $30,000 with terms between three and 72 months, incorporate features designed to meet the varied financial needs and credit profiles of a broad array of consumers. We believe that the rates on our products are significantly more attractive than many other available credit options, such as payday, pawn or title loans. We also differentiate ourselves from such alternative financial service providers by reporting our customers’ payment performance to credit bureaus, providing our customers the opportunity to improve their credit score and ultimately gain access to a wider range of credit options, including our own.

Demonstrated Organic Growth. Since December 31, 2007, we have grown our finance receivables by 83.0% from $167.5 million to $306.6 million at December 31, 2011 by expanding our branch network and developing new channels and products. From 2007 to 2011, we grew our year-end branch count from 96 branches to 170 branches, a CAGR of 15.4%, with an average annual same-store revenue growth rate of 14.7% during the same period. Historically, our branches have rapidly increased their outstanding finance receivables during the early years of operations and generally have quickly achieved profitability. We introduced direct automobile purchase loans in 1998, and have recently expanded our product offerings to include indirect automobile purchase loans. We opened two AutoCredit Source branches in early 2011 and two additional AutoCredit Source branches in early 2012, which focus solely on originating, underwriting and servicing indirect automobile purchase loans. As of December 31, 2011, we had established over 480 indirect dealer relationships through our AutoCredit Source branches. Gross loan originations from our live check program have grown from $52.5 million in 2008 to $143.1 million in 2011, a CAGR of 39.7%.

Consistent Portfolio Performance. Through over 24 years of experience in the consumer finance industry, we have established conservative and sound underwriting and lending practices. Our sound underwriting standards focus on our customers’ ability to affordably make payments out of their discretionary income with the value of pledged collateral serving as a credit enhancement rather than the primary underwriting criterion. Portfolio performance is improved by our regular in-person contact with customers at our branches which helps us to anticipate repayment problems before they occur and allows us to proactively work with customers to develop solutions prior to default, using repossession only as a last option. Despite the challenges posed by the sharp economic downturn beginning in 2008, our annual net charge-offs since January 1, 2007 have remained consistent, ranging from 6.3% to 8.6% of our average finance receivables. In 2011, our net charge-offs as a percentage of average finance receivables were 6.3%. Our loan loss provision as a percentage of total revenue for 2011 was 17.0%. We believe that our consistent portfolio performance demonstrates the resiliency of our business model throughout economic cycles.

Experienced Management Team. Our executive and senior operations management teams consist of individuals highly experienced in installment lending and other consumer finance services. We believe our executive management team’s experience has allowed us to consistently grow our business while delivering high-quality service to our customers and carefully managing our credit risk. The 21 members of our field management team average more than 24 years of industry experience.

Our Strategies

Grow Our Branch Network. We intend to continue growing the revenue and profitability of our branch network by increasing volume at our existing branches, opening new branches within our existing geographic footprint and expanding our operations into new states.

n   Existing Branches – We intend to continue increasing same-store revenues, which have grown an average of

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14.7% per annum for the five years ended December 31, 2011, by further building relationships in the communities in which we operate and capitalizing on opportunities to offer our customers new loan products as their credit profiles evolve. From 2007 to 2011, we opened 74 new branches, and we expect revenues at these branches will continue to grow faster than our overall same-store revenue growth rate as these branches mature.

n   New Branches – We believe there is sufficient demand for consumer finance services to continue our pattern of new branch growth and branch acquisitions in the states where we currently operate, allowing us to capitalize on our existing infrastructure and experience in these markets. Opening new branches allows us to generate both direct lending at the branches, as well as to create new origination opportunities by establishing relationships through the branches with automobile dealerships and furniture and appliance retailers in the community.

n   New States – We intend to explore opportunities for growth in several states outside our existing geographic footprint that enjoy favorable interest rate and regulatory environments. In December 2011, we opened our first branch in Oklahoma. In February 2012, we leased a location for a branch in New Mexico, and we are applying for a license to operate in New Mexico.

Continue to Expand and Capitalize on Our Diverse Channels and Products.  We intend to continue to reach new customers and offer our existing customers new loan products by expanding and capitalizing on our multiple channel platform and broad array of offerings as follows:

n   Automobile Purchase Loans – We have identified over 11,000 additional dealers in our existing geographic footprint. We have hired dedicated marketing personnel to develop relationships with these additional dealers to expand our network. We will also seek to capture a larger percentage of the financing activity of dealers in our existing network. We intend to continue expanding the number of franchise dealer relationships through our AutoCredit Source branches to grow our loan portfolio through increased penetration, and in January 2012, we opened two new AutoCredit Source branches in Texas.

n   Live Check Program – We continue to refine our screening criteria and tracking for direct mail campaigns, which we believe has enabled us to improve response rates and credit performance and allowed us to triple the annual number of live checks that we mailed from 2007 to 2011. We intend to continue to increase our use of live checks to grow our loan portfolio by adding new customers and creating opportunities to offer new loan products to our existing customers.

n	Furniture and Appliance Purchase Loans – We have identified over 3,400 additional furniture and appliance retail locations in our existing geographic footprint which offers us the opportunity to expand our network.
n	Online Sourcing – We intend to continue to develop and expand our online marketing efforts and increase traffic to our consumer website through the use of tools such as search engine optimization and paid online advertising.

Continue to Focus on Sound Underwriting and Credit Control.  We intend to continue to leverage our core competencies in sound underwriting and credit management developed through over 24 years of lending experience as we seek to profitably grow our share of the consumer finance market. In recent years, we have implemented several new programs to continue improving our underwriting standards and loan collection rates, including our branch “scorecard” program that systematically monitors a range of operating, credit quality and performance metrics. We believe the central oversight provided by our management information system and the scorecard program, combined with our branch-level servicing and collections, improves credit performance. We plan to continue to develop strategies to further improve our sound underwriting standards and loan collection rates as we expand.

Recent Developments

Acquisition of Alabama Branches. On January 20, 2012, we purchased approximately $28 million of consumer loan assets and 23 branches in Alabama. We expect to consolidate four of these branches into our existing locations, resulting in a net gain of 19 branches, which will bring our total number of branches in Alabama to 33 and provides us with locations in many attractive markets in central and Northern Alabama. The loans we acquired are similar to the loans that we originate in maturity and loan size and will be primarily classified as large installment loans in our financial statements. The loans that we acquired bear interest at rates that are reasonably comparable to the large installment loans we originate. We plan to expand the products offered through these branches to include our full range of loans, including our automobile purchase loans and furniture and appliance purchase loans.

Senior Revolving Credit Facility. On January 18, 2012, we amended our Third Amended and Restated Loan and Security Agreement dated as of March 21, 2007 (the “senior revolving credit facility”) to increase our borrowing availability by $30 million and extend its maturity to January 2015. Upon the completion of this offering, the

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interest rate will be reduced from one-month LIBOR (with a LIBOR floor of 1.00%) plus 3.25% to one-month LIBOR (with a LIBOR floor of 1.00%) plus 3.00%. Aggregate borrowing availability under the senior revolving credit facility now totals $255 million.

Risk Factors

An investment in shares of our common stock involves substantial risks and uncertainties that may adversely affect our business, financial condition and results of operations and cash flows that you should consider before you decide to participate in this offering. Some of the more significant risks relating to an investment in our company include the following:

n	We have grown significantly in recent years and our delinquency and charge-off rates and overall results of operations may be adversely affected if we do not manage our growth effectively;
n	We face significant risks in implementing our growth strategy some of which are outside our control;
n	We face strong direct and indirect competition;
n	Our business products and activities are strictly and comprehensively regulated at the local, state and federal level;
n	Changes in laws and regulations or interpretations of laws and regulations could negatively impact our business, results of operations and financial condition;
n	The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) authorizes the newly created Consumer Financial Protection Bureau (the “CFPB”) to adopt rules that could potentially have a serious impact on our ability to offer short-term consumer loans and have a material adverse effect on our operations and financial performance;
n	A substantial majority of our revenue is generated by our branches in South Carolina, Texas and North Carolina;
n	Our business could suffer if we are unsuccessful in making, continuing and growing relationships with automobile dealers and furniture and appliance retailers;
n	Regular turnover among our managers and other employees at our branches makes it more difficult for us to operate our branches and increases our costs of operations, which could have an adverse effect on our business, results of operations and financial condition;
n	Our live check direct mail strategy exposes us to certain risks; and
n	We face credit risk in our lending activities.

Please see “Risk Factors” for a discussion of these and other factors you should consider before making an investment in shares of our common stock.

Our Sponsors

On March 21, 2007, the majority of our outstanding common stock was acquired by Palladium Equity Partners III, L.P. and Parallel 2005 Equity Fund, LP, which we refer to as the “acquisition transaction.” Palladium is a middle market private equity firm with over $1 billion of assets under management focused primarily on growth buyout investments. Palladium principals have been actively involved in the investment of $1.5 billion of capital in approximately 50 portfolio companies since 1989 and have significant experience in financial services, business services, food, restaurants, healthcare, industrial and media businesses, including ABRA Auto Body & Glass, American Gilsonite Holding Company, Capital Contractors, Inc., Castro Cheese Holding Company, Jordan Health Services, Money Transfer Holdings, L.P., Taco Bueno Restaurants and Teasdale Quality Foods. Palladium was founded in 1997 and is headquartered in New York City. Parallel is a sector-focused, lower-middle market private equity firm that invests in entrepreneurial companies in North America. Since 1992, the principals of the firm have participated in investing over $600 million in over 35 companies, including Dollar Tree, Inc. (NASDAQ: DLTR), Hibbett Sports Inc. (NASDAQ: HIBB), Hat World, Inc. and Teavana Holdings, Inc. (NYSE: TEA). Founded in 1999 as an affiliate of middle market buyout firm Saunders Karp & Megrue, Parallel is headquartered in Dallas, Texas.

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Regional Management Corp. was incorporated in South Carolina on March 25, 1987 and converted into a Delaware corporation on August 23, 2011. Our principal executive offices are located at 509 West Butler Road, Greenville, South Carolina 29607 and our telephone number is (864) 422-8011. Our consumer website is located at www.GetRegionalCash.com. Information on or accessible through our website is not part of or incorporated by reference in this prospectus.

Throughout this prospectus, we refer to various trademarks, service marks and trade names that we use in our business. Other trademarks and service marks appearing in this prospectus are the property of their respective holders.

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THE OFFERING

Common stock offered by us            shares.

Common stock offered by the selling stockholders            shares (           shares if the underwriters exercise their over-allotment option in full).

Over-allotment option The selling stockholders have granted the underwriters a 30-day option to purchase up to           additional shares of our common stock at the initial public offering price, solely to cover over-allotments, if any.

Common stock outstanding after this offering            shares.

Use of proceeds We estimate that the net proceeds to us from this offering, after deducting the underwriting discount and estimated offering expenses payable by us, will be approximately $      million. We intend to use the net proceeds of this offering and cash on hand as follows:

n  to repay $      million of outstanding borrowings, plus accrued and unpaid interest, under the senior revolving credit facility;

n  to repay $25.8 million outstanding as of December 31, 2011, plus accrued and unpaid interest, under our Senior Subordinated Loan and Security Agreement, dated as of August 25, 2010 (the “mezzanine debt”), which is held by certain of our existing owners; and

	n  $1.1 million to make one-time payments to certain of our existing owners in the aggregate in consideration for the termination of our advisory and consulting agreements with them in accordance with their terms upon consummation of this offering as described under “Certain Relationships and Related Person Transactions – Advisory and Consulting Fees.”
	Any additional net proceeds will be applied to repay additional outstanding borrowings under our senior revolving credit facility. We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders. See “Use of Proceeds.”
Dividend policy	We have no current plans to pay dividends on our common stock in the foreseeable future.
Risk factors	See “Risk Factors” for a discussion of risks you should carefully consider before deciding to invest in our common stock.
New York Stock Exchange symbol	“RM”
Conflict of interest	We intend to use a portion of the net proceeds from this offering to repay amounts outstanding under our senior revolving credit facility. An affiliate of BMO Capital Markets Corp., an underwriter in this offering, is one of the lenders under our senior revolving credit facility. Because more than 5% of the proceeds of this offering, not including underwriting compensation, may be received by an affiliate of an underwriter in this offering depending on the final offering price

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per share, this offering is being conducted in compliance with FINRA Rule 5121, as administered by the Financial Industry Regulatory Authority, Inc. However, no qualified independent underwriter is needed for this offering because this offering meets the conditions set forth in FINRA Rule 5121(a)(1)(A). See “Use of Proceeds” and “Underwriting (Conflicts of Interest) – Affiliations and Conflicts of Interest.”

The number of shares of our common stock to be outstanding following this offering is based on 9,336,727 shares of our common stock outstanding as of December 31, 2011. In this prospectus, unless otherwise indicated, the number of shares of common stock outstanding and the other information based thereon does not reflect:

n   589,622 shares of our common stock issuable upon exercise of options at a weighted average exercise price of $5.4623 per share outstanding as of December 31, 2011 under the Regional Management Corp. 2007 Management Incentive Plan (our “2007 Stock Plan”) including options granted in 2007 and 2008; and

n   950,000 shares of common stock that have been reserved for issuance under the Regional Management Corp. 2011 Stock Incentive Plan (our “2011 Stock Plan”) including 280,000 shares issuable upon the exercise of stock options that we intend to grant to our executive officers and directors and 30,000 shares issuable upon the exercise of stock options that we intend to grant to our other employees, each at the time of this offering with an exercise price equal to the initial public offering price. See “Management – Compensation Discussion and Analysis – 2011 Stock Incentive Plan” and “– Actions Taken in 2012 and Anticipated Actions in Connection with the Offering.”

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SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL AND OPERATING DATA

The following table sets forth our summary historical and pro forma consolidated financial and operating data as of the dates and for the periods indicated, and should be read together with “Unaudited Pro Forma Consolidated Financial Information,” “Selected Historical Consolidated Financial and Operating Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical financial statements and related notes included elsewhere in this prospectus.

We derived the summary historical consolidated statement of income data for each of the years ended December 31, 2009, 2010 and 2011 and the summary historical consolidated balance sheet data as of December 31, 2010 and 2011 from our audited consolidated financial statements, which are included elsewhere in this prospectus. We have derived the summary historical consolidated statement of income data for each of the years ended December 31, 2007 and 2008 and the summary historical consolidated balance sheet data as of December 31, 2007, 2008 and 2009 from our audited financial statements, which are not included in this prospectus.

The summary unaudited pro forma consolidated statement of income for the fiscal year ended December 31, 2011 presents our consolidated results of operations giving pro forma effect to this offering and the application of the estimated net proceeds therefrom as described under “Use of Proceeds,” including a reduction in the interest rate under our senior revolving credit facility, which will take effect upon the completion of this offering, as if such transactions occurred on January 1, 2011. The summary unaudited pro forma consolidated balance sheet data as of December 31, 2011 presents our consolidated financial position giving pro forma effect to this offering and the application of the estimated net proceeds therefrom as described under “Use of Proceeds,” as if such transaction occurred on December 31, 2011. The pro forma adjustments are based on available information and upon assumptions that our management believes are reasonable in order to reflect, on a pro forma basis, the impact of these transactions on our historical financial information. The summary unaudited pro forma consolidated financial information is included for informational purposes only and does not purport to reflect our results of operations or financial position that would have occurred had we operated as a public company during the periods presented. The unaudited pro forma consolidated financial information should not be relied upon as being indicative of our results of operations or financial position had this offering and the application of the estimated net proceeds therefrom as

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described under “Use of Proceeds,” occurred on the dates assumed. The unaudited pro forma consolidated financial information also does not project our results of operations or financial position for any future period or date.

																UNAUDITED
																PRO
																FORMA
																YEAR
																ENDED
	YEAR ENDED DECEMBER 31,															DECEMBER 31,
	2007(1)			2008			2009			2010			2011			2011
	(Dollars in thousands, except for per share amounts)
Consolidated Statements of Income Data:
Revenue:
Interest and fee income	$	49,478		$	58,471		$	63,590		$	74,218		$	91,286		$	91,286
Insurance income, net, and other income		7,144			8,271			9,224			12,614			13,933			13,933
Total revenue		56,622			66,742			72,814			86,832			105,219			105,219
Expenses:
Provision for loan losses(2)		13,665			17,376			19,405			16,568			17,854			17,854
General and administrative expenses		22,950			27,862			29,120			33,525			40,634			40,634
Consulting and advisory fees		2,006			1,644			1,263			1,233			975			—
Interest expense:
Senior and other debt		8,687			7,399			4,846			5,542			8,306
Mezzanine debt		5,353			3,706			3,835			4,342			4,037			—
Total interest expense		14,040			11,105			8,681			9,884			12,343
Total expenses		52,661			57,987			58,469			61,210			71,806
Income before taxes and discontinued operations		3,961			8,755			14,345			25,622			33,413
Income taxes		857			2,276			4,472			9,178			12,169
Net income from continuing operations	$	3,104		$	6,479		$	9,873		$	16,444		$	21,244		$
Earnings per Share Data:
Basic earnings per share(3)				$	0.69		$	1.06		$	1.76		$	2.28		$
Diluted earnings per share(3)				$	0.68		$	1.03		$	1.70		$	2.21		$
Weighted average shares used in computing basic earnings per share(3)					9,336,727			9,336,727			9,336,727			9,336,727
Weighted average shares used in computing diluted earnings per share(3)					9,482,604			9,590,564			9,669,618			9,620,967
Consolidated Balance Sheet Data (at period end):
Finance receivables(4)	$	167,535		$	192,289		$	214,909		$	247,246		$	306,594		$
Allowance for loan losses(2)		(13,290	)		(15,665	)		(18,441	)		(18,000	)		(19,300	)
Net finance receivables(5)	$	154,245		$	176,624		$	196,468		$	229,246		$	287,294		$
Total assets		168,484			192,502			214,447			241,358			304,150
Total liabilities		159,079			176,095			187,807			197,914			239,271
Temporary equity(6)		12,000			12,000			12,000			12,000			12,000			—
Total stockholders’ equity		(2,595	)		4,407			14,640			31,444			52,879

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	YEAR ENDED DECEMBER 31,
	2007(1)			2008			2009			2010			2011
	(Dollars in thousands, except for per share amounts)
Selected Operational Data:
Average finance receivables(7)	$	146,265		$	178,159		$	192,981		$	216,022		$	264,012
Number of branches (at period end)		96			112			117			134			170
Cash flow from operations	$	17,990		$	26,654		$	31,232		$	41,215		$	41,048
Efficiency ratio(8)		40.5	%		41.7	%		40.0	%		38.6	%		38.6	%
Same-store finance receivables (at period end)(9)	$	163,945		$	184,087		$	212,804		$	236,717		$	272,602
Same-store revenue growth rate(9)		15.3	%		15.7	%		9.0	%		17.4	%		16.3	%
Same-store finance receivables growth rate(9)		16.6	%		9.9	%		10.7	%		10.1	%		10.3	%
Selected Asset Quality Data:
Number of loans (at period end)		99,089			110,895			128,285			148,813			174,482
Loan loss provision as a percentage of revenue		24.1	%		26.0	%		26.7	%		19.1	%		17.0	%
Loan loss provision as a percentage of average finance receivables		9.3	%		9.8	%		10.1	%		7.7	%		6.8	%
Net charge-offs as a percentage of average finance receivables		7.8	%		8.4	%		8.6	%		7.9	%		6.3	%
Over 90 days contractual delinquency rate		2.7	%		4.5	%		3.9	%		2.3	%		1.7	%
Over 180 days contractual delinquency rate		0.6	%		1.3	%		1.0	%		0.4	%		0.4	%

⁽¹⁾ On March 21, 2007, Palladium Equity Partners III, L.P. and Parallel 2005 Equity Fund, LP acquired the majority of our outstanding common stock. In connection with the acquisition transaction, we issued $25.0 million of mezzanine debt at an interest rate of 18.375%, plus related fees, which we refinanced in 2007 and again in 2010 with Palladium Equity Partners III, L.P. and certain of our individual owners. Additionally, we pay the sponsors annual advisory fees of $675,000 in the aggregate, and pay certain individual owners annual consulting fees of $450,000 in the aggregate, in each case, plus certain expenses. See “Certain Relationships and Related Person Transactions – Advisory and Consulting Fees.” We intend to repay the mezzanine debt with proceeds from this offering, and we expect to terminate the consulting and advisory agreements concurrent with this offering.

⁽²⁾ As of January 1, 2010, we changed our loan loss allowance methodology for small installment loans to determine the allowance using losses from the trailing eight months, rather than the trailing nine months, to more accurately reflect the average life of our small installment loans. The change from nine to eight months of average losses reduced the loss allowance for small installment loans by $1.1 million as of January 1, 2010 and reduced the provision for loan losses by $451,000 for 2010.

(3)	Prior to the acquisition transaction, we had a different capital structure, including a different number of shares of common stock outstanding. Accordingly, a comparison of earnings before the acquisition transaction is not meaningful.
(4)	Finance receivables equal the total amount due from the customer, net of unearned finance charges, insurance premiums and commissions.
(5)	Net finance receivables equal the total amount due from the customer, net of unearned finance charges, insurance premiums and commissions and allowance for loan losses.
(6)	The shareholders agreement among us, Regional Holdings LLC, the sponsors and the individual owners provides that the individual owners have the right to put their stock back to us if an initial public offering does not occur within five years of the date of the acquisition transaction, March 21, 2007. We valued this put option at the original purchase price of $12.0 million. The filing of the registration statement of which this prospectus forms a part relating to this offering makes it probable that the put option will not become exercisable.

⁽⁷⁾ Average finance receivables are computed using the most recent thirteen month-end balances for the annual periods shown.

(8)	Our efficiency ratio is calculated by dividing the sum of general and administrative expenses by total revenue.
(9)	All same-store measurements for any period are calculated based on stores that had been open for at least one year as of the end of the period.

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RISK FACTORS

An investment in shares of our common stock involves risks. You should carefully consider the following information about these risks, together with the other information contained in this prospectus, before investing in shares of our common stock.

Risks Related to Our Business

We have grown significantly in recent years and our delinquency and charge-off rates and overall results of operations may be adversely affected if we do not manage our growth effectively.

We have experienced substantial growth in recent years, opening or acquiring six branches in 2009, 17 in 2010 and 36 in 2011, and we intend to continue our growth strategy in the future. As we increase the number of branches we operate, we will be required to find new, or relocate existing, employees to operate our branches and allocate resources to train and supervise those employees. The success of a branch depends significantly on the manager overseeing its operations and on our ability to enforce our underwriting standards and implement controls over branch operations. Recruiting suitable managers for new branches can be challenging, particularly in remote areas and areas where we face significant competition. Furthermore, the annual turnover in 2011 among our branch managers was approximately 23%, and turnover rates of managers in our new branches may be similar or higher. Increasing the number of branches that we operate may divide the attention of our senior management or strain our ability to adapt our infrastructure and systems to accommodate our growth. If we are unable to promote, relocate or recruit suitable managers and oversee their activities effectively, our delinquency and charge-off rates may increase and our overall results of operations may be adversely impacted.

We face significant risks in implementing our growth strategy, some of which are outside our control.

We intend to continue our growth strategy, which is based on opening and acquiring branches in existing and new markets and introducing new products and channels. Our ability to execute this growth strategy is subject to significant risks, some of which are beyond our control, including:

n	the prevailing laws and regulatory environment of each state in which we operate or seek to operate, and, to the extent applicable, federal laws and regulations, which are subject to change at any time;
n	the degree of competition in new markets and its effect on our ability to attract new customers;
n	our ability to identify attractive locations for new branches;
n	our ability to recruit qualified personnel, in particular in remote areas and areas where we face a great deal of competition; and
n	our ability to obtain adequate financing for our expansion plans.

For example, North Carolina requires a “needs and convenience” assessment of a new lending license and location prior to the granting of the license, which adds time and expense to opening de novo locations. In addition, certain states into which we may expand, such as Georgia, limit the number of lending licenses granted. There can be no assurance that if we apply for a license for a new branch, whether in one of the states where we currently operate or in a state into which we would like to expand, we would be granted a license to operate. We also cannot be certain that any such license, even if granted, would be obtained in a timely manner or without burdensome conditions or limitations. In addition, we may not be able to obtain and maintain any regulatory approvals, government permits or licenses that may be required.

We face strong direct and indirect competition.

The consumer finance industry is highly competitive, and the barriers to entry for new competitors are relatively low in the markets in which we operate. We compete for customers, locations and other important aspects of our business with many other local, regional, national and international financial institutions, many of whom have greater financial resources than we do.

Our installment loan operations compete with other installment lenders as well as with alternative financial services providers (such as payday and title lenders, check advance companies and pawnshops), online or peer-to-peer lenders, issuers of non-prime credit cards and other competitors. We believe that future regulatory developments in the consumer finance industry may cause lenders that currently focus on alternative financial services to begin to offer installment loans. In addition, if companies in the installment loan business attempt to provide more attractive loan terms than is standard across the industry, we may lose customers to those competitors. In installment loans,

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we compete primarily on the basis of price, breadth of loan product offerings, flexibility of loan terms offered and the quality of customer service provided.

Our automobile purchase loan operations compete with numerous financial services providers, including non-prime auto lenders, dealers that provide financing, captive finance companies owned by automobile manufacturers and, to a limited extent, credit unions. Our furniture and appliance purchase loan operations compete with store and third-party credit cards, prime lending sources, rent-to-own finance providers and other competitors. Although the furniture and appliance purchase loan market includes few competitors serving non-prime borrowers, there are numerous competitors offering non-prime automobile purchase loans. For automobile purchase loans and furniture and appliance purchase loans, we compete primarily on the basis of interest rates charged, the quality of credit accepted, the flexibility of loan terms offered, the speed of approval and the quality of customer service provided.

If we fail to compete successfully, we could face lower sales and may decide or be compelled to materially alter our lending terms to our customers, which could result in decreased profitability.

A substantial majority of our revenue is generated by our branches in South Carolina, Texas and North Carolina.

Our branches in South Carolina accounted for 50.1% of our revenue in 2011. In addition, our branches in Texas and North Carolina accounted for 21.6% and 15.0%, respectively, of our revenue in 2011. Furthermore, all of our operations are in four Southeastern and two Southwestern states. As a result, we are highly susceptible to adverse economic conditions in those areas. For example, the unemployment rate in South Carolina, which was 9.5% in December 2011, is among the highest in the country. High unemployment rates may reduce the number of qualified borrowers to whom we will extend loans, which would result in reduced loan originations. Adverse economic conditions may increase delinquencies and charge-offs and decrease our overall loan portfolio quality. If any of the adverse regulatory or legislative events described in this “Risk Factors” section were to occur in South Carolina, Texas or North Carolina, it could materially adversely affect our business, results of operations and financial condition. For example, if interest rates in South Carolina, which are currently not capped, were to be capped, our business, results of operations and financial condition would be materially and adversely affected.

Our business could suffer if we are unsuccessful in making, continuing and growing relationships with automobile dealers and furniture and appliance retailers.

Our automobile purchase loans and furniture and appliance purchase loans are reliant on our relationships with automobile dealers and furniture and appliance retailers. In particular, our automobile purchase loan operations depend in large part upon our ability to establish and maintain relationships with reputable dealers who direct customers to our branches or originate loans at the point of sale, which we subsequently purchase. Although we have relationships with certain automobile dealers, none of our relationships are exclusive and some of them are newly established and they may be terminated at any time. As a result of the recent economic downturn and contraction of credit to both dealers and their customers, there has been an increase in dealership closures and our existing dealer base has experienced decreased sales and loan volume in the past and may experience decreased sales and loan volume in the future, which may have an adverse effect on our business, our results of operations and financial condition.

Our furniture and appliance purchase loan business model is based on our ability to enter into agreements with individual furniture and appliance retailers to provide financing to customers in their stores. Although our relationships with independent licensees of a major U.S. furniture retailer are currently a significant source of our furniture and appliance purchase loans, we do not have a relationship with the retailer itself or its manufacturing affiliate and instead depend on non-exclusive relationships with individual licensees of the retailer, each of which may be terminated at any time. If a competitor were to offer better service or more attractive loan products to our furniture and appliance retailer partners, it is possible that our retail partners would terminate their relationships with us. If we are unable to continue to grow our existing relationships and develop new relationships, our results of operations and financial condition and ability to continue to expand could be adversely affected.

Regular turnover among our managers and other employees at our branches makes it more difficult for us to operate our branches and increases our costs of operations, which could have an adverse effect on our business, results of operations and financial condition.

Our workforce is comprised primarily of employees who work on an hourly basis. In certain areas where we operate, there is significant competition for employees. In the past, we have lost employees and candidates to competitors who have been willing to pay higher compensation than we pay. Our ability to continue to expand our operations depends on our ability to attract, train and retain a large and growing number of qualified employees. The turnover

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among our all of our branch employees was approximately 43% in 2010 and 37% in 2011. This turnover increases our cost of operations and makes it more difficult to operate our branches. Our customer service representative and assistant manager roles have historically experienced high turnover. We may not be able to retain and cultivate personnel at these ranks for future promotion to branch manager. If our employee turnover rates increase above historical levels or if unanticipated problems arise from our high employee turnover and we are unable to readily replace such employees, our business, results of operations and financial condition and ability to continue to expand could be adversely affected.

We are subject to government regulations concerning our hourly and our other employees, including minimum wage, overtime and health care laws.

We are subject to applicable rules and regulations relating to our relationship with our employees, including minimum wage and break requirements, health benefits, unemployment and sales taxes, overtime and working conditions and immigration status. Legislated increases in the federal minimum wage and increases in additional labor cost components, such as employee benefit costs, workers’ compensation insurance rates, compliance costs and fines, as well as the cost of litigation in connection with these regulations, would increase our labor costs. Unionizing and collective bargaining efforts have received increased attention nationwide in recent periods. Should our employees become represented by unions, we would be obligated to bargain with those unions with respect to wages, hours and other terms and conditions of employment, which is likely to increase our labor costs. Moreover, as part of the process of union organizing and collective bargaining, strikes and other work stoppages may occur, which would cause disruption to our business. Similarly, many employers nationally in similar retail environments have been subject to actions brought by governmental agencies and private individuals under wage-hour laws on a variety of claims, such as improper classification of workers as exempt from overtime pay requirements and failure to pay overtime wages properly, with such actions sometimes brought as class actions and these actions can result in material liabilities and expenses. Should we be subject to employment litigation, such as actions involving wage-hour, overtime, break and working time, it may distract our management from business matters and result in increased labor costs. In addition, we currently sponsor employer-subsidized premiums for major medical programs for eligible salaried personnel and “mini-medical” (limited benefit) programs for eligible hourly employees who elect health care coverage through our insurance programs. As a result of regulatory changes, we may not be able to continue to offer health care coverage to our employees on affordable terms or at all. If we are unable to locate, attract, train or retain qualified personnel, or if our costs of labor increase significantly, our business, results of operations and financial condition may be adversely affected.

Our live check direct mail strategy exposes us to certain risks.

A significant portion of our growth in our small installment loans has been achieved through our direct mail campaigns, which involve mailing to pre-screened recipients “live checks,” which customers can sign and cash or deposit thereby agreeing to the terms of the loan, which are disclosed on the front and back of the check. We use live checks to seed new branch openings and attract new customers and those with higher credit in our geographic footprint. Loans initiated through live checks represented approximately one quarter of the value of our originated loans. We expect that live checks will represent a greater percentage of our small installment loans in the future. There are several risks associated with the use of live checks including the following:

n	it is more difficult to maintain sound underwriting standards with live check customers, and these customers have historically presented a higher risk of default than customers that originate loans in our branches, as we do not meet a live check customer prior to soliciting them and extending a loan to them, and we may not be able to verify certain elements of their financial condition, including their current employment status or life circumstances;
n	we rely on a software-based model and credit information from a third-party credit bureau that is more limited than a full credit report to pre-screen potential live check recipients, which may not be as effective or may be inaccurate or outdated;
n	we face limitations on the number of potential borrowers who meet our lending criteria within proximity to our branches;
n	we may not be able to continue to access the demographic and credit file information that we use to generate our mailing lists due to expanded regulatory or privacy restrictions;
n	live checks pose a greater risk of fraud as the live checks may be fraudulently replicated;
n	we depend on one bank to issue and clear our live checks and any failure by that bank to properly process the live checks could limit the ability of a recipient to cash the check and enter into a loan with us;
n	we sell clearly disclosed optional credit insurance products as part of our live check mailing campaigns;

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however, customers may subsequently claim that they did not receive sufficient explanation or notice of the insurance products that they purchased;

n	customers may opt out of direct mail solicitations and solicitations based on their credit file or may otherwise prohibit us from soliciting them; and
n	postal rates and piece printing rates may continue to rise.

Our expected increase in the use of live checks will further increase our exposure to, and the magnitude of, these risks.

A reduction in demand for our products and failure by us to adapt to such reduction could adversely affect our business and results of operations.

The demand for the products we offer may be reduced due to a variety of factors, such as demographic patterns, changes in customer preferences or financial conditions, regulatory restrictions that decrease customer access to particular products or the availability of competing products. For example, we are highly dependent upon selecting and maintaining attractive branch locations. These locations are subject to local market conditions, including the employment available in the area, housing costs, traffic patterns, crime and other demographic influences, any of which may quickly change. Should we fail to adapt to significant changes in our customers’ demand for, or access to, our products, our revenues could decrease significantly and our operations could be harmed. Even if we do make changes to existing products or introduce new products to fulfill customer demand, customers may resist or may reject such products. Moreover, the effect of any product change on the results of our business may not be fully ascertainable until the change has been in effect for some time and by that time it may be too late to make further modifications to such product without causing further harm to our business, results of operations and financial condition.

We may attempt to pursue acquisitions or strategic alliances, which may be unsuccessful.

We may attempt to achieve our business objectives through acquisitions and strategic alliances. We compete with other companies for these opportunities, including companies with greater financial resources, and we cannot be certain that we will be able to effect acquisitions or strategic alliances on commercially reasonable terms, or at all. Furthermore, the acquisitions that we have pursued previously have been significantly smaller than us. We do not have experience with integrating larger acquisitions, such as the Alabama branch acquisition. In pursuing these transactions, we may experience, among other things:

n	overvaluing potential targets due to limitations on our due diligence efforts;
n	difficulties in integrating any acquired companies, branches or products into our existing business, including integration of account data into our information systems;
n	inability to realize the benefits we anticipate in a timely fashion, or at all;
n	attrition of key personnel from acquired businesses;
n	unexpected losses due to the acquisition of existing loan portfolios with loans originated using less stringent underwriting criteria;
n	significant costs, charges or writedowns; or
n	unforeseen operating difficulties that require significant financial and managerial resources that would otherwise be available for the ongoing development and expansion of our existing operations.

We are exposed to credit risk in our lending activities.

Our ability to collect on loans depends on the willingness and repayment ability of our borrowers. Any material adverse change in the ability or willingness of a significant portion of our borrowers to meet their obligations to us, whether due to changes in economic conditions, the cost of consumer goods, interest rates, natural disasters, acts of war or terrorism, or other causes over which we have no control, would have a material adverse impact on our earnings and financial condition. Further, a substantial majority of our borrowers are non-prime borrowers, who are more likely to be affected, and more severely affected, by adverse macroeconomic conditions such as those that have persisted over the last few years. We generally consider customers with a Beacon score, a measure of credit provided by Equifax, below 645 to be non-prime borrowers, although we also consider factors other than Beacon scores in evaluating a potential customer’s credit, such as length of employment and duration of current residence. There is no industry standard definition of non-prime and, consequently, other lenders may use different criteria to identify non-prime customers. These criteria have not changed in the past three years. We cannot be certain that our

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credit administration personnel, policies and procedures will adequately adapt to changes in economic or any other conditions affecting customers and the quality of the loan portfolio.

We may be limited in our ability to collect on our loan portfolio and the security interests securing a significant portion of our loan portfolio are not perfected, which may increase our loan losses.

Legal and practical limitations may limit our ability to collect on our loan portfolio, resulting in increased loan losses, decreased revenues and decreased earnings. State and federal laws and regulations restrict our collection efforts.

All of our loan portfolio is secured, but a significant portion of such security interests have not been and will not be perfected. The amounts that we are able to recover from the repossession and sale of this collateral typically does not cover the outstanding loan balance and costs of recovery. In cases where we repossess a vehicle securing a loan, we sell our repossessed automobile inventory through public sales conducted by independent automobile auction organizations after the required post-repossession waiting period. There is approximately a 30-day period between the time we repossess a vehicle or other property and the time it is sold at auction. In certain instances, we may sell repossessed collateral other than vehicles through our branches after the required post-repossession waiting period and appropriate receipt of valid bids. The proceeds we receive from such sales depend upon various factors, including the supply of, and demand for, used vehicles and other property at the time of sale. During periods of economic slowdown or recession, such as have existed in the United States for much of the past few years, there may be less demand for used vehicles and other property.

Further, a significant portion of our loan portfolio is not secured by perfected security interests, including small installment loans and furniture and appliance purchase loans. The lack of perfected security interests is one of several factors that may make it more difficult for us to collect on our loan portfolio. During 2011, net charge-offs as a percentage of average finance receivables on our small installment loans, which are secured by unperfected interests in personal property, were 9.1%, while net charge-offs as a percentage of average finance receivables for our large installment loans and automobile purchase loans, which are secured by perfected interests in an automobile or other vehicle, for the same periods were 4.2%. Lastly, given the relatively small size of our loans, the costs of collecting loans may be high relative to the amount of the loan. As a result, many collection practices that are legally available, such as litigation, may be financially impracticable. These factors may increase our loan losses, which would have a material adverse effect on our results of operations and financial condition.

Our policies and procedures for underwriting, processing and servicing loans are subject to potential failure or circumvention, which may adversely affect our results of operations.

Most of our underwriting activities and our credit extension decisions are made at our local branches. We train our employees individually on-site in the branch to make loans that conform to our underwriting standards. Such training includes critical aspects of state and federal regulatory compliance, cash handling, account management and customer relations. Although we have standardized employee manuals, we primarily rely on our 17 district supervisors, with oversight by our state vice presidents, branch auditors and headquarters personnel, to train and supervise our branch employees, rather than centralized or standardized training programs. Therefore, the quality of training and supervision may vary from district to district and branch to branch depending upon the amount of time apportioned to training and supervision and individual interpretations of our operations policies and procedures. We cannot be certain that every loan is made in accordance with our underwriting standards and rules. We have in the past experienced some instances of loans extended that varied from our underwriting standards. Variances in underwriting standards and lack of supervision could expose us to greater delinquencies and charge-offs than we have historically experienced.

If our estimates of loan losses are not adequate to absorb actual losses, our provision for loan losses would increase, which would adversely affect our results of operations.

We maintain an allowance for loan losses for all loans we make. To estimate the appropriate level of loan loss reserves, we consider known and relevant internal and external factors that affect loan collectability, including the total amount of loans outstanding, historical loan charge-offs, our current collection patterns and economic trends. Our methodology for establishing our reserves for doubtful accounts is based in large part on our historic loss experience. If customer behavior changes as a result of economic conditions and if we are unable to predict how the unemployment rate, housing foreclosures and general economic uncertainty may affect our loan loss reserves, our provision may be inadequate. In 2011, our provision for loan losses was $17.9 million, and we had net charge-offs in 2011 of $16.6 million related to losses on our loans. As of December 31, 2011, our finance receivables were $306.6 million. Maintaining the adequacy of our allowance for loan losses may require that we make significant and unanticipated increases in our provisions for loan losses, which would materially affect our results of operations. Our

16

loan loss reserves, however, are estimates, and if actual loan losses are materially greater than our loan loss reserves, our financial condition and results of operations could be adversely affected. Neither state regulators nor federal regulators regulate our allowance for loan losses. Additional information regarding our allowance for loan losses is included in the section captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies – Loan Losses.”

Interest rates on automobile purchase and furniture and appliance purchase loans are determined at competitive market interest rates and we may fail to adequately set interest rates, which may adversely affect our business.

In recent years, we have expanded our automobile purchase loan business and our furniture and appliance purchase loan business and we plan to continue to expand those businesses in the future. Unlike installment loans, which in certain states are typically made at or near the maximum interest rates permitted by law, automobile purchase loans and furniture and appliance purchase loans are often made at competitive market interest rates, which are governed by laws for installment sales contracts. We have limited experience in determining interest rates in these markets. If we fail to set interest rates at a level that adequately reflects the credit risks of our customers, or if we set interest rates at a level too low to sustain our profitability, our business, results of operations and financial condition could be adversely affected.

Failure of third-party service providers upon which we rely could adversely affect our business.

We rely on certain third-party service providers. In particular, we currently rely on a single vendor to print and mail our live checks for our direct mail marketing campaigns. Our reliance on third parties such as this can expose us to risks. For example, an error by our previous live check vendor during 2010 resulted in checks being misdirected, requiring us in some cases to notify state regulators, refund certain interest and fee amounts and exposing us to increased credit risk. In addition, we do not have ongoing contracts with live check vendors, but instead enter into individual purchase orders for each of our campaigns. As a result, we have no contractual assurance that any particular vendor will be able or willing to provide these services to us on favorable terms. If any of our third-party service providers, including our live check vendors, are unable to provide their services timely and effectively, or at all, it could have a material adverse effect on our business, financial condition and results of operations and cash flows.

We depend to a substantial extent on borrowings under our senior revolving credit facility to fund our liquidity needs.

We have a senior revolving credit facility committed through January 2015 that allows us to borrow up to $255.0 million, assuming we are in compliance with a number of covenants and conditions. As of December 31, 2011, as adjusted to give effect to the offering and the application of the estimated net proceeds therefrom as described under “Use of Proceeds,” the amount outstanding under our senior revolving credit facility would have been $      million, and we would have had $      million of remaining availability thereunder out of a total availability of $      million based on our borrowing base as of December 31, 2011. During the year ended December 31, 2011, the maximum amount of borrowings outstanding under the facility at one time was $206.4 million. We use our senior revolving credit facility as a source of liquidity, including for working capital and to fund the loans we make to our customers. If our existing sources of liquidity become insufficient to satisfy our financial needs or our access to these sources becomes unexpectedly restricted, we may need to try to raise additional debt or equity in the future. If such an event were to occur, we can give no assurance that such alternate sources of liquidity would be available to us on favorable terms or at all. In addition, we cannot be certain that we will be able to replace the amended and restated senior revolving credit facility when it matures on favorable terms or at all. If any of these events occur, our business, results of operations and financial condition could be adversely affected.

We are not insulated from the pressures and potentially negative consequences of the recent financial crisis and similar risks beyond our control that have and may continue to affect the capital and credit markets, the broader economy, the financial services industry or the segment of that industry in which we operate.

We are subject to interest rate risk resulting from general economic conditions and policies of various governmental and regulatory agencies.

Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions and policies of various governmental and regulatory agencies and, in particular, the Federal Reserve Board. Changes in monetary policy, including changes in interest rates, could influence the amount of interest we pay on our senior revolving credit facility or any other floating interest rate obligations we may incur, which would increase our operating costs and decrease our operating margins. Interest payable on our senior revolving credit facility is variable, based on LIBOR with a LIBOR floor of 1.00% and could increase in the future. Although we have purchased interest rate caps on a $150.0 million notional amount to hedge such increases, these caps expire in

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2014 and we may not be able to replace these instruments when they mature on favorable terms or at all. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.” Furthermore, market conditions or regulatory restrictions on interest rates we charge may prevent us from passing any increases in interest rates along to our customers.

Our revolving credit agreement contains restrictions and limitations that could affect our ability to operate our business.

The credit agreement governing our senior revolving credit facility contains a number of covenants that could adversely affect our business and the flexibility to respond to changing business and economic conditions or opportunities. Among other things, these covenants limit our ability to:

n	incur or guarantee additional indebtedness;
n	purchase large loan portfolios in bulk;
n	pay dividends or make distributions on our capital stock or make certain other restricted payments;
n	sell assets, including our loan portfolio or the capital stock of our subsidiaries;
n	enter into transactions with our affiliates;
n	create or incur liens; and
n	consolidate, merge, sell or otherwise dispose of all or substantially all of our assets.

In addition, the credit agreement imposes certain obligations on us relating to our underwriting standards, recordkeeping and servicing of our loans, and our loss reserves and charge-off policies. It also requires us to maintain certain financial ratios, including an interest coverage ratio and a borrowing base ratio (calculated as the ratio of our unsubordinated debt to the sum of our adjusted tangible net worth and our subordinated debt).

If we were to breach any covenants or obligations under the credit agreement and such breaches were to result in an event of default, our lenders could cause all amounts outstanding to become due and payable, subject to applicable grace periods. This could trigger cross-defaults under any future debt instruments and materially and adversely affect our financial condition and ability to continue operating our business as a going concern. As of December 31, 2011 and upon amendment on January 18, 2012, we were in compliance with the covenants under our senior revolving credit facility and our mezzanine debt agreement.

If we lose the services of any of our key management personnel, our business could suffer.

Our future success significantly depends on the continued service and performance of our key management personnel. Competition for these employees is intense. The loss of the service of members of our senior management or key team members, including our state vice presidents, or the inability to attract additional qualified personnel as needed could materially harm our business. Our success depends, in part, on the continued service of our President and Chief Operating Officer, C. Glynn Quattlebaum, who is 65 years old and our Executive Vice President and Chief Financial Officer, Robert D. Barry, who is 68. Both of these executive officers are nearing the age of retirement.

We also depend on our 17 district supervisors to supervise, train and motivate our branch employees. These supervisors have significant experience with the company and would be difficult to replace. If we lose a district supervisor to a competitor, we could be at risk of losing other employees and customers despite the confidentiality agreements and non-solicitation agreements we have entered into with each employee.

We rely on information technology products developed, owned and supported by third parties, including our competitors.

We use a software package developed and owned by ParaData Financial Systems (“ParaData”), a wholly owned subsidiary of World Acceptance Corporation, one of our primary competitors, to record, document and manage our loans. Over the years we have tailored this software to meet our specific needs. We depend on the willingness and ability of ParaData to continue to provide customized solutions and support for our evolving products and business model. In the future, ParaData may not be able to modify the loan management software to meet our needs, or they could alter the program without notice to us or cease to adequately support it. ParaData could also decide in the future to refuse to provide support for its software to us on commercially reasonable terms, or at all. If any of these events were to occur, we would be forced to migrate to an alternative software package, which could materially affect our business, results of operations and financial condition.

We rely on DealerTrack, Route One, Teledata Communications Inc. and other third-party software vendors to provide access to loan applications and/or screen applications. There can be no assurance that these third party providers

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will continue to provide us information in accordance with our lending guidelines or that they will continue to provide us lending leads at all. If this occurs, our loan losses, business, results of operations and financial condition may be adversely affected.

Security breaches in our branches or in our information systems could adversely affect our financial conditions and results of operations.

All of our account payments occur at our branches, either in person or by mail, and frequently consist of cash payments, which we deposit at local banks throughout the day. This business practice exposes us daily to the potential for employee theft of funds or, alternatively, to theft and burglary due to the cash we maintain in the branch. Despite controls and procedures to prevent such losses, we have in the past sustained losses due to employee fraud and theft. In addition, our employees “field call” delinquent accounts by visiting the home or workplace of a delinquent borrower. Such visits may subject our employees to a variety of dangers including violence, vehicle accidents and other perils. A breach in the security of our branches or in the safety of our employees could result in employee injury and adverse publicity and could result in a loss of customer business or expose us to civil litigation and possible financial liability, any of which could have a material adverse effect on our financial condition and results of operations.

We rely heavily on communications and information systems to conduct our business. Each branch is part of an information network that is designed to permit us to maintain adequate cash inventory, reconcile cash balances on a daily basis and report revenues and expenses to our headquarters. Any failure, interruption or breach in security of these systems, including any failure of our back-up systems, could result in failures or disruptions in our customer relationship management, general ledger, loan and other systems and could result in a loss of customer business, subject us to additional regulatory scrutiny, or expose us to civil litigation and possible financial liability, any of which could have a material adverse effect on our financial condition and results of operations.

Our centralized headquarters’ functions are susceptible to disruption by catastrophic events, which could have a material adverse effect on our business, results of operations and financial condition.

Our headquarters buildings are located in Greenville, South Carolina. Our information systems and administrative and management processes are primarily provided to our branches from this centralized location, and our separate data management facility is located in the same city, and these processes could be disrupted if a catastrophic event, such as a tornado, power outage or act of terror, affected Greenville. Any such catastrophic event or other unexpected disruption of our headquarters or data management facility could have a material adverse effect on our business, results of operations and financial condition.

Risks Related to Regulation

Our business products and activities are strictly and comprehensively regulated at the local, state and federal level. Changes in current laws and regulations or in the interpretation of such laws and regulations could have a material adverse effect on our business, results of operations and financial condition.

Our business is subject to numerous local, state and federal laws and regulations. These regulations impose significant costs or limitations on the way we conduct or expand our business and these costs or limitations may increase in the future if such laws and regulations are changed. These laws and regulations govern or affect, among other things:

n	the interest rates that we may charge customers;
n	terms of loans, including fees, maximum amounts and minimum durations;
n	the number of simultaneous or consecutive loans and required waiting periods between loans;
n	disclosure practices, including posting of fees;
n	currency and suspicious activity reporting;
n	recording and reporting of certain financial transactions;
n	privacy of personal customer information;
n	the types of products and services that we may offer;
n	collection practices;
n	approval of licenses; and
n	locations of our branches.

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Our primary regulators are the state regulators for the states in which we operate: South Carolina, Texas, North Carolina, Tennessee, Alabama and Oklahoma. See “Business – Government Regulation.” We operate each of our branches under licenses granted to us by these state regulators. State regulators may enter our branches and conduct audits of our records and practices at any time, with or without notice. If we fail to observe, or are not able to comply with, applicable legal requirements, we may be forced to discontinue certain product offerings, which could adversely impact our business, results of operations and financial condition. In addition, violation of these laws and regulations could result in fines and other civil and/or criminal penalties, including the suspension or revocation of our branch licenses, rendering us unable to operate in one or more locations. All the states in which we operate have laws governing the interest rate and fees that we can charge and required disclosure statements, among other restrictions. Violation of these laws could involve penalties requiring the forfeiture of principal and/or interest and fees that we have charged. Depending on the nature and scope of a violation, fines and other penalties for noncompliance of applicable requirements could be significant and could have a material adverse effect on our business, results of operation and financial condition.

Licenses to open new branches are granted in the discretion of state regulators. Accordingly, licenses may be denied unexpectedly or for reasons outside our control. This could hinder our ability to implement our business plan in a timely manner or at all.

As we enter new markets and develop new products, we may become subject to additional state and federal regulations. For example, although we intend to expand into new states, we may encounter unexpected regulatory or other difficulties in these new states or markets, which may prevent us from growing in new states or markets. Similarly, while we intend to grow our furniture and appliance purchase and indirect automobile purchase loan operations, we may encounter unexpected regulatory or other difficulties. As a result, we may not be able to successfully execute our strategies to grow our revenue and earnings.

Changes in laws and regulations or interpretations of laws and regulations could negatively impact our business, results of operations and financial condition.

Although many of the laws and regulations applicable to our business have remained substantially unchanged for many years, the laws and regulations directly affecting our lending activities are under review and are subject to change, especially as a result of current economic conditions, changes in the make-up of the current executive and legislative branches and the political focus on issues of consumer and borrower protection. In addition, consumer advocacy groups and various other media sources continue to advocate for governmental and regulatory action to prohibit or severely restrict various financial products, including the loan products we offer.

Any changes in such laws and regulations could force us to modify, suspend or cease part or, in the worst case, all of our existing operations. It is also possible that the scope of federal regulations could change or expand in such a way as to preempt what has traditionally been state law regulation of our business activities. The enactment of one or more of such regulatory changes could materially and adversely affect our business, results of operations and prospects.

States may also seek to impose new requirements or interpret or enforce existing requirements in new ways. Changes in current laws or regulations or the implementation of new laws or regulations in the future may restrict our ability to continue our current methods of operation or expand our operations. Additionally, these laws and regulations could subject us to liability for prior operating activities or lower or eliminate the profitability of operations going forward by, among other things, reducing the amount of interest and fees we charge in connection with our loans. If these or other factors lead us to close our branches in a state, in addition to the loss of net revenues attributable to that closing, we would incur closing costs such as lease cancellation payments and we would have to write off assets that we could no longer use. If we were to suspend rather than permanently cease our operations in a state, we would also have continuing costs associated with maintaining our branches and our employees in that state, with little or no revenues to offset those costs.

We maintain a relationship with our primary regulator in each of the states in which we operate, participate in national and state industry associations and actively monitor the regulatory environment, and we are currently unaware of any specific proposal that would change the laws and regulations under which we operate in a manner material to our business.

In addition to state and federal laws and regulations, our business is subject to various local rules and regulations such as local zoning regulations. Local zoning boards and other local governing bodies have been increasingly

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restricting the permitted locations of other consumer finance companies, such as payday lenders and pawn shops. Any future actions taken to require special use permits for, or impose other restrictions on, our ability to provide products could adversely affect our ability to expand our operations or force us to attempt to relocate existing branches. If we were forced to relocate any of our branches, in addition to the costs associated with the relocation, we may be required to hire new employees in the new areas, which may adversely impact the operations of those branches. Relocation of an existing branch may also hinder our collection abilities, as our business model relies on the location of our branches being close to where our customers live in order to successfully collect on outstanding loans.

Changes in laws or regulations may have a material adverse effect on all aspects of our business in a particular state and on our overall business, results of operations and financial condition.

The Dodd-Frank Act authorizes the newly created CFPB to adopt rules that could potentially have a serious impact on our ability to offer short-term consumer loans and have a material adverse effect on our operations and financial performance.

Title X of the Dodd-Frank Act establishes the CFPB, which become operational on July 21, 2011. Under the Dodd-Frank Act, the CFPB has regulatory, supervisory and enforcement powers over providers of consumer financial products that we offer, including explicit supervisory authority to examine and require registration of installment lenders such as ourselves. Included in the powers afforded to the CFPB is the authority to adopt rules describing specified acts and practices as being “unfair,” “deceptive” or “abusive,” and hence unlawful. Specifically, the CFPB has the authority to declare an act or practice abusive if it, among other things, materially interferes with the ability of a consumer to understand a term or condition of a consumer financial product or service or takes unreasonable advantage of a lack of understanding on the part of the consumer of the product or service. Although the Dodd-Frank Act expressly provides that the CFPB has no authority to establish usury limits, some consumer advocacy groups have suggested that certain forms of alternative consumer finance products, such as installment loans, should be a regulatory priority and it is possible that at some time in the future the CFPB could propose and adopt rules making such lending or other products that we may offer materially less profitable or impractical. Further, the CFPB may target specific features of loans or loan practices, such as refinancings, by rulemaking that could cause us to cease offering certain products or engaging in certain practices. It is possible that the CFPB will adopt rules that specifically restrict refinancings of existing loans. Our refinancings of existing loans are divided into three categories: refinancings of loans in an amount greater than the original loan amount, renewals of existing loans that are current and renewals of existing loans that are delinquent, which represented 15.6%, 35.6% and 0.8%, respectively, of our loan originations in 2011. Any such rules could have a material adverse effect on our business, results of operation and financial condition. The CFPB could also adopt rules imposing new and potentially burdensome requirements and limitations with respect to any of our current or future lines of business, which could have a material adverse effect on our operations and financial performance. The Dodd-Frank Act also gives the CFPB the authority to examine and regulate entities it classifies as a “larger participant of a market for other consumer financial products or services.” The rule will likely cover only the largest installment lenders. We do not yet know whether the definition of larger participant will cover us. See “Business — Government Regulation — Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.”

In addition to the Dodd-Frank Act’s grant of regulatory powers to the CFPB, the Dodd-Frank Act gives the CFPB authority to pursue administrative proceedings or litigation for violations of federal consumer financial laws. In these proceedings, the CFPB can obtain cease and desist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of affirmative relief) and monetary penalties ranging from $5,000 per day for minor violations of federal consumer financial laws (including the CFPB’s own rules) to $25,000 per day for reckless violations and $1 million per day for knowing violations. If we are subject to such administrative proceedings, litigation, orders or monetary penalties in the future, this could have a material adverse effect on our operations and financial performance. Also, where a company has violated Title X of the Dodd-Frank Act or CFPB regulations under Title X, the Dodd-Frank Act empowers state attorneys general and state regulators to bring civil actions for the kind of cease and desist orders available to the CFPB (but not for civil penalties). If the CFPB or one or more state officials find that we have violated the foregoing laws, they could exercise their enforcement powers in ways that would have a material adverse effect on us.

Our stock price or results of operations could be adversely affected by media and public perception of installment loans and of legislative and regulatory developments affecting activities within the installment lending sector.

Consumer advocacy groups and various media sources continue to criticize alternative financial services providers (such as payday and title lenders, check advance companies and pawnshops). These critics frequently characterize

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such alternative financial services providers as predatory or abusive toward consumers. If these persons were to criticize the products that we offer, it could result in further regulation of our business. Furthermore, our industry is highly regulated, and announcements regarding new or expected governmental and regulatory action in the alternative financial services sector may adversely impact our stock price and perceptions of our business even if such actions are not targeted at our operations and do not directly impact us.

Risks Related to this Offering

There may not be an active trading market for shares of our common stock, which may cause shares of our common stock to trade at a discount from the initial offering price and make it difficult to sell the shares of common stock you purchase.

Prior to this offering, there has not been a public trading market for shares of our common stock. It is possible that after this offering an active trading market will not develop or continue or, if developed, that any market will be sustained which would make it difficult for you to sell your shares of common stock at an attractive price or at all. The initial public offering price per share of common stock will be determined by agreement among us and the representatives of the underwriters, and may not be indicative of the price at which shares of our common stock will trade in the public market after this offering.

If securities or industry analysts do not publish research or reports about our business, or if they downgrade their recommendations regarding our common stock, our stock price and trading volume could decline.

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. If any of the analysts who covers us downgrades our common stock or publishes inaccurate or unfavorable research about our business, our common stock price may decline. If analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our common stock price or trading volume to decline and our common stock to be less liquid.

The market price of shares of our common stock may be volatile, which could cause the value of your investment to decline.

Even if a trading market develops, the market price of our common stock may be highly volatile and could be subject to wide fluctuations. Securities markets worldwide experience significant price and volume fluctuations. This market volatility, as well as general economic, market or political conditions, could reduce the market price of shares of our common stock in spite of our operating performance. In addition, our operating results could be below the expectations of public market analysts and investors due to a number of potential factors, including variations in our quarterly operating results, additions or departures of key management personnel, failure to meet analysts’ earnings estimates, publication of research reports about our industry, litigation and government investigations, changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting our business, adverse market reaction to any indebtedness we may incur or securities we may issue in the future, changes in market valuations of similar companies or speculation in the press or investment community, announcements by our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments, adverse publicity about the industries we participate in or individual scandals, and in response the market price of shares of our common stock could decrease significantly. You may be unable to resell your shares of common stock at or above the initial public offering price.

In the past few years, stock markets have experienced extreme price and volume fluctuations. In the past, following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.

Investors in this offering will suffer immediate and substantial dilution.

The initial public offering price per share of common stock will be substantially higher than our pro forma net tangible book value per share immediately after this offering. As a result, you will pay a price per share of common stock that substantially exceeds the per share book value of our tangible assets after subtracting our liabilities. In addition, you will pay more for your shares of common stock than the amounts paid by our existing owners. Assuming an offering price of $      per share of common stock, which is the midpoint of the range on the front cover of this prospectus, you will incur immediate and substantial dilution in an amount of $      per share of common stock. See “Dilution.”

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Because we have no current plans to pay cash dividends on our common stock for the foreseeable future, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it.

We intend to retain future earnings, if any, for future operation, expansion and debt repayment and have no current plans to pay any cash dividends for the foreseeable future. The declaration, amount and payment of any future dividends on shares of common stock will be at the sole discretion of our board of directors. Our board of directors may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us and such other factors as our board of directors may deem relevant. In addition, our ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness we or our subsidiaries incur, including our senior revolving credit facility. As a result, you may not receive any return on an investment in our common stock unless you sell our common stock for a price greater than that which you paid for it.

You may be diluted by the future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise.

After this offering we will have approximately      million shares of common stock authorized but unissued. Our amended and restated certificate of incorporation to become effective immediately prior to the consummation of this offering authorizes us to issue these shares of common stock and options, rights, warrants and appreciation rights relating to common stock for the consideration and on the terms and conditions established by our board of directors in its sole discretion, whether in connection with acquisitions or otherwise. We have reserved 950,000 shares for issuance under our 2011 Stock Plan, including 280,000 shares issuable upon the exercise of stock options that we intend to grant to our executive officers and directors and 30,000 shares issuable upon the exercise of stock options that we intend to grant to our other employees, each at the time of this offering with an exercise price equal to the initial public offering price. See “Management – Compensation Discussion and Analysis – 2011 Stock Incentive Plan” and “– Actions Taken in 2012 and Anticipated Actions in Connection with the Offering.” Any common stock that we issue, including under our 2011 Stock Plan or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership held by the investors who purchase common stock in this offering.

If we or our existing investors sell additional shares of our common stock after this offering, the market price of our common stock could decline.

The sale of substantial amounts of shares of our common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. Upon consummation of this offering we will have a total of           shares of our common stock outstanding. Of the outstanding shares, the           shares sold in this offering (or           shares if the underwriters exercise their over-allotment option in full) will be freely tradable without restriction or further registration under the Securities Act of 1933, as amended (the “Securities Act”), except that any shares held by our affiliates, as that term is defined under Rule 144 of the Securities Act, may be sold only in compliance with the limitations described in “Shares Eligible for Future Sale.”

The remaining           shares, representing     % of our total outstanding shares of our common stock following this offering, will be subject to certain restrictions on resale following the consummation of this offering. We, our officers, directors and holders of substantially all of our outstanding shares of common stock immediately prior to this offering have signed lock-up agreements with the underwriters that will, subject to certain exceptions, restrict the sale of the shares of our common stock held by them for 180 days following the date of this prospectus, subject to extension in the case of an earnings release or material news or a material event relating to us. Jefferies & Company, Inc. may, in its sole discretion and without notice, release all or any portion of the shares of common stock subject to lock-up agreements. See “Underwriting (Conflicts of Interest)” for a description of these lock-up agreements.

Upon the expiration of the lock-up agreements described above, all of such           shares will be eligible for resale in a public market, subject, in the case of shares held by our affiliates, to volume, manner of sale and other limitations under Rule 144. We expect that each of the sponsors will be considered affiliates 180 days after this offering based on their expected share ownership (consisting of           shares owned by Palladium and           shares owned by Parallel assuming no exercise of the underwriters’ option to purchase additional shares), as well as their board nomination rights. Certain other of our shareholders may also be considered affiliates at that time. In addition, commencing 180 days following this offering, the holders of these shares of common stock will have the

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right, subject to certain exceptions and conditions, to require us to register their shares of common stock under the Securities Act, and they will have the right to participate in future registrations of securities by us. Registration of any of these outstanding shares of common stock would result in such shares becoming freely tradable without compliance with Rule 144 upon effectiveness of the registration statement. See “Shares Eligible for Future Sale.”

In addition,           shares of common stock will be eligible for sale upon exercise of vested options subject to the agreements described above. Following this offering, we intend to file one or more registration statements on Form S-8 under the Securities Act to register shares of common stock or securities convertible into or exchangeable for shares of common stock issued under or covered by our 2011 Stock Plan. Any such Form S-8 registration statements will automatically become effective upon filing. We expect that the initial registration statement on Form S-8 will cover           shares of common stock. Once these shares are registered, they can be sold in the public market upon issuance, subject to restrictions under the securities laws applicable to resales by affiliates.

As restrictions on resale end, the market price of our shares of common stock could drop significantly if the holders of these restricted shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of common stock or other securities.

We are controlled by our existing owners and our existing owners will exert significant influence over us after the completion of this offering, and their interests may not coincide with yours.

Immediately following this offering and the application of net proceeds from this offering, our existing owners will control approximately     % of our common stock (or     % if the underwriters exercise in full their over-allotment option). Accordingly, our existing owners will have substantial influence over election of the members of our board of directors, and thereby have substantial influence over our management and affairs. In addition, they will have substantial influence over the outcome of all matters requiring stockholder approval, including mergers and other material transactions, and may be able to cause or prevent a change in the composition of our board of directors or a change in control of our company that could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and might ultimately affect the market price of our common stock. We and our existing owners will also be party to an amended and restated shareholders agreement, as described below in “Certain Relationships and Related Person Transactions – Shareholders Agreement.”

We will be a “controlled company” within the meaning of the New York Stock Exchange rules and we will qualify for and may rely on exemptions from certain corporate governance requirements.

Our existing owners will continue to control a majority of the combined voting power of all classes of our voting stock upon completion of the offering of our common stock and we will be a “controlled company” within the meaning of the New York Stock Exchange corporate governance standards. Under these rules, a company of which more than 50% of the voting power is held by an individual, a group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements of the New York Stock Exchange, including (1) the requirement that a majority of the board of directors consist of independent directors, (2) the requirement that we have a nominating/corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities and (3) the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities. We intend to elect to rely on these exemptions. As a result, we may not have a majority of independent directors and our compensation and nominating and corporate governance committees may not consist entirely of independent directors. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the New York Stock Exchange.

Our amended and restated certificate of incorporation will contain a provision renouncing our interest and expectancy in certain corporate opportunities identified by the sponsors.

Our sponsors and their affiliates are in the business of providing buyout capital and growth capital to developing companies, and may acquire interests in businesses that directly or indirectly compete with certain portions of our business. Our amended and restated certificate of incorporation will provide for the allocation of certain corporate opportunities between us, on the one hand, and the sponsors, on the other hand. As set forth in our amended and restated certificate of incorporation, neither the sponsors, nor any director, officer, stockholder, member, manager or employee of the sponsors will have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate. Therefore, a director or officer of our company who also serves as a director, officer, member, manager or employee of the sponsors may pursue certain

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acquisition opportunities that may be complementary to our business and, as a result, such acquisition opportunities may not be available to us. These potential conflicts of interest could have a material adverse effect on our business, financial condition, results of operations or prospects if attractive corporate opportunities are allocated by the sponsors to themselves or their other affiliates instead of to us. The terms of our amended and restated certificate of incorporation are more fully described in “Description of Capital Stock – Corporate Opportunity.”

The requirements of being a public company may strain our resources and distract our management.

As a public company, we will be subject to the reporting requirements of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). These requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting. To maintain and improve the effectiveness of our disclosure controls and procedures, we will need to commit significant resources, hire additional staff and provide additional management oversight. We will be implementing additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies. In addition, sustaining our growth also will require us to commit additional management, operational and financial resources to identify new professionals to join our firm and to maintain appropriate operational and financial systems to adequately support expansion. These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. We expect to incur significant additional annual expenses related to these steps and, among other things, additional directors and officers liability insurance, director fees, reporting requirements, transfer agent fees, hiring additional accounting, legal and administrative personnel, increased auditing and legal fees and similar expenses.

We have not completed an assessment of internal controls over financial reporting as contemplated by Section 404 of the Sarbanes-Oxley Act, and failure to achieve and maintain effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and common stock price.

Because currently we do not have comprehensive documentation of our internal controls and have not yet tested our internal controls in accordance with Section 404, we cannot conclude in accordance with Section 404 that we do not have a material weakness in our internal controls or a combination of significant deficiencies that could result in the conclusion that we have a material weakness in our internal controls. If we are not able to complete our initial assessment of our internal controls and otherwise implement the requirements of Section 404 in a timely manner or with adequate compliance, our independent registered public accounting firm may not be able to certify as to the adequacy of our internal controls over financial reporting. We have contracted with a third party to assist us in performing a risk assessment of our internal controls over financial reporting, documenting key controls, determining entity level controls and developing a program for monitoring, testing and remediating internal control deficiencies over financial reporting and coordinating with our external auditors.

Matters impacting our internal controls may cause us to be unable to report our financial information on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC or violations of applicable stock exchange listing rules, and result in a breach of the covenants under our financing arrangements. There also could be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements. Confidence in the reliability of our financial statements also could suffer if we or our independent registered public accounting firm were to report a material weakness in our internal controls over financial reporting. This could materially adversely affect us and lead to a decline in the price of our common stock.

Anti-takeover provisions in our charter documents and applicable state law might discourage or delay acquisition attempts for us that you might consider favorable.

Our amended and restated certificate of incorporation and amended and restated bylaws to become effective immediately prior to the consummation of this offering will contain provisions that may make the acquisition of our company more difficult without the approval of our board of directors. Among other things, these provisions:

n	authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock;
n	prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;

25

n	provide that the board of directors is expressly authorized to make, alter, or repeal our bylaws and that our stockholders may only amend our bylaws with the approval of 80% or more of all of the outstanding shares of our capital stock entitled to vote; and
n	establish advance notice requirements for nominations for elections to our board or for proposing matters that can be acted upon by stockholders at stockholder meetings.

In addition, a Texas regulation requires the approval of the Texas Consumer Credit Commissioner for the acquisition, directly or indirectly, of 10% or more of the voting or common stock of a consumer finance company. The overall effect of this law, and similar laws in other states, is to make it more difficult to acquire a consumer finance company than it might be to acquire control of a nonregulated corporation.

Further, as a Delaware corporation, we are also subject to provisions of Delaware law, which may impair a takeover attempt that our stockholders may find beneficial. These anti-takeover provisions and other provisions under Delaware law could discourage, delay or prevent a transaction involving a change in control of our company, including actions that our stockholders may deem advantageous, or negatively affect the trading price of our common stock. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and to cause us to take other corporate actions you desire.

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FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements, which reflect our current views with respect to, among other things, our operations and financial performance. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. These statements include, but are not limited to, statements about:

n	our intention to expand our automobile and furniture purchase loan portfolios, expand our live check campaigns and continue to develop our online marketing;
n	our intention to increase volume at our existing branches, open new branches and enter new markets in the future;
n	our plans to develop new products in the future;
n	our intention to increase the number of customers we serve through expanding our channels and products;
n	our ability to maintain the quality of our asset portfolio and our plans to develop new underwriting and credit control strategies;
n	our belief that our capital expenditure requirements and liquidity needs will be met; and
n	our expectations about future dividends and our plans to retain any future earnings.

Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include but are not limited to those described under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Factors Affecting Our Results of Operations.” Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, results, actions, levels of activity, performance or achievements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this prospectus. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

27

USE OF PROCEEDS

We estimate that the net proceeds we will receive from this offering, after deducting the underwriting discount and estimated offering expenses payable by us, will be approximately $      million.

We intend to use the net proceeds from this offering and cash on hand as follows:

n   to repay $      million of outstanding borrowings, plus accrued and unpaid interest, under our senior revolving credit facility;

n   to repay $25.8 million outstanding as of December 31, 2011, plus accrued and unpaid interest, under our mezzanine debt, which is currently held by certain of our existing owners; and

n   $1.1 million to make one-time payments to certain of our existing owners in the aggregate in consideration for the termination of our advisory and consulting agreements with them in accordance with their terms upon consummation of this offering as described under “Certain Relationships and Related Person Transactions – Advisory and Consulting Fees.”

Any additional net proceeds will be applied to repay additional outstanding borrowings under our senior revolving credit facility.

A $1.00 increase in the assumed initial public offering price per share would increase the net proceeds we will receive from this offering by $      million, and an increase of 100,000 shares in the number of shares offered by us would increase the net proceeds we will receive from this offering by $      million, assuming in each case that all else is constant and after deducting the underwriting discount and estimated offering expenses payable by us. A $1.00 decrease in the assumed initial public offering price per share or a decrease of 1.0 million shares in the number of shares offered by us would result in equal changes in the opposite direction.

As of December 31, 2011, we had $25.8 million aggregate principal amount of mezzanine debt outstanding, which following our January 2012 amendment matures on March 31, 2015 and accrues interest at a rate of 15.25% per annum. The mezzanine debt was refinanced in August 2010, with the proceeds used to retire our previously existing mezzanine debt. As of December 31, 2011, we had $206.0 million aggregate principal amount outstanding under our senior revolving credit facility, which following our January 2012 amendment matures on January 18, 2015. Borrowings under the senior revolving credit facility bear interest at a rate equal to one-month LIBOR (with a LIBOR floor of 1.00%) plus 3.25% as of December 31, 2011 (which will be reduced by 25 basis points upon the completion of this offering). For additional information regarding our liquidity and outstanding indebtedness, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.”

We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders.

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DIVIDEND POLICY

Following completion of the offering, we have no current plans to pay any dividends on our common stock for the foreseeable future and instead currently intend to retain earnings, if any, for future operations and expansion and debt repayment.

The declaration, amount and payment of any future dividends on shares of common stock will be at the sole discretion of our board of directors. Our board of directors may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us and such other factors as our board of directors may deem relevant. In addition, our amended and restated senior revolving credit facility includes a restricted payment covenant, which restricts our ability to pay dividends on our common stock.

We did not declare or pay any dividends on our common stock in 2009, 2010 or 2011.

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CAPITALIZATION

The following table sets forth our capitalization as of December 31, 2011:

n   on a historical basis; and

n   on an as adjusted basis to give effect to the offering and the application of the estimated net proceeds therefrom as described under “Use of Proceeds,” as if each had occurred on December 31, 2011.

You should read this table together with the information contained in this prospectus, including “Use of Proceeds,” “Unaudited Pro Forma Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical consolidated financial statements and related notes included elsewhere in this prospectus.

	AS OF DECEMBER 31, 2011
	ACTUAL		AS ADJUSTED(1)
	(Dollars in thousands)
Long-term debt:
Mezzanine debt	$	25,814	$
Senior revolving credit facility(2)		206,009
Total long-term debt		231,823
Temporary equity(3):		12,000
Stockholders’ equity:
Common stock, par value $0.10 per share; 25,000,000 shares authorized and 9,336,727 shares issued and outstanding, actual; 1,000,000,000 shares authorized and           shares issues and outstanding, as adjusted		934
Additional paid-in capital(4)		28,150
Retained earnings(5)		23,795
Total stockholders’ equity		52,879
Total capitalization	$	296,702	$

⁽¹⁾ A $1.00 increase in the assumed initial public offering price per share would decrease total long-term debt by $      million, would increase additional paid-in capital by $      million and would increase total stockholders’ equity by $      million, assuming the number of shares offered by us remains the same and after deducting the underwriting discount and the estimated offering expenses payable by us. An increase of 100,000 shares in the number of shares offered by us would decrease total long-term debt by $      million, would increase additional paid-in capital by $      million, and would increase total stockholders’ equity by $      million, assuming the initial public offering price remains the same and after deducting the underwriting discount and estimated offering expenses payable by us. A $1.00 decrease in the assumed initial public offering price per share or a decrease of 100,000 shares in the number of shares offered by us would result in equal changes in the opposite direction.

⁽²⁾ Our senior revolving credit facility is a $255.0 million facility, as described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Financing Arrangements – Senior Revolving Credit Facility.” We intend to repay a portion of the borrowings under our senior revolving credit facility with a portion of the net proceeds from this offering.

(3)	The shareholders agreement among us, Regional Holdings LLC, the sponsors and the individual owners provides that the individual owners have the right to put their stock back to us if an initial public offering does not occur within five years of the date of the acquisition transaction, March 21, 2007. We valued this put option at the original purchase price of $12.0 million. The filing of the registration statement of which this prospectus forms a part relating to this offering makes it probable that the put option will not become exercisable.
(4)	Reflects (i) an adjustment for the estimated net proceeds to us from the offering less the par value recorded under common stock and (ii) the reclassification of temporary equity to additional paid-in capital as described in footnote 3 above.
(5)	Reflects the write-off of unamortized debt issuance costs related to the mezzanine debt.

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DILUTION

If you invest in shares of our common stock, your interest will be immediately diluted to the extent of the difference between the initial public offering price per share of common stock and the pro forma net tangible book value per share of common stock after this offering. Dilution results from the fact that the per share offering price of the shares of common stock is substantially in excess of the pro forma net tangible book value per share attributable to our existing owners.

Our net tangible book value as of December 31, 2011 was approximately $49.4 million, or $5.29 per share of common stock. Net tangible book value represents the amount of total tangible assets less total liabilities, and net tangible book value per share of common stock represents net tangible book value divided by the number of shares of common stock outstanding.

After giving effect to this offering and the application of the proceeds therefrom as described in “Use of Proceeds,” our pro forma net tangible book value as of December 31, 2011 would have been $      million, or $      per share of common stock. This represents an immediate increase in net tangible book value of $      per share of common stock to our existing owners and an immediate dilution in net tangible book value of $      per share of common stock to investors in this offering.

The following table illustrates this dilution on a per share of common stock basis:

Assumed initial public offering price per share of common stock			$
Net tangible book value per share of common stock as of December 31, 2011	$	5.29
Increase in net tangible book value per share of common stock attributable to investors in this offering
Pro forma net tangible book value per share of common stock after the offering
Dilution in net tangible book value per share of common stock to investors in this offering			$

A $1.00 increase in the assumed initial public offering price of $      per share of our common stock would increase our net tangible book value after giving to the offering by $      million, or by $      per share of our common stock, assuming the number of shares offered by us remains the same and after deducting the underwriting discount and the estimated offering expenses payable by us. A $1.00 decrease in the assumed initial public offering price per share would result in equal changes in the opposite direction.

The following table summarizes, on the same pro forma basis as of December 31, 2011, the total number of shares of common stock purchased from us, the total cash consideration paid to us and the average price per share of common stock paid by our existing owners and by new investors purchasing shares of common stock in this offering, assuming the underwriters do not exercise their over-allotment option.

							AVERAGE
							PRICE PER
	SHARES OF COMMON			TOTAL			SHARE OF
	STOCK PURCHASED			CONSIDERATION			COMMON
	NUMBER	PERCENTAGE		AMOUNT	PERCENTAGE		STOCK
	(In thousands)
Existing owners			%	$		%	$
Investors in this offering
Total			%	$		%	$

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Each $1.00 increase in the assumed offering price of $      per share would increase total consideration paid by investors in this offering and total consideration paid by all stockholders by $      million, assuming the number of shares offered by us remains the same and after deducting the underwriting discount and the estimated offering expenses payable by us. A $1.00 decrease in the assumed initial public offering price per share would result in equal changes in the opposite direction.

The dilution information above is for illustration purposes only. Our net tangible book value following the consummation of this offering is subject to adjustment based on the actual initial public offering price of our shares and other terms of this offering determined at pricing.

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UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

The unaudited pro forma consolidated statement of income for the fiscal year ended December 31, 2011 presents our consolidated results of operations giving pro forma effect to this offering and the application of the estimated net proceeds therefrom as described under “Use of Proceeds,” as if such transactions occurred at January 1, 2011. The unaudited pro forma consolidated balance sheet as of December 31, 2011 presents our consolidated financial position giving pro forma effect to this offering and the application of the estimated net proceeds therefrom as described under “Use of Proceeds,” as if such transactions occurred on December 31, 2011. The pro forma adjustments are based on available information and upon assumptions that our management believes are reasonable in order to reflect, on a pro forma basis, the impact of these transactions on our historical financial information.

The unaudited pro forma consolidated financial information should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical financial statements and related notes included elsewhere in this prospectus.

The unaudited pro forma consolidated financial information is included for informational purposes only and does not purport to reflect our results of operations or financial position had we operated as a public company during the periods presented. The unaudited pro forma consolidated financial information should not be relied upon as being indicative of our results of operations or financial position had this offering and the application of the estimated net proceeds therefrom as described under “Use of Proceeds” occurred on the dates assumed. The unaudited pro forma consolidated financial information also does not project our results of operations or financial position for any future period or date.

The pro forma adjustments give effect to:

n   the application of the proceeds from this offering as described under “Use of Proceeds” including:

–   the repayment of a portion of our outstanding indebtedness and the associated reduction in interest expense; and

–   the termination of our advisory agreement with the sponsors and consulting agreements with certain of the individual owners and the associated termination of consulting and advisory fees, each in accordance with its terms upon the consummation of this offering as described under “Certain Relationships and Related Person Transactions,” which termination does not result in any adjustment to our pro forma consolidated balance sheet;

n   the termination of the right of the individual owners to sell their stock back to us, which pursuant to the terms of the shareholders agreement among us, Regional Holdings LLC, the sponsors and the individual owners terminates upon the consummation of this offering;

n   the reduction in the interest rate on our senior revolving credit facility, which will take effect upon the completion of this offering; and

n   a recalculation of weighted average diluted shares outstanding using a value per share of $      rather than the value estimated in the historical financial statements.

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REGIONAL MANAGEMENT CORP.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 2011

			PRO FORMA
	ACTUAL		ADJUSTMENTS			PRO FORMA
	(In thousands, except share and per share data)
Revenue:
Interest and fee income	$	91,286	$	—		$	91,286
Insurance income, net		8,871		—			8,871
Other income		5,062		—			5,062
Total revenue		105,219		—			105,219
Expenses:
Provision for loan losses		17,854		—			17,854
General and administrative expenses
Personnel		25,462		—			25,462
Occupancy		6,527		—			6,527
Advertising		2,056		—			2,056
Other		6,589		—			6,589
Other expenses
Consulting and advisory fees		975		(975	)(1)		—
Interest expense:
Senior and other debt		8,306			(2)
Mezzanine debt		4,037		(4,037	)(3)		—
Total interest expense		12,343
Total expenses		71,806
Income before taxes		33,413
Income taxes		12,169			(4)
Net income	$	21,244	$			$
Basic earnings per share	$	2.28
Diluted earnings per share	$	2.21
Pro forma basic earnings per share						$
Pro forma diluted earnings per share						$
Weighted average basic shares outstanding		9,336,727
Weighted average diluted shares outstanding		9,620,967
Pro forma weighted average basic shares outstanding
Pro forma weighted average diluted shares outstanding

⁽¹⁾ Reflects the termination of the advisory agreement we entered into with each of the sponsors and the consulting agreements we entered into with certain of the individual owners, pursuant to which we paid the sponsors and the individual owners an aggregate of $1.0 million for the year ended December 31, 2011. These agreements will be terminated upon the consummation of this offering in accordance with their terms upon payment of one-time aggregate termination fees of $1.1 million.

⁽²⁾ Reflects reduction in interest expense of $      million as a result of repayment of $      million in aggregate principal amount of our senior revolving credit facility, offset in part by an unused line fee associated with our senior revolving credit facility of 0.50%. Also reflects a reduction in the interest rate under our senior revolving credit facility from one-month LIBOR (with a LIBOR floor of 1.00%) plus 3.25% to one-month LIBOR (with a LIBOR floor of 1.00%) plus 3.00%, which will take effect upon the completion of this offering.

⁽³⁾ Reflects reduction in interest expense of $4.0 million as a result of repayment of the $25.8 million in aggregate principal amount of our mezzanine debt. Our mezzanine debt accrues interest at a rate of 15.25% per annum.

⁽⁴⁾ Reflects an increase in income taxes of $      million as a result of the increase in income before taxes.

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REGIONAL MANAGEMENT CORP.

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

AS OF DECEMBER 31, 2011

				PRO FORMA
	ACTUAL			ADJUSTMENTS			PRO FORMA
	(In thousands, except share and per share data)
Assets
Cash	$	4,849		$			$
Gross finance receivables		387,494			—			387,494
Less unearned finance charges, insurance premiums and commissions		(80,900	)		—			(80,900	)
Finance receivables		306,594			—			306,594
Allowance for loan losses		(19,300	)		—			(19,300	)
Net finance receivables		287,294			—			287,294
Premises and equipment, net of accumulated depreciation		4,446			—			4,446
Deferred tax asset, net		15			—			15
Repossessed assets at net realizable value		409			—			409
Other assets		7,137				(1)(2)
Total assets	$	304,150		$			$
Liabilities and Stockholders’ Equity
Liabilities:
Cash overdraft	$	1		$	—		$	1
Accounts payable and accrued expenses		7,447			—			7,447
Senior revolving credit facility		206,009				(3)
Mezzanine debt		25,814			(25,814	)(4)		—
Total liabilities		239,271
Temporary equity		12,000			(12,000	)(5)		—
Stockholders’ equity:
Common stock, par value $0.10 per share; 25,000,000 shares authorized, and 9,336,727 shares issued and outstanding, actual; 1,000,000,000 shares authorized and        shares issued and outstanding, as adjusted		934				(6)
Additional paid-in capital		28,150				(7)
Retained earnings		23,795				(2)(8)
Total stockholders’ equity		52,879
Total liabilities and equity	$	304,150		$			$

⁽¹⁾ Reflects the reclassification of $      million of prepaid expenses relating to this offering.

⁽²⁾ Reflects the write off of unamortized debt issuance costs related to the mezzanine debt.

⁽³⁾ Reflects the repayment of $      million in aggregate principal amount under our senior revolving credit facility as described under “Use of Proceeds.”

⁽⁴⁾ Reflects the repayment of $25.8 million in aggregate principal amount of mezzanine debt as described under “Use of Proceeds.”

⁽⁵⁾ Reflects the reclassification of temporary equity to additional paid-in capital. The shareholders agreement between us, Regional Holdings LLC, the sponsors and the individual owners provides that the individual owners have the right to put their stock back to us if an initial public offering does not occur within five years of the date of acquisition, March 21, 2007. This right will be terminated upon the consummation of this offering.

⁽⁶⁾ Reflects an adjustment to common stock reflecting the par value for the common stock to be issued in this offering.

⁽⁷⁾ Reflects (i) an adjustment for the estimated net proceeds to us from this offering less the par value recorded under common stock as described in footnote 6 above and (ii) the reclassification of temporary equity to additional paid-in capital as described in footnote 5 above.

⁽⁸⁾ Reflects a payment of $1.1 million relating to termination of our advisory and consulting agreements with our existing owners.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA

The table sets forth our selected historical consolidated financial and operating data as of the dates and for the periods indicated, and should be read together with “Unaudited Pro Forma Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical consolidated financial statements and related notes included elsewhere in this prospectus.

We derived the selected historical consolidated statement of income data for each of the years ended December 31, 2009, 2010 and 2011 and the selected historical consolidated balance sheet data as of December 31, 2010 and 2011 from our audited consolidated financial statements, which are included elsewhere in this prospectus. We have derived the selected historical consolidated statement of income data for each of the years ended December 31, 2007 and 2008 and the selected historical consolidated balance sheet data as of December 31, 2007, 2008 and 2009 from our audited financial statements, which are not included in this prospectus.

	YEAR ENDED DECEMBER 31,
	2007(1)			2008			2009			2010			2011
	(Dollars in thousands, except per share data)
Consolidated Statements of Income Data:
Revenue:
Interest and fee income	$	49,478		$	58,471		$	63,590		$	74,218		$	91,286
Insurance income, net, and other income		7,144			8,271			9,224			12,614			13,933
Total revenue		56,622			66,742			72,814			86,832			105,219
Expenses:
Provision for loan losses(2)		13,665			17,376			19,405			16,568			17,854
General and administrative expenses		22,950			27,862			29,120			33,525			40,634
Consulting and advisory fees		2,006			1,644			1,263			1,233			975
Interest expense:
Senior and other debt		8,687			7,399			4,846			5,542			8,306
Mezzanine debt		5,353			3,706			3,835			4,342			4,037
Total interest expense		14,040			11,105			8,681			9,884			12,343
Total expenses		52,661			57,987			58,469			61,210			71,806
Income before taxes and discontinued operations		3,961			8,755			14,345			25,622			33,413
Income taxes		857			2,276			4,472			9,178			12,169
Net income from continuing operations	$	3,104		$	6,479		$	9,873		$	16,444		$	21,244
Earnings per Share Data:
Basic earnings per share				$	0.69		$	1.06		$	1.76		$	2.28
Diluted earnings per share(3)				$	0.68		$	1.03		$	1.70		$	2.21
Weighted average shares used in computing basic earnings per share(3)					9,336,727			9,336,727			9,336,727			9,336,727
Weighted average shares used in computing diluted earnings per share(3)					9,482,604			9,590,564			9,669,618			9,620,967
Consolidated Balance Sheet Data (at period end):
Finance receivables(4)	$	167,535		$	192,289		$	214,909		$	247,246		$	306,594
Allowance for loan losses(2)		(13,290	)		(15,665	)		(18,441	)		(18,000	)		(19,300	)
Net finance receivables(5)	$	154,245		$	176,624		$	196,468		$	229,246		$	287,294
Total assets		168,484			192,502			214,447			241,358			304,150
Total liabilities		159,079			176,095			187,807			197,914			239,271
Temporary equity(6)		12,000			12,000			12,000			12,000			12,000
Total stockholders’ equity		(2,595	)		4,407			14,640			31,444			52,879

⁽¹⁾ On March 21, 2007, Palladium Equity Partners III, L.P. and Parallel 2005 Equity Fund, LP acquired the majority of our outstanding common stock. In connection with the acquisition transaction, we issued $25.0 million of mezzanine debt at an interest rate of 18.375%, plus related fees, which we refinanced in 2007 and again in 2010 with Palladium Equity Partners III, L.P. and certain of our individual owners. Additionally, we pay the sponsors annual advisory fees of $675,000, in the aggregate and pay certain individual owners annual consulting fees of $450,000 in the aggregate, in each case, plus certain expenses. See “Certain Relationships and Related Person Transactions – Advisory and Consulting Fees.” We intend to repay the mezzanine debt in full with proceeds from this offering, and we expect to terminate the consulting and advisory agreements concurrent with this offering.

⁽²⁾ As of January 1, 2010, we changed our loan loss allowance methodology for small installment loans to determine the allowance using losses from the trailing eight months, rather than the trailing nine months, to more accurately reflect the average life of our small installment loans. The change from nine to eight months of average losses reduced the loss allowance for small installment loans by $1.1 million as of January 1, 2010 and reduced the provision for loan losses by $451,000 for 2010.

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(3)	Prior to the acquisition transaction, we had a different capital structure, including a different number of shares of common stock outstanding. Accordingly, a comparison of earnings before the acquisition transaction is not meaningful.
(4)	Finance receivables equal the total amount due from the customer, net of unearned finance charges, insurance premiums and commissions.
(5)	Net finance receivables equal the total amount due from the customer, net of unearned finance charges, insurance premiums and commissions and allowance for loan losses.
(6)	The shareholders agreement among us, Regional Holdings LLC, the sponsors and the individual owners provides that the individual owners have the right to put their stock back to us if an initial public offering does not occur within five years of the date of the acquisition transaction, March 21, 2007. We valued this put option at the original purchase price of $12.0 million. The filing of the registration statement of which this prospectus forms a part relating to this offering makes it probable that the put option will not become exercisable.

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MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read this discussion together with the consolidated financial statements, related notes and other financial information included in this prospectus. The following discussion may contain predictions, estimates and other forward-looking statements that involve a number of risks and uncertainties, including those discussed under “Risk Factors” and elsewhere in this prospectus. These risks could cause our actual results to differ materially from any future performance suggested below. Accordingly, you should read “Forward-Looking Statements” and “Risk Factors.”

As a result of a change in our methodology regarding the allowance for loan losses on January 1, 2010, the presentation of allowance for loan losses and provisions for loan losses for dates and periods prior to January 1, 2010 differs from later dates and periods. See “—Critical Accounting Policies—Loan Losses.”

Overview

We are a diversified specialty consumer finance company providing a broad array of loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies and other traditional lenders. We began operations in 1987 with four branches in South Carolina and have expanded our branch network to 170 locations with over 174,000 active accounts across South Carolina, Texas, North Carolina, Tennessee, Alabama and Oklahoma as of December 31, 2011. Each of our loan products is secured, structured on a fixed rate, fixed term basis with fully amortizing equal monthly installment payments and is repayable at any time without penalty. Our loans are sourced through our multiple channel platform, including in our branches, through direct mail campaigns, independent and franchise automobile dealerships, online credit application networks, furniture and appliance retailers and our consumer website. We operate an integrated branch model in which all loans, regardless of origination channel, are serviced and collected through our branch network, providing us with frequent in-person contact with our customers, which we believe improves our credit performance and customer loyalty. Our goal is to consistently and soundly grow our finance receivables and manage our portfolio risk while providing our customers with attractive and easy-to-understand loan products that serve their varied financial needs.

Our diversified product offerings include:

n   Small Installment Loans – As of December 31, 2011, we had approximately 137,000 small installment loans outstanding representing $130.3 million in finance receivables.

n   Large Installment Loans – As of December 31, 2011, we had approximately 12,000 large installment loans outstanding representing $36.9 million in finance receivables.

n   Automobile Purchase Loans – As of December 31, 2011, we had approximately 15,000 automobile purchase loans outstanding representing $128.7 million in finance receivables.

n   Furniture and Appliance Purchase Loans – As of December 31, 2011, we had approximately 9,200 furniture and appliance purchase loans outstanding representing $10.7 million in finance receivables.

n   Insurance Products – We offer our customers optional payment protection insurance options relating to many of our loan products.

Our primary sources of revenue are interest and fee income from our loan products, of which interest and fees relating to installment loans and automobile purchase loans have historically been the largest component. In 2009, we introduced furniture and appliance purchase loans and expanded our automobile purchase loans to offer loans through online credit application networks. In addition to interest and fee income from loans, we derive revenue from insurance products sold to customers of our direct loan products.

Factors Affecting Our Results of Operations

Our business is driven by several factors affecting our revenues, costs and results of operations, including the following:

Growth in Loan Portfolio. The revenue that we derive from interest and fees from our loan products is largely driven by the number of loans that we originate. Average finance receivables grew 8.3% from $178.2 million in 2008 to $193.0 million in 2009, grew 11.9% to $216.0 million in 2010, and grew 22.2% to $264.0 million in 2011. We originated 47,400, 55,300 and 67,300 new loans during 2009, 2010 and 2011, respectively. We source our loans

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through our branches and our live check program, as well as through automobile dealerships and furniture and appliance retailers that partner with us. Our loans are made exclusively in geographic markets served by our network of branches. Increasing the number of branches we operate allows us to increase the number of loans that we are able to service. We opened six, 17 and 36 new branches in 2009, 2010 and 2011, respectively. We opened two AutoCredit Source branches in early 2011 and two additional AutoCredit Source branches in Texas in January 2012. We have grown more rapidly in Tennessee and Alabama than in the other states in which we operate. We opened our first branch in Tennessee in 2007 and our first branch in Alabama in 2009. As of December 31, 2011, we operated 18 branches with a total of $15.2 million in finance receivables in Tennessee and 14 branches with a total of $11.9 million in finance receivables in Alabama.

Product Mix. We offer a number of different loan products, including small installment loans, large installment loans, automobile purchase loans and furniture and appliance purchase loans. We charge different interest rates and fees and are exposed to different credit risks with respect to the various types of loans we offer. For example, in recent years, we have sought to increase our product diversification by growing our automobile purchase and furniture and appliance purchase loans, which have lower interest rates and fees than our small and large installment loans but also have longer maturities and lower charge-off rates. Our product mix also varies to some extent by state. For example, small installment loans make up a smaller percentage of our loan portfolio in North Carolina than in the other states in which we operate because the rate structure in North Carolina is more favorable for larger loans. Small installment loans make up a larger percentage of our loan portfolio in Texas than our other loan products because our branches in Texas have historically focused on small installment loans. However, we expect to diversify our product mix in Texas in the future. The following table sets forth the finance receivables for each of our loan products as of the dates indicated:

	AS OF DECEMBER 31,
	2010					2011
			% OF					% OF
	FINANCE		TOTAL FINANCE			FINANCE		TOTAL FINANCE
	RECEIVABLES		RECEIVABLES			RECEIVABLES		RECEIVABLES
	(Dollars in thousands)
Small installment loans	$	117,599		47.6	%	$	130,257		42.5	%
Large installment loans		33,653		13.6	%		36,938		12.0	%
Automobile purchase loans		93,232		37.7	%		128,660		42.0	%
Furniture and appliance purchase loans		2,762		1.1	%		10,739		3.5	%
Total	$	247,246		100.0	%	$	306,594		100.0	%

Asset Quality. Our results of operations are highly dependent upon the strength of our asset portfolio. We recorded $19.4 million of provisions for loan losses during 2009 (or 10.1% as a percentage of average finance receivables), $16.6 million of provisions for loan losses during 2010 (or 7.7% as a percentage of average finance receivables) and $17.9 million of provisions for loan losses during 2011 (or 6.8% as a percentage of average finance receivables). The quality of our asset portfolio is the result of our ability to enforce sound underwriting standards, maintain diligent portfolio oversight and respond to changing economic conditions as we grow our loan portfolio.

Allowance for Loan Losses

Prior to January 1, 2010, management analyzed losses in the loan portfolio using two categories of loans: small installment loans (which included all loans of less than $2,500) and large loans (which included all other loans). Beginning January 1, 2010, we have evaluated losses in each of the four categories of loans in establishing the

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allowance for loan losses. The following tables provide reconciliations of the allowance for loan losses by portfolio segment for the years ended December 31, 2009, 2010 and 2011:

														ALLOWANCE AS
														PERCENTAGE
												FINANCE		OF FINANCE
	BALANCE									BALANCE		RECEIVABLES		RECEIVABLES
	JANUARY 1,				CHARGE-					DECEMBER 31,		DECEMBER 31,		DECEMBER 31,
	2009		PROVISION		OFFS			RECOVERIES		2009		2009		2009
Small installment loans	$	4,685	$	9,577	$	(6,345	)	$	166	$	8,083	$	102,651		7.9	%
Large loans		10,980		9,828		(10,657	)		207		10,358		112,258		9.2	%
Total	$	15,665	$	19,405	$	(17,002	)	$	373	$	18,441	$	214,909		8.6	%

														ALLOWANCE AS
														PERCENTAGE
												FINANCE		OF FINANCE
	BALANCE									BALANCE		RECEIVABLES		RECEIVABLES
	JANUARY 1,				CHARGE-					DECEMBER 31,		DECEMBER 31,		DECEMBER 31,
	2010		PROVISION		OFFS			RECOVERIES		2010		2010		2010
Small installment loans	$	8,083	$	10,664	$	(10,068	)	$	295	$	8,974	$	117,599		7.6	%
Large installment loans		2,719		2,780		(2,588	)		61		2,972		33,653		8.8	%
Automobile purchase loans		7,629		2,915		(4,738	)		103		5,909		93,232		6.3	%
Furniture and appliance purchase loans		10		209		(75	)		1		145		2,762		5.2	%
Total	$	18,441	$	16,568	$	(17,469	)	$	460	$	18,000	$	247,246		7.3	%

														ALLOWANCE AS
														PERCENTAGE
												FINANCE		OF FINANCE
	BALANCE									BALANCE		RECEIVABLES		RECEIVABLES
	JANUARY 1,				CHARGE-					DECEMBER 31,		DECEMBER 31,		DECEMBER 31,
	2011		PROVISION		OFFS			RECOVERIES		2011		2011		2011
Small installment loans	$	8,974	$	9,998	$	(10,522	)	$	388	$	8,838	$	130,257		6.8	%
Large installment loans		2,972		1,442		(2,042	)		76		2,448		36,938		6.6	%
Automobile purchase loans		5,909		6,014		(4,430	)		125		7,618		128,660		5.9	%
Furniture and appliance purchase loans		145		400		(153	)		4		396		10,739		3.7	%
Total	$	18,000	$	17,854	$	(17,147	)	$	593	$	19,300	$	306,594		6.3	%

Provisions for Loan Losses

In evaluating our allowance for loan losses, we currently separate our portfolio of receivables into four components based on loan type: small installment, large installment, automobile purchase, and furniture and appliance purchase. The allowance for small installment loans is based on the historic loss percentage computed by using the most recent eight months of losses applied to the most recent month-end balance of loans. The allowance for each other loan type is based on the historic loss percentage computed by using the most recent 12 months of losses applied to the most recent month-end balance of loans for each such loan type. We believe, therefore, that the primary underlying factor driving the provision for loan losses for each of these loan types is the same: general economic conditions in the areas in which we conduct business. In addition, gasoline prices and the market for repossessed automobiles at auction are an additional underlying factor that we believe influences the provision for loan losses for automobile purchase loans and, to a lesser extent, large installment loans. We monitor these factors

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and the monthly trend of delinquencies and the slow file (which consists of all loans one or more days past due) to identify trends that might require an increased provision and modify the provision for loan losses accordingly.

Distribution of Finance Receivables

The following table presents the distribution of our finance receivables by loan product and segregated by the final maturity of the loan as of December 31, 2011:

	WITHIN ONE		ONE YEAR TO
	YEAR		FIVE YEARS		AFTER FIVE YEARS		TOTAL
	(Dollars in thousands)
Small installment loans	$	69,769	$	60,488	$	—	$	130,257
Large installment loans		4,571		32,367		—		36,938
Automobile purchase loans		5,650		114,035		8,975		128,660
Furniture and appliance purchase loans		2,174		8,565		—		10,739
Total	$	82,164	$	215,455	$	8,975	$	306,594

The following table presents the distribution of our finance receivables by state and segregated by the final maturity of the loan as of December 31, 2011:

	WITHIN ONE		ONE YEAR TO
	YEAR		FIVE YEARS		AFTER FIVE YEARS		TOTAL
	(Dollars in thousands)
South Carolina	$	30,828	$	110,106	$	1,229	$	142,163
Texas		24,651		35,100		4,409		64,160
North Carolina		12,833		57,091		3,211		73,135
Tennessee		7,607		7,490		58		15,155
Alabama		6,156		5,665		68		11,889
Oklahoma		89		3		—		92
Total	$	82,164	$	215,455	$	8,975	$	306,594

All of our finance receivables have predetermined, or fixed, interest rates.

Interest Rates. Our costs of funds are affected by changes in interest rates. In particular, the interest rate that we pay on our senior revolving credit facility is a floating rate based on LIBOR. Although we have purchased interest rate caps to protect a notional amount of $150.0 million of our outstanding senior revolving credit facility should the three-month LIBOR exceed 6.0%, our cost of funding will increase if LIBOR increases. The interest rates that we charge on our loans are not significantly impacted by changes in market interest rates.

Efficiency Ratio. One of our key operating metrics is our efficiency ratio, which is calculated by dividing the sum of general and administrative expenses by total revenue. Our efficiency ratio has improved from 40.5% in 2007 to 38.6% in 2011 as a result of our focus on operating efficiencies and gains in productivity. Following this offering, we expect to incur new expenses associated with operating as a public company and potentially increased personnel expenses, which will tend to adversely affect our efficiency ratio.

Components of Results of Operations

Interest and Fee Income

Our interest and fee income consists primarily of interest earned on outstanding loans. We cease accruing interest on a loan when the customer is contractually past due 90 days. Accrual resumes when the customer makes at least one full payment and the account is less than 90 days contractually past due.

Loan fees are additional charges to the customer, such as loan origination fees, acquisition fees and maintenance fees, as permitted by state law. The fees may or may not be refundable to the customer in the event of an early payoff depending on state law. Fees are accreted to income over the life of the loan on the constant yield method and are included in the customer’s truth in lending disclosure. For the periods prior to January 1, 2010, management evaluated interest and fee income on an aggregate basis as opposed to by each loan product as management has done since January 1, 2010.

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The following table sets forth the composition of our average finance receivables and average yield for each of our loan products for the years ended December 31, 2010 and December 31, 2011:

	FOR THE YEAR ENDED DECEMBER 31,
	2010					2011
	AVERAGE FINANCE					AVERAGE FINANCE
	RECEIVABLES		AVERAGE YIELD			RECEIVABLES		AVERAGE YIELD
	(Dollars in thousands)
Small installment loans	$	96,014		47.6	%	$	111,440		49.3	%
Large installment loans		32,507		26.6	%		34,371		27.6	%
Automobile purchase loans		85,911		22.7	%		112,508		22.9	%
Furniture and appliance purchase loans		1,590		22.8	%		5,693		19.5	%
Total	$	216,022		34.4	%	$	264,012		34.6	%

Insurance Income

Our insurance income consists of revenue from the sale of various insurance products and other payment protection options offered to customers who obtain loans directly from us. We do not sell insurance to non-borrowers. The type and terms of our insurance products vary from state to state based on applicable laws and regulations. We offer optional credit life insurance, credit accident and health insurance and involuntary unemployment insurance. We require property insurance on any personal property securing loans and offer customers the option of providing proof of such insurance purchased from a third party (such as homeowners or renters insurance) in lieu of purchasing property insurance from us. We also require proof of liability and collision insurance for any vehicles securing loans, and we obtain collateral insurance on behalf of customers who permit their other insurance coverage to lapse.

We issue insurance certificates as agents on behalf of an unaffiliated insurance company and then remit to the unaffiliated insurance company the premiums we collect (net of refunds on paid out or renewed loans). The unaffiliated insurance company cedes life insurance premiums to our wholly-owned insurance subsidiary, RMC Reinsurance, Ltd. (“RMC Reinsurance”), as written and non-life premiums to RMC Reinsurance as earned. As of December 31, 2011, we had pledged an $1.3 million letter of credit to the unaffiliated insurance company to secure payment of life insurance claims. We maintain a cash reserve for life insurance claims in an amount determined by the unaffiliated insurance company. The unaffiliated insurance company maintains the reserves for non-life claims.

Other Income

Our other income consists primarily of late charges assessed on customers who fail to make a payment within a specified number of days following the due date of the payment (except on direct loans in North Carolina, which does not permit late charges on consumer loans). Other income also includes fees for extending the due date of a loan and returned check charges. Due date extensions are only available to a customer once every thirteen months, are available only to customers who are current on their loans and must be approved by personnel at our headquarters. Less than 1% of scheduled payments were deferred in 2011.

Provision for Loan Losses

Provisions for loan losses are charged to income in amounts that we judge as sufficient to maintain an allowance for loan losses at an adequate level to provide for losses on the related finance receivables portfolio. Loan loss experience, contractual delinquency of finance receivables, the value of underlying collateral, and management’s judgment are factors used in assessing the overall adequacy of the allowance and the resulting provision for loan losses. Our provision for loan losses fluctuates so that we maintain an adequate loan loss allowance that accurately reflects our estimates of losses in our loan portfolio. Therefore changes in our charge-off rates may result in changes to our provision for loan losses. While management uses the best information available to make its evaluation, future adjustments to the allowance may be necessary if there are significant changes in economic conditions or portfolio performance.

As of January 1, 2010, we changed our loan loss allowance methodology for small installment loans to determine the allowance using losses from the trailing eight months, rather than the trailing nine months, to more accurately reflect the average life of our small installment loans. The change in accounting estimate from nine to eight months of average losses reduced the loss allowance for small installment loans by $1.0 million as of January 1, 2010 and reduced the provision for loan losses by $0.5 million for 2010.

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General and Administrative Expenses

Our general and administrative expenses are comprised of four categories: personnel, occupancy, advertising and other. We typically measure our general and administrative expenses as a percentage of total revenue, which we refer to as our “efficiency ratio.”

Our personnel expenses are the largest component of our general and administrative expenses and consist primarily of the salaries, bonuses and benefits associated with all of our branch, field and headquarters employees and related payroll taxes. As described in “Management – Compensation Discussion and Analysis – Actions Taken in 2012 and Anticipated Actions in Connection with the Offering,” at the time of this offering, we intend to grant awards of stock options to purchase an aggregate of 280,000 shares of our common stock to our executive officers and directors and stock options to purchase an aggregate of 30,000 shares of our common stock to our other employees, each pursuant to the 2011 Stock Plan. Each stock option will have an exercise price equal to the initial public offering price per share in this offering, and will vest in five equal annual installments beginning on the first anniversary of the grant date. We expect to record deferred stock-based compensation expense equal to the grant-date fair value of the stock options issued of $     million, which will be recognized over the vesting period.

Our occupancy expenses consist primarily of the cost of renting our branches, all of which are leased, as well as the costs associated with operating our branches.

Our advertising expenses consist primarily of costs associated with our live check direct mail campaigns (including postage and costs associated with selecting recipients), maintaining our web site as well as telephone directory advertisements and some local advertising by branches. These costs are expensed as incurred.

Other expenses consist primarily of various other expenses including legal, audit, office supplies, credit bureau charges and postage.

We expect that our general and administrative expenses will increase as a result of the additional legal, accounting, insurance and other expenses associated with being a public company.

Consulting and Advisory Fees

Consulting and advisory fees consist of amounts payable to the sponsors and certain former major shareholders, who were members of our management before our acquisition by the sponsors, pursuant to the agreements described under “Certain Relationships and Related Party Transactions – Advisory and Consulting Fees.” These agreements will be terminated upon consummation of this offering.

Interest Expense

Our interest expense consists primarily of interest payable and amortization of debt issuance costs in respect of borrowings under our senior revolving credit facility and our mezzanine debt. Interest expense also includes costs attributable to the interest rate caps we enter into to manage our interest rate risk. Changes in the fair value of the interest rate cap are reflected in interest expense for the senior and other debt. We intend to repay the mezzanine debt and a portion of the borrowings under our senior revolving credit facility with proceeds from this offering. We entered into an amended and restated senior revolving credit facility in January 2012. See “Recent Developments — Senior Revolving Credit Facility” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.”

Income Taxes

Incomes taxes consist primarily of state and federal income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effects of future tax rate changes are recognized in the period when the enactment of new rates occurs.

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Results of Operations

The following table summarizes key components of our results of operations for the periods indicated both in dollars and as a percentage of total revenue:

	YEAR ENDED DECEMBER 31,
	2009					2010					2011
			% OF					% OF					% OF
	AMOUNT		REVENUE			AMOUNT		REVENUE			AMOUNT		REVENUE
	(In thousands, except percentages)
Revenue:
Interest and fee income	$	63,590		87.3	%	$	74,218		85.5	%	$	91,286		86.8	%
Insurance income, net		5,229		7.2	%		8,252		9.5	%		8,871		8.4	%
Other income		3,995		5.5	%		4,362		5.0	%		5,062		4.8	%
Total revenue		72,814		100.0	%		86,832		100.0	%		105,219		100.0	%
Expenses:
Provision for loan losses		19,405		26.7	%		16,568		19.1	%		17,854		17.0	%
General and administrative expenses:
Personnel		18,991		26.1	%		20,630		23.8	%		25,462		24.1	%
Occupancy		4,538		6.2	%		5,165		5.9	%		6,527		6.2	%
Advertising		1,212		1.7	%		2,027		2.3	%		2,056		2.0	%
Other		4,379		6.0	%		5,703		6.6	%		6,589		6.3	%
Consulting and advisory fees		1,263		1.7	%		1,233		1.4	%		975		0.9	%
Interest expense:
Senior and other debt		4,846		6.6	%		5,542		6.4	%		8,306		7.9	%
Mezzanine debt		3,835		5.3	%		4,342		5.0	%		4,037		3.8	%
Total interest expense		8,681		11.9	%		9,884		11.4	%		12,343		11.7	%
Total expenses		58,469		80.3	%		61,210		70.5	%		71,806		68.2	%
Income before taxes		14,345		19.7	%		25,622		29.5	%		33,413		31.8	%
Income taxes		4,472		6.1	%		9,178		10.6	%		12,169		11.6	%
Net income	$	9,873		13.6	%	$	16,444		18.9	%	$	21,244		20.2	%

Year Ended December 31, 2011 Compared to Year Ended December 31, 2010

Interest and Fee Income

Interest and fee income increased $17.1 million, or 23.0%, to $91.3 million in 2011 from $74.2 million in 2010. The increase in interest and fee income was due primarily to a 22.2% increase in average finance receivables in 2011 as compared to 2010 and an increase in the average yield on loans from 34.4% to 34.6%. The following

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table sets forth the portions of the increase in interest and fee income attributable to changes in finance receivables balance and average yield for each of our products for 2011 compared to 2010:

	YEAR ENDED
	DECEMBER 31, 2011 COMPARED TO
	YEAR ENDED
	DECEMBER 31, 2010 INCREASE
	(DECREASE)
	(Dollars in thousands)
	VOLUME			RATE			NET
Small installment loans			$7,557	$	1,614		$	9,171
Large installment loans		485			351			836
Automobile purchase loans		5,960			353			6,313
Furniture and appliance purchase loans		807			(59	)		748
Total			$14,809	$	2,259		$	17,068

The following is a discussion of the changes by product type:

n   Small Installment Loans – Average small installment loans outstanding increased $15.4 million in 2011 compared to 2010. The increase in receivables is primarily attributable to opening 36 new branch locations in 2011 compared to 17 in 2010. Additionally, the amount of live checks cashed in 2011 was $20.1 million greater than 2010. The average yield on small installment loans increased by 1.7% from 47.6% in 2010 to 49.3% in 2011.

n   Large Installment Loans – Average large installment loans outstanding increased $1.9 million in 2011 compared to 2010 while the average yield increased by 1.0% resulting in an increase in interest income of $836,000.

n   Automobile Purchase Loans – Average automobile purchase loans outstanding increased $26.6 million in 2011 compared to 2010. The launching of our AutoCredit Source brand and improvements in our approval process contributed to the increase. The increase in average loans was combined with a modest 26 basis point increase in the average yield and resulted in an increase in revenue of $6.3 million.

n   Furniture and Appliance Purchase Loans – Average furniture and appliance purchase loans outstanding increased $4.1 million in 2011 compared to 2010. The increase is attributable to the new relationships we established with furniture and appliance retailers as well as an expansion of volume through our existing relationships.

Insurance Income

Insurance income increased $619,000, or 7.5%, to $8.9 million in 2011 from $8.3 million in 2010. Although insurance income increased in 2011 as compared to 2010, insurance income as a percentage of average finance receivables declined from 3.8% to 3.4%. In 2010, our insurance partner refunded $570,000 to us. Without this refund, insurance income in 2010 would have been 3.6% of average finance receivables. We expect that insurance income as a percentage of average finance receivables will decline with the growth of our indirect automobile purchase loan and furniture and appliance purchase loan businesses as they do not provide us the opportunity to offer insurance products to customers.

Other Income

Other income increased $700,000, or 16.0%, to $5.1 million in 2011 from $4.4 million in 2010. The largest component of other income is late charges, which increased $353,000, or 12.6%, to $3.2 million in 2011 from $2.8 million in 2010 as a result of our higher average finance receivables in 2011. However, late charges as a percentage of average finance receivables declined slightly in 2011 as compared to 2010 as a result of lower loan delinquencies in 2011.

In 2009, we began to offer self-insured Guaranteed Auto Protection (“GAP”) to customers in North Carolina and Alabama. A GAP program is a contractual arrangement whereby we forgive the insured customer’s automobile purchase loan if the automobile is determined to be a total loss by the primary insurance carrier and insurance proceeds are not sufficient to pay off the customer’s loan. In 2011, we recognized $376,000 of revenue from this product and recognize GAP revenue over the life of the loan. Losses are recognized in the period in which they occur.

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In 2010 and 2011, we recognized $500,000 and $453,000, respectively, of revenue from the preparation of income tax returns. We are evaluating this line of business and may decide to stop tax return preparation in the future.

Provision for Loan Losses

Our provision for loan losses increased $1.3 million, or 7.8%, to $17.9 million in 2011 from $16.6 million in 2010. The increase in the provision for loan losses in 2011 resulted from the growth in average finance receivables, particularly the automobile purchase loan portfolio. In 2011, automobile purchase loans grew by $35.4 million, compared to a growth of $10.0 million in 2010. Net charge-offs for 2011 were $16.6 million, or 6.3% of average finance receivables, down from $17.0 million, or 7.9% of average finance receivables, in 2010.

General and Administrative Expenses

Our general and administrative expenses, comprising expenses for personnel, occupancy, advertising and other expenses, increased $7.1 million, or 21.2%, to $40.6 million during 2011 from $33.5 million in 2010.

Personnel.  The largest component of general and administrative expenses is personnel expense, which increased $4.8 million, or 23.4%, to $25.5 million in 2011 from $20.6 million for 2010. This increase is primarily attributable to the addition of 36 branches in 2011. Personnel costs as a percentage of average finance receivables increased slightly from 9.5% in 2010 to 9.6% in 2011. Personnel costs increase with the opening of new branches as we frequently hire branch managers one to three months in advance of opening the branch. This time is spent training managers in another branch prior to opening the branch for which they were hired.

Occupancy.  Occupancy expenses increased $1.4 million, or 26.4%, to $6.5 million in 2011 from $5.2 million in 2010. The increase in occupancy expenses is the result of adding additional branches and the associated rent and utility costs of those branches.

Advertising.  Advertising expenses increased $29,000, or 1.4%, to $2.1 million in 2011 from $2.0 million in 2010.

Other Expenses.  Other expenses increased $886,000, or 15.5%, to $6.6 million in 2011 from $5.7 million in 2010. The increase in other expenses was due primarily to growth in new branches. Other expenses as a percentage of average finance receivables declined to 2.5% in 2011 from 2.6% in 2010.

Interest Expense

Interest expense increased $2.5 million, or 24.9%, to $12.3 million in 2011 from $9.9 million in 2010. The increase in interest expense was due primarily to increased interest expense associated with our senior revolving credit facility and an increase in the unused line fee on our senior revolving credit facility from 25 to 50 basis points effective with the August 2010 renewal of our senior revolving credit facility partially offset by a decrease in interest expense associated with our mezzanine debt.

Interest expense associated with our senior revolving credit facility increased $2.8 million in 2011 compared to 2010. In 2011, the average 30-day LIBOR rate was 0.29% as compared to 0.34% in 2010. However, in August 2010, we amended our senior revolving credit facility, which included a new LIBOR floor of 1.00%. In addition, the average amount outstanding under our senior revolving credit facility increased by $30.4 million during 2011 as compared to 2010. The increase in interest expense with respect to our senior revolving credit facility was also affected by a $252,000 increase in interest expense associated with the change in the value of our interest rate cap during 2011, which was a smaller expense than the unfavorable adjustment of $843,000 during 2010. The rate on the mezzanine debt was 14.25% from January 1, 2010 to August 10, 2010 at which time it increased to the current rate of 15.25%, which was the rate during 2011. We also charged off $245,000 of unamortized debt issuance costs in 2010 in connection with the refinancing of the mezzanine debt and incurred additional expenses in 2010 primarily related to the refinancing.

We intend to repay the mezzanine debt and a portion of the borrowings under our senior revolving credit facility in connection with this offering.

Consulting and Advisory Fees

The consulting and advisory fees paid to related parties decreased $258,000, or 20.9%, to $975,000 in 2011 from $1.2 million in 2010. These agreements will be terminated in connection with this offering.

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Income Taxes

Income taxes increased $3.0 million, or 32.6%, to $12.2 million in 2011 from $9.2 million in 2010. The increase in income taxes was due to an increase in our net income before taxes combined with an increase in the tax rate from 35.8% to 36.4%. The increase in the tax rate is attributable to increased state income taxes, partially offset by an increase in the tax benefit from RMC Reinsurance. RMC Reinsurance is qualified as a small life insurance company for income tax purposes and, as such, is permitted to exclude a certain amount of income from taxable income. The tax benefit attributable to RMC Reinsurance increased in 2011 compared to 2010 because of a $570,000 refund received from our insurance partner in 2010. The refund increased taxable income in RMC Reinsurance, reducing the tax benefit in 2010.

Year Ended December 31, 2010 Compared To Year Ended December 31, 2009

Interest and Fee Income

Interest and fee income increased $10.6 million, or 16.7%, to $74.2 million in 2010 from $63.6 million in 2009. The increase in interest and fee income was due primarily to an 11.9% increase in average finance receivables during the period and an increase in the average yield on loans from 33.0% to 34.4%. The increase in average finance receivables largely resulted from our opening of 17 new branches in 2010 as well as the growth of other recently opened branches. The increase in average yield is attributable in part to our more rapid growth in Alabama, Tennessee, Texas and South Carolina, all of which are states with more favorable interest rate environments.

Insurance Income

Insurance income increased $3.0 million, or 57.8%, to $8.3 million in 2010 from $5.2 million in 2009. The increase in insurance income was due primarily to growth in loans and higher acceptance of insurance products in connection with our loans. Insurance income also benefited from a refund of $570,000 from our insurance partner recognized in January 2010 and a reduction of $147,000 in our credit involuntary unemployment insurance claims reserve recognized in April 2010 and a further reduction of $85,000 in October 2010. Net of these items, insurance income increased $2.2 million, or 42.5%. Insurance income was 3.8% of average finance receivables in 2010 compared to 2.7% in 2009.

Other Income

Other income increased $367,000, or 9.2%, to $4.4 million in 2010 from $4.0 million in 2009. The largest component of other income was late charges, which increased $230,000, or 8.9%, to $2.8 million in 2010 from $2.6 million in 2009. The increase in late charges was attributable to growth in finance receivables, slightly offset by lower delinquencies in 2010 compared to 2009.

Provision for Loan Losses

Our provision for loan losses decreased $2.8 million, or 14.6%, to $16.6 million in 2010 from $19.4 million in 2009. The decreased provision for loan losses in 2010 resulted mainly from lower net charge-offs. Net charge-offs for 2010 were 7.9% of average finance receivables, compared to 8.6% of average loans in 2009. The decrease is also due to a change in our determination of the loan loss allowance for small installment loans. As of January 1, 2010, we changed our loan loss allowance methodology for small installment loans to determine the allowance using losses from the trailing eight months, rather than the trailing nine months, to more accurately reflect the average life of our small installment loans. The change from nine to eight months of average losses reduced the loss allowance for small installment loans by $1.1 million as of January 1, 2010 and reduced the provision for loan losses by $451,000 for 2010.

General and Administrative Expenses

Our general and administrative expenses, comprising expenses for personnel, occupancy, advertising, and other expenses, increased $4.4 million, or 15.1%, to $33.5 million in 2010 from $29.1 million in 2009. Our efficiency ratio improved to 38.6% in 2010 from 40.0% in 2009.

Personnel. Personnel expenses increased $1.6 million, or 8.6%, to $20.6 million in 2010 from $19.0 million in 2009. This increase was primarily attributable to the opening of 17 new stores in 2010. Personnel costs declined as a percentage of total revenue to 23.8% in 2010 from 26.1% in 2009.

Occupancy. Occupancy expenses increased $627,000, or 13.8%, to $5.2 million in 2010 from $4.5 million in 2009. The increase in occupancy expense was the result of opening new stores and increases in rent on lease renewals for certain existing stores.

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Advertising. Advertising expenses increased $815,000, or 67.2%, to $2.0 million in 2010 from $1.2 million in 2009. The increase in advertising expenses was due primarily to an increase in the size of our live check campaigns. The volume of our live check distributions increased 81.3% from 2009 to 2010.

Other Expenses. Other expenses increased $1.3 million, or 30.2%, to $5.7 million in 2010 from $4.4 million in 2009. The increase in other expenses was due primarily to growth in our business, as other expenses as a percentage of total revenue remained relatively constant.

Interest Expense

Interest expense increased $1.2 million, or 13.9%, to $9.9 million in 2010 from $8.7 million in 2009. The increase in interest expense was due primarily to an unfavorable mark-to-market adjustment of $843,000 recorded on our interest rate caps in 2010, compared to a favorable adjustment of $280,000 in 2009. The increase also reflects increased interest expense associated with our senior revolving credit facility and mezzanine debt.

Interest expense associated with the senior revolving credit facility increased $696,000, primarily because of an increase in effective interest rates. We renewed our senior revolving credit facility in August 2010. The renewed senior revolving credit facility included a new LIBOR floor of 1.00%, a higher interest rate spread over LIBOR and a higher fee on the unused amount of the facility. As a result, the effective rate increased from 3.4% in 2009 to a blended effective rate on the new and old revolving credit facilities of 3.8% in 2010. In 2009, the average one-month LIBOR was 0.33% and, in 2010, the rate was 0.27%. Interest expense also increased slightly due to an increase in weighted average borrowings to $144.1 million in 2010 from $141.8 million in 2009.

Increased costs relating to our mezzanine debt are primarily due to refinancing such debt in August 2010. The refinancing resulted in an increase in interest rate from 14.00% to 15.25% and the recognition of $246,000 in unamortized debt issuance costs at the time of renewal.

We intend to repay the mezzanine debt and a portion of the borrowings under our senior revolving credit facility with proceeds from this offering.

Consulting and Advisory Fees

The consulting and advisory fees paid to related parties decreased $30,000, or 2.4%, to $1.2 million in 2010 from $1.3 million in 2009. These agreements will be terminated upon the consummation of this offering.

Income Taxes

Income taxes increased $4.7 million, or 105.2%, to $9.2 million in 2010 from $4.5 million in 2009. The increase in income taxes was due primarily to growth in our pre-tax income. Additionally, we moved into the 35% bracket applicable to pre-tax income in excess of $18.3 million. RMC Reinsurance is qualified as a small life insurance company for income tax purposes and as such is permitted to exclude a certain amount of income from taxable income. This income tax benefit declined on a relative basis in 2010 as our insurance income exceeded the amount permitted to be excluded.

Quarterly Information and Seasonality

Our loan volume and corresponding finance receivables follow seasonal trends. Demand for our loans is typically highest during the fourth quarter, largely due to holiday spending. Loan demand has generally been the lowest during the first quarter, largely due to the timing of income tax refunds. During the remainder of the year, our loan volume typically grows from customer loan activity. In addition, we typically generate higher loan volumes in the second half of the year from our live check campaigns, which are timed to coincide with seasonal consumer demand. Consequently, we experience significant seasonal fluctuations in our operating results and cash needs.

Liquidity and Capital Resources

We have historically financed, and plan to continue to finance, the majority of our operating liquidity and capital needs through a combination of cash flows from operations and borrowings under our senior revolving credit facility.

As a holding company, almost all of the funds generated from our operations are earned by our operating subsidiaries. In addition, our wholly-owned subsidiary RMC Reinsurance is required to maintain cash reserves against life insurance policies ceded to it, as determined by the ceding company, and has also purchased a cash-collateralized letter of credit in favor of the ceding company. As of December 31, 2011, these reserve requirements

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totaled $1.3 million; additionally, we had a reserve for life insurance claims on our balance sheet of $182,814, as determined by the third party, unrelated ceding company.

Our primary cash needs relate to funding our lending activities and, to a lesser extent, capital expenditures relating to expanding and maintaining our branch locations.

Cash Flow

A summary of operating, investing and financing activities are shown in the following table:

	YEAR ENDED DECEMBER 31,
	2009			2010			2011
	(In thousands)
Provided by operating activities	$	31,232		$	41,215		$	41,048
Provided by (used in) investing activities		(40,711	)		(50,599	)		(78,933	)
Provided by (used in) financing activities		11,066			7,222			41,878
Increase (decrease) in cash and cash equivalents	$	1,587		$	(2,162	)	$	3,993

Operating Activities

Net cash provided by operating activities decreased slightly from 2010 to 2011 despite an increase in net income of $4.8 million. Offsetting the increase in net income was cash spent on other assets, primarily $2.6 million of expenses related to this offering.

Net cash provided by operating activities increased by $10.0 million, or 32.0%, to $41.2 million in 2010 from $31.2 million in 2009. The increases were primarily due to increased net income.

Investing Activities

Investing activities consist of finance receivables originated, net increase in restricted cash, purchase of furniture and equipment for new and existing branches and the purchase of interest rate caps.

	YEAR ENDED DECEMBER 31,
	2009			2010			2011
	(In thousands)
Finance receivables (originated or purchased) and repaid	$	(39,249	)	$	(49,346	)	$	(75,902	)
Net increase in restricted cash		(106	)		—			(450	)
Purchase of furniture and equipment		(556	)		(1,210	)		(2,581	)
Purchase of interest rate caps		(800	)		(43	)		—
Net cash provided by (used in) investing activities	$	(40,711	)	$	(50,599	)	$	(78,933	)

Net cash used in investing activities increased $28.3 million to $78.9 million during 2011 from $50.6 million in 2010. The increase in cash used in investing activities was primarily the result of an increase of $26.6 million in the net origination of finance receivables from $49.3 million during 2010 to $75.9 million in 2011.

Net cash used in investing activities increased by $9.9 million, or 24.3%, to $50.6 million in 2010 from $40.7 million in 2009. The increases were due primarily to an increase in our finance receivables originated as described above.

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Financing Activities

Financing activities consist of borrowings and payments on our outstanding indebtedness and the net change in our cash overdraft.

	YEAR ENDED DECEMBER 31,
	2009			2010			2011
	(In thousands)
Net increase (decrease) in cash overdraft	$	(214	)	$	215		$	(364	)
Net advances (payments) on senior revolving credit facility		11,674			7,015			42,708
Proceeds from issuance of mezzanine debt, related party		—			25,814			—
Payments on mezzanine debt		—			(25,814	)		—
Payments on subordinated debt and other notes, net		(394	)		(8	)		(466	)
Net cash provided by (used in) financing activities	$	11,066		$	7,222		$	41,878

The amount of borrowings required to fund loan growth declined from 2009 to 2010, as illustrated in the following chart. The increase in 2011 as a percentage of finance receivables resulted from the growth in new branches.

					NET ADVANCES ON
					SENIOR REVOLVING
					CREDIT FACILITY AS A
			NET ADVANCES		PERCENTAGE OF
	FINANCE		(PAYMENTS)		FINANCE
	RECEIVABLES		ON SENIOR		RECEIVABLES
	ORIGINATED AND		REVOLVING		ORIGINATED AND
PERIOD	PURCHASED		CREDIT FACILITY		PURCHASED
	(In thousands, except percentages)
2009	$	39,249	$	11,674		30	%
2010	$	49,346	$	7,015		14	%
2011	$	75,902	$	42,708		56	%

Net cash provided by financing activities increased by $34.7 million to $41.9 million in 2011 from $7.2 million in 2010. The increase in net cash provided by financing activities was primarily a result of an increase in net advances from our senior revolving credit facility to fund a portion of the increase in finance receivables not covered by cash from operations.

Net cash provided by financing activities decreased by $3.8 million, or 34.7%, to $7.2 million in 2010 from $11.1 million in 2009. The decrease in net cash provided by financing activities was primarily a result of a decrease in the net advances from our senior revolving credit facility, due to our increased cash available from operating activities, which has allowed us to fund a greater percentage of our loans using cash on hand.

We intend to repay the mezzanine debt and a portion of the borrowings under our senior revolving credit facility with proceeds from this offering.

Financing Arrangements

Senior Revolving Credit Facility

In August 2010, we renewed our senior revolving credit facility with a syndicate of banks. The senior revolving credit facility provided for up to $225.0 million in availability, with a borrowing base of 85% of eligible finance receivables. The senior revolving credit facility had a maturity of August 25, 2013. Borrowings under the facility bear interest, payable monthly at rates equal to LIBOR of a maturity we elected between one month and nine months, with a LIBOR floor of 1.00%, plus an applicable margin based on our leverage ratio (which was 3.25% as of December 31, 2011). Alternatively, we may pay interest at a rate based on the prime rate plus an applicable margin (which would have been 2.25% as of December 31, 2011). We also pay an unused line fee of 0.50% per annum, payable monthly. The senior revolving credit facility is collateralized by certain of our assets including substantially all of our finance receivables and equity interests of substantially all of our subsidiaries. The credit agreement contains certain restrictive covenants, including maintenance of specified interest coverage and debt

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ratios, restrictions on distributions and limitations on other indebtedness, maintenance of a minimum allowance for loan losses and certain other restrictions.

In connection with this offering and the acquisition of Alabama branches, we entered into an amended and restated senior revolving credit facility in January 2012. The amended and restated senior revolving credit facility provides for up to $255.0 million in availability, with a borrowing base of 85% of eligible finance receivables, and matures in January 2015. Upon the completion of this offering, the amended and restated senior credit facility will reduce the applicable margin for LIBOR loans from 3.25% to 3.00% and will reduce the applicable margin for prime rate loans from 2.25% to 2.00%. We continue to be required to pay an unused line fee of 0.50% per annum, payable monthly. The amended senior revolving credit facility will continue to be collateralized by certain of our assets including substantially all of our finance receivables and the equity interests of substantially all of our subsidiaries and will contain certain restrictive covenants, including maintenance of specified interest coverage and debt ratios, restrictions on distributions and limitations on other indebtedness, maintenance of a minimum allowance for loan losses and certain other restrictions.

Our outstanding debt under the senior revolving credit facility was $206.0 million at December 31, 2011. At December 31, 2011, we were in compliance with our debt covenants.

We have entered into interest rate caps to manage interest rate risk associated with a notional amount of $150.0 million of our LIBOR-based borrowings. The interest rate caps have a strike rate of 6.0% and a maturity of March 4, 2014. When three-month LIBOR exceeds six percent, the counterparty reimburses us for the excess over six percent; no payment is required by us or the counterparty when three-month LIBOR is below six percent. We intend to repay a portion of the borrowings under our senior revolving credit facility using a portion of the net proceeds from this offering.

Mezzanine Debt

In August 2010, we entered into a $25.8 million mezzanine loan from a sponsor and three individual owners. The mezzanine debt, which had a maturity of October 25, 2013, accrues interest at a rate of 15.25% per annum, of which 2.00% is payable in kind at our option. The mezzanine debt is secured by a junior lien on certain of our assets, including the equity interests of substantially all of our subsidiaries and substantially all of our finance receivables and is subordinated to our senior revolving credit facility. The proceeds of this debt were used to retire the mezzanine debt of the same amount to an unrelated lender.

The mezzanine loan agreement contains certain restrictive covenants, including maintenance of a specified interest coverage ratio, a restriction on distributions, limitations on additional borrowings, debt ratio, maintenance of a minimum allowance for loan losses and certain other restrictions.

At December 31, 2011, we were in compliance with all debt covenants. At December 31, 2011, the aggregate principal amount of mezzanine debt outstanding was $25.8 million. We intend to use the proceeds from this offering to repay our mezzanine debt in full.

In connection with the acquisition of Alabama branches and the senior revolving credit facility amendment, we amended the mezzanine debt in January 2012 to provide for a maturity date of March 31, 2015.

Other Financing Arrangements

We have a $1,500,000 line of credit, which is secured by a mortgage on our headquarters, with a commercial bank to facilitate our cash management program. The interest rate is prime plus 0.25% with a minimum of 5.00% and interest is payable monthly. We recently extended the maturity on this line of credit until January 18, 2015. There are no significant restrictive covenants associated with this line of credit.

Off Balance Sheet Arrangements

We are not a party to any off balance sheet arrangements.

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Contractual Obligations

The following table summarizes our contractual obligations as of December 31, 2011 and the effect such obligations are expected to have on our liquidity and cash flows in future periods.

	PAYMENTS DUE BY PERIOD
			LESS THAN 1						MORE THAN
	TOTAL		YEAR		1 - 3 YEARS		3 - 5 YEARS		5 YEARS
	(In thousands)
Long-term debt obligations	$	231,823	$	—	$	231,823	$	—	$	—
Interest payments on long-term debt obligations		22,085		13,000		9,085		—		—
Operating lease obligations		4,304		2,243		1,895		165		1
	$	258,212	$	15,243	$	242,803	$	165	$	1

The following table summarizes our contractual obligations as of December 31, 2011 and the effect such obligations are expected to have on our liquidity and cash flows in future periods after giving effect to this offering and the expected use of proceeds therefrom.

	PAYMENTS DUE BY PERIOD
			LESS THAN 1						MORE THAN
	TOTAL		YEAR		1 - 3 YEARS		3 - 5 YEARS		5 YEARS
	(In thousands)
Long-term debt obligations	$		$	—	$		$	—	$	—
Interest payments on long-term debt obligations								—		—
Operating lease obligations		4,304		2,243		1,895		165		1
	$		$		$		$	165	$	1

Impact of Inflation

Our results of operations and financial condition are presented based on historical cost, except for the interest rate cap which is carried at fair value. While it is difficult to accurately measure the impact of inflation due to the imprecise nature of the estimates required, we believe the effects of inflation, if any, on our results of operations and financial condition have been immaterial.

Related Party Transactions

For a description of our related party transactions, see “Certain Relationships and Related Person Transactions.”

Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

Interest rate risk arises from the possibility that changes in interest rates will affect our financial statements.

Finance receivables are originated either at prevailing market rates or at statutory limits. Our loan portfolio turns approximately 1.2 times per year from cash payments and renewal of loans. As our automobile purchase loans and furniture and appliance purchase loans have longer maturities and typically are not refinanced prior to maturity, the turn of the loan portfolio may decrease as these loans increase as a percentage of our portfolio.

At December 31, 2011, our outstanding debt under our senior revolving credit facility was $206.0 million and interest on borrowings under this facility was approximately 4.8% including amortization of debt issuance costs. Because the LIBOR interest rates are currently below the 1.00% floor provided for in our senior revolving credit facility, an increase of 100 basis points in the LIBOR interest rate would result in an increase of less than 100 basis points to our borrowing costs. Based on a LIBOR rate of 0.375% and the outstanding balance at December 31, 2011, this increase in LIBOR would result in an increase of 37.5 basis points to our borrowing costs and would result in $773,000 of

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increased interest expense. We entered into an amended and restated senior revolving credit facility in January 2012. See “Recent Developments–Senior Revolving Credit Facility” and “– Liquidity and Capital Resources.”

We have entered into interest rate caps to manage interest rate risk associated with $150.0 million of our LIBOR-based borrowings. The interest rate caps are based on the three-month LIBOR contract and reimburse us for the difference when three-month LIBOR exceeds six percent and have a maturity of March 4, 2014. The carrying value of the interest rate caps are adjusted to fair value. For the year ended December 31, 2011, we recorded an unfavorable fair value adjustment of $252,000 as an increase in interest expense.

Critical Accounting Policies

Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The preparation of these financial statements requires estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Management bases estimates on historical experience and other assumptions it believes to be reasonable under the circumstances and evaluates these estimates on an on-going basis. Actual results may differ from these estimates under different assumptions or conditions.

Refer to Note 1 to our consolidated financial statements for the year ended December 31, 2011 included elsewhere in the prospectus for a complete discussion of our significant accounting policies. We set forth below those material accounting policies that we believe are the most critical to an investor’s understanding of our financial results and condition and that involve a higher degree of complexity and management judgment.

Loan Losses

Finance receivables are equal to the total amount due from the customer, net of unearned finance and insurance charges. Net finance receivables are equal to the total amount due from the customer, net of unearned finance and insurance charges and allowance for loan losses.

Provisions for loan losses are charged to income in amounts sufficient to maintain an adequate allowance for loan losses on our related finance receivables portfolio. Loan loss experience, contractual delinquency of finance receivables, the value of underlying collateral and management’s judgment are factors used in assessing the overall adequacy of the allowance and the resulting provision for loan losses.

Our loans within each loan product are homogenous and it is not possible to evaluate individual loans. Prior to 2010, management analyzed losses in the loan portfolio using two categories of loans: small installment loans (which included all loans of less than $2,500) and large loans (which included all other loans). As our loan products have evolved, we have separated our loan portfolio into four categories: small installment loans, large installment loans, automobile purchase loans and furniture and appliance purchase loans. Beginning in 2010, we have evaluated losses in each of the four categories of loans in establishing the allowance for loan losses. Management believes that the use of four categories to analyze losses in the loan portfolio is more representative of our business beginning in 2010 following our introduction of furniture and appliance purchase loans and our expansion of automobile purchase loans to include indirect automobile purchase loans. We believe four categories will provide a more accurate analytical framework for determining appropriate allowance for loan loss levels as our business develops and we expand our product offerings. We believe this change in methodology had no impact on our allowance for loan losses and our financial statements as a whole in 2010 and 2011.

In making an evaluation about the portfolio we consider the trend of contractual delinquencies and the slow file. The slow file consists of all loans that are one or more days past due. We use the number of accounts in the slow file rather than the dollar amount to prevent masking delinquencies of smaller loans compared to larger loans. We evaluate delinquencies and the slow file by each state and by supervision district within states to identify trends requiring investigation. Historically, loss rates have been affected by several factors, including the unemployment rates in the areas in which we operate, the number of customers filing for bankruptcy protection and the prices paid for vehicles at automobile auctions. Management considers each of these factors in establishing the allowance for loan losses.

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As of January 1, 2010, we changed our accounting estimate for our loan loss allowance methodology for small installment loans to determine the allowance using losses from the trailing eight months, rather than the trailing nine months, to more accurately reflect the average life of our small installment loans. We use eight months rather than a shorter period as it takes one month for a loan to become delinquent and we believe using eight months provides an allowance that is more appropriate and more conservative than one resulting from seven months of losses. The change in accounting estimate from nine to eight months of average losses reduced the loss allowance for small installment loans by $1.1 million as of January 1, 2010 and reduced the provision for loan losses by $451,000 for 2010. FASB 250-10-45-18 suggests that changes in a loan loss allowance due to the ongoing evaluation of an entity’s experience constitutes a change in accounting estimate. We believe the change from nine to eight months is a change in accounting estimate, rather than an error in the financial statements. Changes in estimates are appropriately reflected in the year of the change in the financial statements.

In 2011, we began evaluating the loans of customers in Chapter 13 bankruptcy for impairment as troubled debt restructurings. We have adopted the policy of aggregating loans with similar risk characteristics for purposes of computing the amount of impairment. In connection with the adoption of this practice, we computed the estimated impairment on our Chapter 13 bankrupt loans in the aggregate by discounting the projected cash flows at the original contract rates on the loan using the terms imposed by the bankruptcy court. We applied this method in the aggregate to each of our four classes of loans.

Our policy for the accounts of customers in bankruptcy is to charge off the balance of accounts in a confirmed bankruptcy under Chapter 7 of the bankruptcy code. For customers in a Chapter 13 bankruptcy plan, the bankruptcy court reduces the post-petition interest rate we can charge, as it does for most creditors. Additionally, if the bankruptcy court converts a portion of a loan to an unsecured claim, our policy is to charge off the portion of the unsecured balance that we deem uncollectible at the time the bankruptcy plan is confirmed. Once the customer is in a confirmed Chapter 13 bankruptcy plan, we receive payments with respect to the remaining amount of the loan at the reduced interest rate from the bankruptcy trustee. We do not believe that accounts in a confirmed Chapter 13 plan have a higher level of risk than non-bankrupt accounts. If a customer fails to comply with the terms of the bankruptcy order, we will petition the trustee to have the customer dismissed from bankruptcy. Upon dismissal, we restore the account to the original terms and pursue collection through our normal collection activities.

Prior to June 30, 2011, in making the computations of the present value of cash payments to be received on bankrupt accounts in each product category, we used the weighted average interest rates and weighted average remaining term based on data as of June 30, 2011. Management believes that using current data does not materially change the results that would be obtained if it had available data for interest rates and remaining term data as of the applicable periods. Since June 30, 2011, we have used data for the current quarter.

We fully reserve for all loans at the date that the loan is contractually delinquent 180 days. We initiate repossession proceedings only when an account is seriously delinquent, we have exhausted other means of collection and, in the opinion of management, the customer is unlikely to make further payments. Since 2010, we have sold substantially all repossessed vehicles through public sales conducted by independent automobile auction organizations, after the required post-possession waiting period. Losses on the sale of repossessed collateral are charged to the allowance for loan losses.

Income Recognition

Interest income is recognized using the interest (actuarial) method, or constant yield method. Therefore, we recognize revenue from interest at an equal rate over the term of the loan. Unearned finance charges on pre-compute contracts are rebated to customers utilizing the Rule of 78s method. The difference between income recognized under the constant yield method and the Rule of 78s method is recognized as an adjustment to interest income at the time of rebate. Accrual of interest income on finance receivables is suspended when no payment has been received for 90 days or more on a contractual basis. The accrual of income is not resumed until one or more full contractual monthly payments are received and the account is less than 90 days contractually delinquent. Interest income is suspended on finance receivables for which collateral has been repossessed.

We recognize income on credit insurance products using the constant yield method over the life of the related loan. Rebates are computed using the Rule of 78s method and any difference between the constant yield method and the Rule of 78s is recognized in income at the time of rebate.

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We charge a fee to automobile dealers for each loan we purchase from that dealer. We defer this fee and accrete it to income using a method that approximates the constant yield method over the life of the loan.

Charges for late fees are recognized as income when collected.

Insurance Operations

Insurance operations include revenue and expense from the sale of optional insurance products to our customers. These optional products include credit life, credit accident and health, property insurance and involuntary unemployment insurance. The premiums and commissions we receive are deferred and amortized to income over the life of the insurance policy using the constant yield method.

Stock-Based Compensation

We have a stock option plan for certain members of management. We granted options with respect to 441,000 shares in 2007 and 222,000 shares in 2008. We did not grant any options in 2009, 2010 or 2011. We measure compensation cost for stock-based awards made under this plan at estimated fair value and recognize compensation expense over the service period for awards expected to vest. All grants are made at 100% of estimated fair value at the date of the grant.

The fair value of stock options is determined using the Black-Scholes valuation model. The Black-Scholes model requires the input of highly subjective assumptions, including expected volatility, risk-free interest rate and expected life, changes to which can materially affect the fair value estimate. In addition, the estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised.

Since our common stock is not publicly traded the performance of the common stock of a publicly traded company whose business is comparable to ours was used to estimate the volatility of our stock. The risk-free rate is based on the U.S. Treasury yield at the date our board of directors approved the option awards for the period over which the options are exercisable.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effects of future tax rate changes are recognized in the period when the enactment of new rates occurs.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. As of December 31, 2011, we had not taken any tax positions that exceeds the amount described above.

Interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the consolidated statements of income.

We file income tax returns in the U.S. federal jurisdiction and various states. We are generally no longer subject to U.S. federal income tax examinations for years ended before 2009, or state and local income tax examinations by taxing authorities before 2008, though we remain subject to examination in Texas for the 2007 tax year.

The Internal Revenue Service concluded an examination of RMC’s 2007 and 2008 tax returns in early 2010. The amount assessed by the Internal Revenue Service was not material to the consolidated financial statements.

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Recently Issued Accounting Standards

Accounting Pronouncements Issued and Adopted

In July 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. ASU 2010-20 requires more robust and disaggregated disclosures about the credit quality of financing receivables and allowances for credit losses, including disclosure about credit quality indicators, past due information and modifications of finance receivables. The disclosures required as of the end of a reporting period and certain items related to activity during the year were adopted in 2010, which significantly expanded the existing disclosure requirements, but did not have any impact on our consolidated financial position, results of operations or cash flows. The remaining amendments that require disclosures about activity that occurs during a reporting period are effective for periods beginning on or after December 15, 2010, but did not have any impact on our consolidated financial position, results of operations or cash flows.

In April 2011, the FASB issued ASU 2011-02, Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring. ASU 2011-02 clarifies which loan modifications constitute troubled debt restructurings. It is intended to assist creditors in determining whether a modification of the terms of a receivable meets the criteria to be considered a troubled debt restructuring, both for purposes of recording an impairment loss and for disclosure of troubled debt restructurings. ASU 2011-02 is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructurings occurring on or after the beginning of the fiscal year of adoption. The adoption of this guidance did not have a material impact on our consolidated financial position, results of operations, cash flows or disclosures.

Accounting Pronouncements Issued and Not Yet Adopted

In October 2010, the FASB issued ASU 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts. ASU 2010-26 modifies the definitions of the type of costs incurred by insurance entities that can be capitalized in the successful acquisition of new and renewal contracts. ASU 2010-26 requires incremental direct costs of successful contract acquisition as well as certain costs related to underwriting, policy issuance and processing, medical and inspection and sales force contract selling for successful contract acquisition to be capitalized. These incremental direct costs and other costs are those that are essential to the contract transaction and would not have been incurred had the contract transaction not occurred. This guidance is effective for us for the year beginning January 1, 2012 and may be applied prospectively or retrospectively. We do not expect the adoption of this guidance to have a material impact on our financial position, results of operations and cash flows.

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement, which aligns disclosures related to fair value between U.S. GAAP and International Financial Reporting Standards. The ASU includes changes to the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and changes to the disclosure of information about fair value measurements. More specifically, the changes clarify the intent of the FASB regarding the application of existing fair value measurements and disclosures as well as changing some particular principles or requirements for measuring fair value or for disclosing information about fair value measurements. This ASU is effective for interim and annual periods beginning after December 15, 2011. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

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BUSINESS

Overview

We are a diversified specialty consumer finance company providing a broad array of loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies and other traditional lenders. We began operations in 1987 with four branches in South Carolina and have expanded our branch network to 170 locations with over 174,000 active accounts across South Carolina, Texas, North Carolina, Tennessee, Alabama and Oklahoma as of December 31, 2011. Each of our loan products is secured, structured on a fixed rate, fixed term basis with fully amortizing equal monthly installment payments and is repayable at any time without penalty. Our loans are sourced through our multiple channel platform, including in our branches, through direct mail campaigns, independent and franchise automobile dealerships, online credit application networks, furniture and appliance retailers and our consumer website. We operate an integrated branch model in which all loans, regardless of origination channel, are serviced and collected through our branch network, providing us with frequent in-person contact with our customers, which we believe improves our credit performance and customer loyalty. Our goal is to consistently and soundly grow our finance receivables and manage our portfolio risk while providing our customers with attractive and easy-to-understand loan products that serve their varied financial needs.

Our diversified product offerings include:

n   Small Installment Loans – We offer standardized small installment loans ranging from $300 to $2,500, with terms of up to 36 months, which are secured by non-essential household goods. We originate these loans both through our branches and through mailing live checks to pre-screened individuals who are able to enter into a loan by depositing these checks. As of December 31, 2011, we had approximately 137,000 small installment loans outstanding representing $130.3 million in finance receivables or an average of approximately $950 per loan. In 2011, interest and fee income from small installment loans contributed $54.9 million to our total revenue.

n   Large Installment Loans – We offer large installment loans through our branches ranging from $2,500 to $20,000, with terms of between 18 and 60 months, which are secured by a vehicle in addition to non-essential household goods. As of December 31, 2011, we had approximately 12,000 large installment loans outstanding representing $36.9 million in finance receivables or an average of approximately $3,000 per loan. In 2011, interest and fee income from large installment loans contributed $9.5 million to our total revenue.

n   Automobile Purchase Loans – We offer automobile purchase loans of up to $30,000, generally with terms of between 36 and 72 months, which are secured by the purchased vehicle. Our automobile purchase loans are offered through a network of dealers in our geographic footprint, including over 2,000 independent and approximately 740 franchise automobile dealerships as of December 31, 2011. Our automobile purchase loans include both direct loans, which are sourced through a dealership and closed at one of our branches, and indirect loans, which are originated and closed at a dealership in our network without the need for the customer to visit one of our branches. As of December 31, 2011, we had approximately 15,000 automobile purchase loans outstanding representing $128.7 million in finance receivables or an average of approximately $8,300 per loan. In 2011, interest and fee income from automobile purchase loans contributed $25.8 million to our total revenue.

n   Furniture and Appliance Purchase Loans – We offer indirect furniture and appliance purchase loans of up to $7,500, with terms of between six and 48 months, which are secured by the purchased furniture or appliance. These loans are offered through a network of approximately 250 furniture and appliance retailers, including 79 franchise locations of the largest furniture retailer in the United States. Since launching this product in November 2009, our portfolio has grown to approximately 9,200 furniture and appliance purchase loans outstanding representing $10.7 million in finance receivables or an average of approximately $1,170 per loan as of December 31, 2011. In 2011, interest and fee income from furniture and appliance loans contributed $1.1 million to our total revenue.

n   Insurance Products – We offer our customers optional payment protection insurance relating to many of our loan products.

Our revenue has grown from $56.6 million in 2007 to $105.2 million in 2011, representing a CAGR of 16.8%. Our net income from continuing operations has grown even more rapidly from $3.1 million in 2007 to $21.2 million in

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2011, representing a CAGR of 61.7%. On a pro forma basis, giving effect to this offering and the application of the estimated net proceeds therefrom as described under “Use of Proceeds,” our net income would have been $      million in 2011. Our aggregate finance receivables have grown from $167.5 million as of December 31, 2007 to $306.6 million as of December 31, 2011, representing a CAGR of 16.3%.

Our Industry

We operate in the consumer finance industry serving the large and growing population of underbanked and other non-prime consumers who have limited access to credit from banks, thrifts, credit card companies and other traditional lenders. According to the FDIC, there were approximately 43 million adults living in underbanked households in the United States in 2009. Furthermore, difficult economic conditions in recent years have resulted in an increase in the number of non-prime consumers in the United States.

While the number of non-prime consumers in the United States has grown, the supply of consumer credit to this demographic has contracted. Following deregulation of the U.S. banking industry in the 1980s, many banks and finance companies that traditionally provided small denomination consumer credit refocused their businesses on larger loans with lower comparative origination costs and lower charge-off rates. Tightened credit requirements imposed by banks, thrifts, credit card companies and other traditional lenders that began during the recession in 2008 and 2009 further reduced the supply of consumer credit for the growing number of underbanked and non-prime individuals. According to the Federal Reserve Bank of New York, $1.4 trillion in consumer credit, including mortgages, home equity lines of credit, auto loans, credit cards, student loans and other forms of consumer credit, was removed from the credit markets between the second half of 2008 and the fourth quarter of 2011.

We believe the large and growing number of potential customers in our target market, combined with the decline in available consumer credit, provides an attractive market opportunity for our diversified product offerings – installment lending, automobile purchase lending and furniture and appliance purchase lending.

Installment Lending. Installment lending to underbanked and other non-prime consumers is one of the most highly fragmented sectors of the consumer finance industry. We believe that installment loans are provided through approximately 8,000 to 10,000 individually-licensed finance company branches in the United States. Providers of installment loans, such as Regional, generally offer loans with longer terms and lower interest rates than other alternatives available to underbanked consumers, such as title, payday and pawn lenders.

Automobile Purchase Lending. Automobile finance comprises one of the largest consumer finance markets in the United States. According to CNW Research, a market research company focused on automobile purchase trends, at the end of 2011, there was in excess of $1.8 trillion in automobile financing outstanding in the United States, including automobile purchase loans as well as leases, of which 47% related to used vehicle sales. The automobile purchase loan sector is generally segmented by the credit characteristics of the borrower. According to CNW Research, originations by borrowers within the subprime market averaged $81.4 billion annually over the past ten years. Automobile purchase loans are typically initiated or arranged through approximately 68,000 automobile dealers nationwide who rely on financing to drive their automobile sales. In recent years, many providers of automobile financing have substantially curtailed their lending to subprime borrowers due to significant disruptions in the capital markets and declines in underlying borrower creditworthiness. As a result, subprime automobile purchase loan approval rates have dropped significantly from approximately 69% in early 2007 to approximately 11% at the end of 2011. This contraction in the supply of financing presents an attractive opportunity to provide a large, underserved population of borrowers with automobile purchase financing.

Furniture and Appliance Purchase Lending. The furniture and appliance industry represents a large consumer market with limited financing options for non-prime consumers. According to the U.S. Department of Commerce’s Bureau of Economic Analysis, personal consumption expenditures for household furniture were estimated at approximately $83.9 billion for 2011. As measured by Twice, a trade publication covering the consumer electronics and major appliance industries, the top 100 consumer electronics retailers in the United States reported consumer electronic sales of $128.1 billion in 2010. Most furniture retailers do not provide their own financing, but instead partner with large banks and credit card companies who generally limit their lending activities to prime borrowers. As a result, non-prime customers often do not qualify for financing from these traditional lenders. Continued

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demand for furniture and appliances, combined with constraints on the availability of credit for non-prime consumers, presents a growth opportunity for furniture and appliance purchase loans.

Our Strengths

Integrated Branch Model Offers Advantages Over Traditional Lenders

Our branch network, with 170 locations across six states as of December 31, 2011, serves as the foundation of our multiple channel platform and the primary point of contact with our over 174,000 active accounts. By integrating underwriting, servicing and collections at the branch level, our employees are able to maintain a relationship with our customers throughout the life of a loan. For loans originated at a branch, underwriting decisions are typically made by our local branch manager. Our branch managers combine our sound, company-wide underwriting standards and flexibility within our guidelines to consider each customer’s unique circumstances. This tailored branch-level underwriting approach allows us to both reject certain bad loans that would otherwise be approved solely based on a credit report or automated loan approval system, as well as to selectively extend loans to customers with prior credit challenges who might otherwise be denied credit. In addition, all loans, regardless of origination channel, are serviced and collected through our branches, which allows us to maintain frequent, in-person contact with our customers. We believe this frequent-contact, relationship-driven lending model provides greater insight into potential payment difficulties and allows us to more effectively pursue payment solutions, which improves our overall credit performance. Additionally, with over 70% of monthly payments made in-person at our branches, we have frequent opportunities to assess the borrowing needs of our customers and offer new loan products as their credit profiles evolve.

Multiple Channel Platform

We offer a diversified range of loan products through our multiple channel platform, which enables us to efficiently reach existing and new customers throughout our markets. We began building our strategically located branch network over 24 years ago and have expanded to 170 branches as of December 31, 2011. Our automobile purchase loans are offered through a network of dealers in our geographic footprint, including over 2,000 independent and approximately 740 franchise auto dealerships as of December 31, 2011. We have recently begun to expand this channel by offering indirect automobile purchase loans, which are closed at the dealership without the need for the customer to visit a branch. In addition, we have relationships with approximately 250 furniture and appliance retailers that offer our furniture and appliance purchase loans in their stores at the point of sale. We have also further developed and refined our direct mail campaigns, including pre-screened live check mailings and mailings of invitations to apply for a loan, which enable us to market our products to hundreds of thousands of customers on a cost-effective basis. Finally, we have developed our consumer website to promote our products and facilitate loan applications. We believe that our multiple channel platform provides us with a competitive advantage by giving us broader access to our existing customers and multiple avenues for attracting new customers, enabling us to grow our finance receivables, revenues and earnings while we maintain consistent credit performance through our integrated branch model.

Attractive Products for Customers with Limited Access to Credit

Our flexible loan products, ranging from $300 to $30,000 with terms between three and 72 months, are competitively priced, easy to understand and incorporate features designed to meet the varied financial needs and credit profiles of a broad array of consumers. This product diversity distinguishes us from monoline competitors and provides us with the ability to offer our customers new loan products as their credit profiles evolve, building customer loyalty.

We believe that the rates on our products are significantly more attractive than many other credit options available to our customers, such as payday, pawn or title loans. We also differentiate ourselves from such alternative financial service providers by reporting our customers’ payment performance to credit bureaus, providing our customers the opportunity to improve their credit score by establishing a responsible payment history with us and ultimately gain access to a wider range of credit options, including our own. We believe this opportunity for our customers to potentially improve their credit history, combined with our competitive pricing and terms, distinguish us in the consumer finance market and provide us with a competitive advantage.

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Demonstrated Organic Growth

We have grown our finance receivables by 83.0% from $167.5 million at December 31, 2007 to $306.6 million at December 31, 2011. Our growth has come both from expanding our branch network and developing new channels and products.

From 2007 to 2011, we grew our year-end branch count from 96 branches to 170 branches, a CAGR of 15.4%, while only closing one branch, which was consolidated with another existing branch, during the same period. We opened or acquired 36 branches in 2011. We have also grown our existing branch revenues. Our same-store revenue growth rate was 16.3% in 2011, and has averaged 14.7% annually since 2007. Historically, our branches have rapidly increased their outstanding finance receivables during the early years of operations and generally have quickly achieved profitability.

We have also grown by adding new channels and products, which are then serviced and collected at the local branch level. We introduced direct automobile purchase loans in 1998, and have recently expanded our product offerings to include indirect automobile purchase loans. Indirect automobile purchase loans allow customers to obtain a loan at a dealership without visiting one of our branches. We opened two AutoCredit Source branches in early 2011 and two additional AutoCredit Source branches in early 2012, which focus solely on originating, underwriting and servicing indirect automobile purchase loans. As of December 31, 2011, we had established over 480 indirect dealer relationships through our AutoCredit Source branches. Gross loan originations from our live check program have grown from $52.5 million in 2008 to $143.1 million in 2011, a CAGR of 39.7%, as we have increased the volume and sophistication of our live check marketing campaigns. We also introduced a consumer website enabling customers to complete a loan application online. Since the launch of our website in late 2008, we have received more than 22,500 applications resulting in loans representing $5.5 million in gross finance receivables.

Consistent Portfolio Performance

Through over 24 years of experience in the consumer finance industry, we have established conservative and sound underwriting and lending practices to carefully manage our credit exposure as we grow our business, develop new products and enter new markets. We generally do not make loans to customers with less than one year with their current employer and at their current residence, although we also consider numerous other factors in evaluating a potential customer’s creditworthiness, such as unencumbered income and a credit report detailing the applicant’s credit history. Our sound underwriting standards focus on our customers’ ability to affordably make loan payments out of their discretionary income with the value of pledged collateral serving as a credit enhancement rather than the primary underwriting criterion. Portfolio performance is improved by our regular in-person contact with customers at our branches, which helps us to anticipate repayment problems before they occur, and allows us to proactively work with customers to develop solutions prior to default, using repossession only as a last option. In addition, our centralized management information system enables regular monitoring of branch portfolio metrics. Our state operations vice presidents and district supervisors monitor loan underwriting, delinquencies and charge-offs of each branch in their respective regions on a daily basis. In addition, the compensation received by our branch managers and assistant managers has a significant performance component and is closely tied to credit quality among other defined performance targets.

We believe our frequent-contact, relationship-driven lending model, combined with regular monitoring and alignment of employee incentives, improves our overall credit performance. Despite the challenges posed by the sharp economic downturn beginning in 2008, our annual net charge-offs since January 1, 2007 remained consistent, ranging from 6.3% to 8.6% of our average finance receivables. In 2011, our net charge-offs as a percentage of average finance receivables were 6.3%. Our loan loss provision as a percentage of total revenue for 2011 was 17.0%. We believe that our consistent portfolio performance demonstrates the resiliency of our business model throughout economic cycles.

Experienced Management Team

Our executive and senior operations management teams consist of individuals highly experienced in installment lending and other consumer finance services. We believe our executive management team’s experience has allowed us to consistently grow our business while delivering high-quality service to our customers and carefully managing our credit risk. Our executive management team has centralized a number of business procedures, such as marketing and direct mail campaigns, which were formerly conducted at each branch. This has allowed us to achieve annual improvements in our expense efficiency ratio and enhanced control over our individual branches. Our

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management team has also strengthened our underwriting procedures and improved the data monitoring that we apply across our business, including for our direct mail campaigns and our branch location analysis. Our state operations vice presidents average more than 23 years of industry experience and more than 17 years of service at Regional, while our district supervisors average more than 24 years of industry experience and more than five years of service with Regional. As of December 31, 2011, our 170 branch managers had an average of more than four years of service with Regional and over three years as branch managers at Regional.

Our Strategies

Grow Our Branch Network

We intend to continue growing the revenue and profitability of our branch network by increasing volume at our existing branches, opening new branches within our existing geographic footprint and expanding our operations into new states. Establishing local contact with our customers through the expansion of our branch network is key to our frequent-contact, relationship-driven lending model and is embodied in our marketing tagline: “Your Hometown Credit Source.”

n   Existing Branches – We intend to continue increasing same-store revenues, which have grown an average of 14.7% per annum for the five years ended December 31, 2011, by further building relationships in the communities in which we operate and capitalizing on opportunities to offer our customers new loan products as their credit profiles evolve. From 2007 to 2011, we opened 74 new branches, and we expect revenues at these branches will continue to grow faster than our overall same-store revenue growth rate as these branches mature.

n   New Branches – We believe there is sufficient demand for consumer finance services to continue our pattern of new branch growth and branch acquisitions in the states where we currently operate, allowing us to capitalize on our existing infrastructure and experience in these markets. We also analyze detailed demographic and market data to identify favorable locations for new branches. Opening new branches allows us to generate both direct lending at the branches, as well as to create new origination opportunities by establishing relationships through the branches with automobile dealerships and furniture and appliance retailers in the community.

n   New States – We intend to explore opportunities for growth in several states outside our existing geographic footprint that enjoy favorable interest rate and regulatory environments, such as Georgia, Kentucky, Louisiana, Mississippi, Missouri, New Mexico and Virginia. We do not expect to expand into states with unfavorable interest rate or regulatory environments even if those states are otherwise attractive for our business. In December 2011, we opened our first branch in Oklahoma. In February 2012, we leased a location for a branch in New Mexico, and we are applying for a license to operate in New Mexico.

We also believe that the highly fragmented nature of the consumer finance industry and the evolving competitive and economic environment provide attractive opportunities for growth through branch acquisitions although we have no present agreement or plan concerning any specific acquisition.

Continue to Expand and Capitalize on Our Diverse Channels and Products

We intend to continue to expand and capitalize on our multiple channel platform and broad array of offerings as follows:

n   Automobile Purchase Loans – We source our automobile purchase loans through a network of over 2,740 dealers as of December 31, 2011, and have identified over 11,000 additional dealers in our existing geographic footprint. We have hired dedicated marketing personnel to develop relationships with these additional dealers to expand our automobile financing network. We will also seek to capture a larger percentage of the financing activity of dealers in our existing network by continuing to improve our relationships with dealers and our response time for loan applications. We intend to continue expanding the number of franchise dealer relationships through our AutoCredit Source branches to grow our loan portfolio through increased penetration and in January 2012, we opened two AutoCredit Source branches in Texas.

n   Live Check Program – We continue to refine our screening criteria and tracking for direct mail campaigns, which we believe has enabled us to improve response rates and credit performance and allowed us to more than triple the annual number of live checks that we mailed from 2007 to 2011. In 2011, we mailed over 1.5 million live checks as well as 251,000 invitations to apply for loans. We intend to continue to increase our use of live checks to grow our loan portfolio by adding new customers and increasing volume at our branches, creating opportunities to offer new loan products to our existing customers. In addition, we mail

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live checks in new markets shortly before opening new branches, which we believe helps our new branches to more quickly develop a customer base and build finance receivables. The use of live checks is not subject to substantial regulation in any of the states in which we currently operate or any states into which we expect to expand, but is subject to regulation in other jurisdictions. We are not aware of any pending legislation in any of the states in which we operate that would affect our use of live checks.

n   Furniture and Appliance Purchase Loans – As of December 31, 2011, we had a network approximately 250 furniture and appliance retail locations through which we offer our furniture and appliance loans, and have identified over 3,400 additional furniture and appliance retail locations in our existing geographic footprint. We intend to continue to grow our network of furniture and appliance retailers by having our dedicated marketing personnel continue to solicit new retailers, obtain referrals through relationships with our existing retail partners, and, to a lesser extent, reach retailers through trade shows and industry associations. We believe that the furniture and appliance purchase lending markets are currently substantially underpenetrated, particularly with respect to non-prime customers, due to the limited number of lenders providing financing to these customers and the recent curtailment of credit provided by prime financing sources.

n   Online Sourcing – We developed a new channel in late 2008 by offering an online loan application on our consumer website to serve customers who seek to reach us over the Internet. We intend to continue to develop and expand our online marketing efforts and increase traffic to our consumer website through the use of tools such as search engine optimization and paid online advertising.

We believe the expansion of our channels and products, supported by the growth of our branch network, will provide us with opportunities to reach new customers as well as to offer new loan products to our existing customers as their credit profiles evolve. We plan to continue to develop and introduce new products that are responsive to the needs of our customers in the future.

Continue to Focus on Sound Underwriting and Credit Control

We intend to continue to leverage our core competencies in sound underwriting and credit management developed through over 24 years of lending experience as we seek to profitably grow our share of the consumer finance market. Our philosophy is to emphasize sound underwriting standards focused on a customer’s ability to affordably make loan payments, to work with customers experiencing payment difficulties and to use repossession only as a last option. For example, we permit customers to defer payments or refinance delinquent loans under certain circumstances although we do not offer customers experiencing payment difficulties the opportunity to modify their loans to reduce the amount of principal or interest that they owe. A deferral extends the due date of the loan by one month and allows the customer to maintain his or her credit rating in good standing. Gross finance receivables with respect of which any payment was deferred for the year ended December 31, 2011 totaled $51.8 million. In addition to deferrals, we also allow customers to refinance loans. While we typically only allow customers to refinance if their loan is current, we allow customers to refinance delinquent loans on a limited basis if those customers otherwise satisfy our credit standards (other than with respect to the delinquency). We believe that refinancing delinquent loans for certain deserving customers who have made periodic payments allows us to help customers to resolve temporary financial setbacks and to repair or sustain their credit. During 2011, we refinanced only $4.0 million of delinquent loans, representing approximately 0.8% of our total loan volume for the year 2011. As of December 31, 2011, the outstanding gross balance of such refinancings was only $2.7 million, or less than 1.0% of gross finance receivables as of such date. In accordance with this philosophy, we intend to continue to refine our underwriting standards to assess an individual’s creditworthiness and ability to repay a loan. In recent years, we have implemented several new programs to continue improving our underwriting standards and loan collection rates, including our branch “scorecard” program that systematically monitors a range of operating, credit quality and performance metrics. Our management information system enables us to regularly review loan volumes, collections and delinquencies. We believe this central oversight, combined with our branch-level servicing and collections, improves credit performance. We plan to continue to develop strategies to further improve our sound underwriting standards and loan collection rates as we expand.

Our Products

Small Installment Loans

We offer small installment loans ranging from $300 to $2,500 through our branches as well as through our live check program. Our small installment loans are standardized by amount, rate and maturity to reduce documentation and related processing costs and to conform with state lending laws. They are payable in fixed rate, fully amortizing

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equal monthly installments with terms of up to 36 months, and are repayable at any time without penalty. In 2011, the average originated net loan size and term for our small installment loans were $1,022 and 15 months, respectively. Our small installment loans include loans originated through our live check campaigns, which had an average originated net loan size and term of $1,216 and 16 months for 2011. The weighted average yield we earned on our portfolio of small installment loans was 49.3% in 2011. The interest rates, fees and other charges, maximum principal amounts and maturities for our small installment loans vary from state to state, depending upon relevant laws and regulations. See “– Government Regulation.”

The majority of our small installment loans are made to customers who visit one of our branches and complete a standardized credit application. Customers may also complete and submit a small installment loan application by phone or on our consumer website before completing the loan in one of our branches. We carefully evaluate each potential customer’s creditworthiness by examining the individual’s unencumbered income, length of current employment, duration of residence and a credit report detailing the applicant’s credit history.

Our small installment loan approval process is based on the customer’s creditworthiness rather than the value of collateral pledged. Loan amounts are established based on underwriting standards designed to allow customers to affordably make their loan payments out of their discretionary income.

In addition, for small installment loans originated at our branches, we require our customers to submit a list of their non-essential household goods and pledge these goods as collateral. We do not perfect our security interests by filing UCC financing statements in these goods and instead typically collect a non-file insurance fee and obtain non-file insurance.

Each of our branches is equipped to perform immediate background, employment and credit checks, and approve small installment loan applications promptly while the customer waits. Our employees verify the applicant’s employment and credit histories through telephone checks with employers, other employment references, supporting documentation, such as paychecks and earnings summaries, and a variety of third-party credit reporting agencies.

We also source small installment loans through our live check mailing campaigns to pre-screened individuals. These campaigns are often timed to coincide with seasonal demand for loans to finance vacations, back-to-school needs and holiday spending. We also launch live check campaigns in conjunction with opening new branches to help build an initial customer base. Customers can cash or deposit live checks at their convenience thereby agreeing to the terms of the loan as prominently set forth on the check. Each individual we solicit for a live check loan has been pre-screened through a major credit bureau to meet our thorough underwriting criteria. In addition to screening each potential live check recipient’s credit score and bankruptcy history, we also use a proprietary model that assesses 27 different attributes of potential recipients. When a customer enters into a loan by cashing or depositing the live check, our personnel gather additional contact and other information on the borrower to assist us in servicing the loan and offering other products to meet the customer’s financing needs. Small installment loans originated through our live check program are secured by certain non-essential household goods.

The following table sets forth the composition of our finance receivables for small installment loans by state at December 31 of each year from 2007 through 2011:

	AT DECEMBER 31,
	2007			2008			2009			2010			2011
South Carolina		61	%		53	%		47	%		43	%		40	%
Texas		22	%		26	%		27	%		29	%		29	%
North Carolina		16	%		19	%		21	%		20	%		21	%
Tennessee		1	%		2	%		4	%		5	%		6	%
Alabama		—			—			1	%		3	%		4	%
Oklahoma		—			—			—			—			—
Total		100	%		100	%		100	%		100	%		100	%

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The following table sets forth the total number of small installment loans, finance receivables and average per loan for our small installment loans by state at December 31, 2011:

	TOTAL
	NUMBER		FINANCE		AVERAGE
	OF LOANS		RECEIVABLES		PER LOAN
			(In thousands)
South Carolina		56,866	$	51,751	$	910
Texas		42,143		37,825		898
North Carolina		22,047		27,031		1,226
Tennessee		9,034		7,442		824
Alabama		7,260		6,117		843
Oklahoma		87		91		1,046
Total		137,437	$	130,257	$	948

Large Installment Loans

We also offer large installment loans through our branches in amounts ranging from $2,500 to $20,000. Our large installment loans are payable in fixed rate, fully amortizing equal monthly installments with terms of 18 to 60 months, and are repayable at any time without penalty. We require our large installment loans to be secured by a vehicle, which may be an automobile, motorcycle, boat or all-terrain vehicle, as well as certain non-essential household goods. In 2011, our average originated net loan size and term for large installment loans were $3,065 and 27 months, respectively. The weighted average yield we earned on our portfolio of large installment loans was 27.6% for 2011.

Potential customers apply for a large installment loan by visiting one of our branches, where they are interviewed by one of our employees who evaluates the customer’s creditworthiness, including a review of a credit bureau report, before extending a loan. As with our small installment loans, large installment loans are made to individuals based on the customer’s unencumbered income, length of current employment, duration of residence and prior credit experience and credit report history. Loan amounts are established based on underwriting standards designed to allow customers to affordably make their loan payments out of their discretionary income. Our branches perform the same immediate verifications that we perform for small installment loans in order to approve large installment loan applications promptly.

Our branch employees will perform an in-person appraisal of the collateral pledged for a large installment loan using our multipoint checklist and will use one or more third-party valuation sources, such as the National Automobile Dealers Association (NADA) Appraisal Guides, to determine an estimate of the collateral’s value. Regardless of the value of the vehicle, we will not lend in excess of our assessment of the borrower’s ability to repay.

We perfect all first-lien security interests in each pledged vehicle by retaining the title to the collateral in our files until the loan is fully repaid. In certain states, we offer large installment loans secured by second-lien security interests on vehicles, in which case we instead seek to perfect our security interest by recording our lien on the title. We work with customers experiencing payment difficulties to help them to find a solution and view repossession only as a last option. In the event we do elect to repossess a vehicle, we use third-party vendors. We then sell our repossessed vehicle inventory through public sales conducted by independent automobile auction organizations after the required post-repossession waiting period. Any excess proceeds from the sale of the collateral are returned to the customer.

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The following table sets forth the composition of our finance receivables for large installment loans by state at December 31 of each year from 2007 through 2011:

	AT DECEMBER 31,
	2007			2008			2009			2010			2011
South Carolina		72	%		72	%		62	%		57	%		49	%
Texas		20	%		11	%		11	%		9	%		9	%
North Carolina		8	%		15	%		24	%		26	%		27	%
Tennessee		—			2	%		2	%		4	%		8	%
Alabama		—			—			1	%		4	%		7	%
Oklahoma		—			—			—			—			—
Total		100	%		100	%		100	%		100	%		100	%

The following table sets forth the total number of large installment loans, finance receivables and average per loan for our large installment loans by state at December 31, 2011:

	TOTAL NUMBER		FINANCE		AVERAGE
	OF LOANS		RECEIVABLES		PER LOAN
			(In thousands)
South Carolina		5,877	$	18,173	$	3,092
Texas		1,256		3,143		2,503
North Carolina		3,222		9,951		3,088
Tennessee		1,031		3,028		2,937
Alabama		1,023		2,641		2,581
Oklahoma		1		2		2,525
Total		12,410	$	36,938	$	2,976

Automobile Purchase Loans

Our automobile purchase loans are offered through a network of dealers in our geographic footprint, including over 2,000 independent and approximately 740 franchise automobile dealerships as of December 31, 2011. These loans are offered in amounts up to $30,000 and are secured by the financed vehicle. They are payable in fixed rate, fully amortizing equal monthly installments with terms generally of 36 to 72 months, and are repayable at any time without penalty. In 2011, our average originated net loan size and term for automobile purchase loans were $11,690 and 54 months, respectively. The weighted average yield we earned on our portfolio of automobile purchase loans was 22.9% for 2011.

Direct Automobile Purchase Loans. We have business relationships with dealerships throughout our geographic footprint that offer our loans to their customers in need of financing. These dealers will contact one of our local branches to initiate a loan application when they have identified a customer that meets our written underwriting standards. Applications for direct automobile purchase loans may also be received through one of the online credit application networks in which we participate, such as DealerTrack and RouteOne. We will review the application and requested loan terms and propose modifications, if necessary, before providing initial approval inviting the dealer and the customer to come to a local branch to close the loan. Our branch employees interview the customer to verify information in the dealer’s credit application, obtain a credit bureau report on the customer and inspect the vehicle to confirm that the customer’s order accurately describes the vehicle before closing the loan. Our branch employees will perform the same in-person appraisal of the pledged vehicle that they would perform for a vehicle securing a large installment loan.

Indirect Automobile Purchase Loans. Since late 2010, we have also offered indirect automobile purchase loans, which allow customers and dealers to complete a loan at the dealership without the need to visit one of our branches. We only offer indirect loans through larger franchise dealers within our geographic footprint. These larger franchise dealers collect credit applications from their customers and either forward the applications to us specifically or, more commonly, submit the applications to numerous potential lenders through online credit application networks, such as DealerTrack and RouteOne. In early 2011, we introduced AutoCredit Source branches in the Dallas-Ft. Worth, Texas and Charlotte, North Carolina metropolitan areas, which focus solely on originating,

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underwriting and servicing indirect automobile purchase loans. Since opening these two new AutoCredit Source branches, we have already established over 480 indirect dealer relationships through these branches. We opened two additional AutoCredit Source branches in Texas in January 2012. In our other markets, indirect automobile purchase loan applications are processed by our centralized underwriting department. Once the loan is approved, the dealer closes the loan on a standardized retail installment sales contract at the point of sale. Subsequently, we purchase the loan and then service and collect on it locally either through an AutoCredit Source branch or our nearest branch.

Automobile purchase loans are made to individuals based on the customer’s unencumbered income, length of current employment, duration of residence and prior credit experience and credit report history. Loan amounts are established based on underwriting standards designed to allow customers to affordably make their loan payments out of their discretionary income. We perfect our collateral by recording our lien and retaining the vehicle’s title. Our underwriting standards, however, are primarily based on the creditworthiness of the borrower and we view repossession only as a last option.

The following table sets forth the composition of our finance receivables for automobile purchase loans by state at December 31 of each year from 2007 through 2011:

	AT DECEMBER 31,
	2007			2008			2009			2010			2011
South Carolina		76	%		64	%		61	%		64	%		55	%
Texas		3	%		7	%		5	%		5	%		13	%
North Carolina		21	%		29	%		32	%		27	%		26	%
Tennessee		—			—			2	%		3	%		4	%
Alabama		—			—			—			1	%		2	%
Oklahoma		—			—			—			—			—
Total		100	%		100	%		100	%		100	%		100	%

The following table sets forth the total number of automobile purchase loans, finance receivables and average per loan for our automobile purchase loans by state at December 31, 2011:

	TOTAL NUMBER		FINANCE		AVERAGE
	OF LOANS		RECEIVABLES		PER LOAN
			(In thousands)
South Carolina		8,861	$	70,785	$	7,988
Texas		1,510		16,985		11,248
North Carolina		4,241		33,406		7,877
Tennessee		515		4,644		9,018
Alabama		298		2,840		9,531
Oklahoma		—		—		—
Total		15,425	$	128,660	$	8,341

Furniture and Appliance Purchase Loans

We began offering loans to finance the purchase of furniture and appliances in late 2009. Our furniture and appliance purchase loans are indirect installment loans structured as retail installment sales contracts that are offered in amounts of up to $7,500. They are payable in fixed rate, fully amortizing equal monthly installments with terms of between six and 48 months, and are repayable at any time without penalty. In 2011, our average originated net loan size and term for furniture and appliance purchase loans were $1,428 and 25 months, respectively. The weighted average yield we earned on our portfolio of furniture and appliance purchase loans was 19.5% for 2011.

Our furniture and appliance purchase loans provide financing for customers who may not qualify for prime financing from traditional lenders. We believe that the furniture and appliance purchase lending markets are underserved by sources of non-prime financing. As compared to other limited sources of non-prime financing, our furniture and appliance loans often offer more attractive interest rates and terms to customers.

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Our furniture and appliance purchase loans are indirect loans made through a retailer at the point of sale without the need for the customer to visit one of our branches, similar to our indirect automobile purchase loans. We partner with furniture and appliance retailers who offer our furniture and appliance purchase loans directly to their customers. As of December 31, 2011, we provided furniture and appliance purchase loans to customers at approximately 250 furniture and appliance retail locations, including 79 franchise store locations of the largest furniture retailer in the United States. By providing a source of non-prime financing, we are often able to help our retailer partners complete sales to customers who may not otherwise have been able finance their purchase.

Our retail partners typically submit applications to us online or via facsimile while the customer waits. If a customer is not accepted by a retailer’s prime financing provider, we will evaluate the customer’s credit based on the same application data, without the need for the customer to complete an additional form. Underwriting for our furniture and appliance purchase loans is conducted through a centralized underwriting team, RMC Retail.

We individually evaluate the creditworthiness of potential furniture and appliance purchase loan customers using the same information and resources as for our other loan products, including a credit bureau report, before providing a response to the retailer within ten minutes. If we approve the loan, the retailer completes our standardized retail installment sales contract, which includes recording a security interest in the purchased furniture or appliance. Loan amounts are established based on underwriting standards designed to allow customers to affordably make their loan payments out of their discretionary income. The collections of such loans are performed within our branches. We work with customers experiencing payment difficulties to help them to find a solution and view repossession of the collateral only as a last option.

The following table sets forth the total number of furniture and appliance purchase loans, the finance receivables and average per loan for our furniture and appliance purchase loans by state at December 31, 2011:

	TOTAL NUMBER		FINANCE		AVERAGE
	OF LOANS		RECEIVABLES		PER LOAN
			(In thousands)
South Carolina		952	$	1,103	$	1,158
Texas		5,358		6,521		1,217
North Carolina		2,571		2,661		1,035
Tennessee		83		96		1,154
Alabama		246		358		1,456
Oklahoma		—		—		—
Total		9,210	$	10,739	$	1,166

Insurance Products

We offer our customers a number of different optional insurance products and other payment protection in connection with our loans. The insurance products we offer customers are voluntary and not a condition of the loan. Our insurance products, including the types of products offered and the terms and conditions thereof, vary from state to state in compliance with applicable laws and regulations. We do not sell insurance to non-borrowers. In 2011, insurance income, net, was $8.9 million, or 8.4% of our total revenue.

We market and sell insurance policies as an agent for an unaffiliated third-party insurance company. The policies are then ceded to our wholly-owned reinsurance subsidiary, RMC Reinsurance, Ltd., which then bears the full risk of the policy. For the sale of insurance policies, we, as agent, write policies only within the limitations established by our agency contracts with the unaffiliated third-party insurance company.

Credit Life Insurance, Credit Accident and Health Insurance and Involuntary Unemployment Insurance. We market and sell optional credit life insurance, credit accident and health insurance and involuntary unemployment insurance in connection with our loans in selected markets. Credit life insurance provides for the payment in full of the borrower’s credit obligation to the lender in the event of the borrower’s death. Credit accident and health insurance, which is only offered in conjunction with credit life insurance, provides for the repayment of loan installments to the lender that come due during an insured’s period of income interruption resulting from disability from illness or injury. Involuntary unemployment insurance provides for repayment of loan installments in the event

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the borrower is no longer employed as the result of a layoff or reduction in workforce. All customers purchasing these types of insurance from us sign a statement on the loan contract affirming that they understand that their purchase of insurance is not a condition of our granting the loan.

Collateral Protection Collision Insurance. Before we originate an automobile purchase loan or large installment loan, we require the borrower to provide proof of acceptable liability and collision insurance on the vehicle securing the loan. While we do not offer automobile insurance to our customers, we will obtain collateral protection collision insurance (“CPI”) on behalf of customers who permit their other insurance coverage to lapse. If we obtain CPI for a vehicle, the customer has the opportunity to provide proof of insurance to cancel the CPI and receive a refund of all unearned premiums.

Property Insurance. We also require that our customers provide proof of acceptable insurance for any personal property securing a loan. Customers can provide proof of such insurance purchased from a third party (such as homeowners or renters insurance) or can purchase the property insurance that we offer.

Our Branches

Our branches are generally conveniently located in visible, high traffic locations, such as shopping centers. We do not need to keep large amounts of cash at our branches because we disburse our loans by check, rather than by cash payment. As a result, our branches have an open, welcoming and hospitable layout without the need for secure booths separating our customers from our employees.

The following table sets forth the number of branches as of the dates indicated:

	AT DECEMBER 31,
	2007		2008		2009		2010		2011
South Carolina		59		59		58		61		69
Texas		23		30		31		35		44
North Carolina		13		18		18		19		24
Tennessee		1		5		6		10		18
Alabama		—		—		4		9		14
Oklahoma		—		—		—		—		1
Total		96		112		117		134		170

During the period presented in the table above, we grew net branches by 74 branches. During the same period, we closed only one branch, which was consolidated with another nearby branch. In 2011, we opened 36 new branches including our first branch in Oklahoma. In evaluating whether to locate a branch in a particular community, we examine several factors, including the demographic profile of the community, demonstrated demand for consumer finance, the regulatory and political climate and the availability of suitable employees to staff, manage and supervise the new branch. We also look for a concentration of independent and franchise automobile dealers as well as furniture and appliance retailers in order to build our sales finance business.

The following table sets forth the average finance receivables per branch based on maturity:

	AVERAGE FINANCE
	RECEIVABLES PER
AGE OF BRANCH	BRANCH AS OF		PERCENTAGE INCREASE			NUMBER OF
(AS OF DECEMBER 31, 2011)	DECEMBER 31, 2011		FROM NEWER CATEGORY			BRANCHES
	(In thousands)
Branches open less than one year	$	944					36
Branches open one to three years	$	1,045		10.6	%		23
Branches open three to five years	$	1,924		84.2	%		23
Branches open five years or more	$	2,322		20.6	%		88

The average contribution to operating income from our branches has historically increased as our branches mature.

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The following table sets forth the average operating income contribution per branch for the twelve months ended December 31, 2011 based on maturity of the branch.

	AVERAGE BRANCH
AGE OF BRANCH	OPERATING INCOME		PERCENTAGE INCREASE			NUMBER OF
AS OF DECEMBER 31, 2011	CONTRIBUTION		FROM NEWER CATEGORY			BRANCHES
Branches open less than one year	$	7,800					36
Branches open one to three years	$	162,000		1,976.9	%		23
Branches open three to five years	$	319,000		96.9	%		23
Branches open five years or more	$	516,000		61.8	%		88

We calculate the average branch contribution as total revenues generated by the branch less the expenses directly attributable to the branch, including the provision for losses associated with loans closed at the branch and operating expenses such as personnel, lease and interest expenses. General corporate overhead, including management salaries, are not attributable to any individual branch. Accordingly, the sum of branch contributions from all of our branches is greater than our income before taxes.

Payment and Loan Collections

We have implemented company-wide payment and loan collection policies and practices, which are designed to maintain consistent portfolio performance and to facilitate regulatory compliance. Our district supervisors and state vice presidents oversee the training of each branch employee in these policies and practices, which include standard procedures for communicating with customers in person, over the telephone and by mail. Our corporate procedures require the maintenance of a log of collection activity for each account. Our state vice presidents, district supervisors and internal audit teams regularly review these records to ensure compliance with our company procedures, which are designed to comply with applicable regulatory requirements. See “Risk Factors—We may be limited in our ability to collect on our loan portfolio and the security interests securing a significant portion of our loan portfolio are not perfected, which may increase our loan losses.” Our corporate policies also include encouraging customers to visit our branches to make payments. For more information on our oversight structures and procedures, see “—Employees—Monitoring and Supervision” below.

We estimate that approximately 70% of monthly loan payments are received from customers in person at our branches, with the remaining payments generally made by mail. Encouraging payment at the branch allows us to maintain regular contact with our customers and further develop our overall relationship with them. We believe that the development and continual reinforcement of personal relationships with customers improves our ability to monitor their creditworthiness, reduces credit risk and generates opportunities to offer new loan products to our customers as their credit profiles evolve. To reduce late payment risk, branch employees encourage customers to inform us in advance of expected payment problems.

Branch employees also promptly contact customers following the first missed payment due date and thereafter remain in close contact with such customers, including through phone calls and letters. Our branch employees also contact a delinquent customer’s employer and other references listed on the customer’s loan application. We use third-party skip tracing services to locate delinquent customers in the event that our branch employees are unable to do so. In certain cases, we seek a legal judgment against delinquent customers.

We obtain security interests for all of our loans, and we perfect the security interests in vehicles securing large installment loans and automobile purchase loans. For a discussion of the collateral requirements as they relate to each of our loan products, see “—Small Installment Loans” on page 63, “—Large Installment Loans” on page 65, “—Automobile Purchase Loans” on page 66 and “—Furniture and Appliance Purchase Loans” on page 67. Our district supervisors and internal audit teams regularly review collateral documentation on our loan products to customers to confirm compliance with our guidelines. We perfect all first-lien security interests in each pledged vehicle by retaining the title to the collateral in our files until the loan is fully repaid. In certain states, we offer large installment loans secured by second-lien security interests on vehicles, in which case we instead seek to perfect our security interest by recording our lien on the title. We only initiate repossession efforts when an account is seriously delinquent, we have exhausted other means of collection and, in the opinion of management, the

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customer is unlikely to make further payments. Since 2010, we have sold substantially all repossessed vehicles through public sales conducted by independent automobile auction organizations, after the required post-possession waiting period. Losses on the sale of repossessed collateral are charged to the allowance for loan losses.

In certain cases, we permit our existing customers to refinance their loans. Our refinancings of existing loans are divided into three categories: refinancings of loans in an amount greater than the original loan amount, renewals of existing loans that are current and renewals of existing loans that are delinquent, which represented 15.6%, 35.6% and 0.8%, respectively, of our loan originations in 2011.

Any refinancing of a loan in an amount greater than the original amount generally requires an underwriting review to determine a customer’s qualification for the increased loan amount. Furthermore, we obtain a new credit report and may complete a new application on renewals of existing loans if they have not completed one within the prior two years. We do not refinance our automobile purchase or furniture and appliance purchase loans.

While we typically only allow customers to refinance if their loan is current, we allow customers to refinance delinquent loans on a limited basis if those customers otherwise satisfy our credit standards (other than with respect to the delinquency). We believe that refinancing delinquent loans for certain deserving customers who have made periodic payments allows us to help customers to resolve temporary financial setbacks and to repair or sustain their credit. During 2011, we refinanced only $4.0 million of delinquent loans, and as of December 31, 2011, the outstanding balance of such refinancings was only $2.7 million, or less than 1.0% of gross finance receivables as of such date.

We fully reserve on our financial statements for accounts upon 180 days of contractual delinquency, however, we continue to pursue payments on such loans, which we believe improves overall recoveries. Accounts may only be charged off by our district supervisors or state vice presidents following review of the collection work applied to them. We continue to attempt to collect on charged-off loans centrally, and we do not sell any of our charged-off accounts to third-party debt purchasers, nor do we place any debt with third-party collection agencies.

Information Technology

Since 1999, we have used a data processing software package developed and owned by ParaData Financial Systems and have invested in customizing the ParaData software to improve the management of our specific processes and product types. The ParaData software is also used by many of our competitors. With this software package, we are able to fully automate all of our loan account processing and servicing. The system provides thorough management information and control capabilities, including monitoring of all loans made, collections, delinquencies and other functions. We believe that the ParaData loan management system is adequate for our current business needs and that it will support our expected growth.

Competition

The consumer finance industry is highly fragmented, with numerous competitors. The competition we face for each of our loan products is distinct.

Small and Large Installment Loans

The small and large installment loan industry is highly fragmented in the six states in which we currently operate. Our largest installment loan competitor in most of the markets in which we operate is World Acceptance Corp., an installment finance lender with approximately 1,120 branches, approximately half of which are located in states that we serve. Additionally, we compete with Security Finance Corporation for small installment loans as well as for automobile purchase loans. We believe that Security Finance Corporation has in excess of 1,100 branches nationwide. We also compete with a handful of private competitors with between 100 to 250 branches in certain of the states in which we operate. We believe that the majority of our competitors are independent operators with generally less than 100 branches. We believe that competition between installment consumer loan companies occurs primarily on the basis of price, breadth of loan product offerings, flexibility of loan terms offered and the quality of customer service provided. While underbanked customers may also use alternative financial services providers, their products offer different terms and typically carry substantially higher interest rates than our installment loans. Accordingly, we believe alternative financial services providers are not an attractive alternative for customers who meet our underwriting standards, which are generally stricter than the underwriting standards of alternative financial services providers. Our small and large installment loans also compete to a lesser extent with online or peer-to-peer lenders and issuers of non-prime credit cards.

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Automobile Purchase Loans

In the automobile purchase loan industry, we compete with numerous financial service companies, including non-prime auto lenders, dealers that provide financing, captive finance companies owned by automobile manufacturers and, to a limited extent, credit unions. Competition among automobile purchase lenders is largely on the basis of interest rates charged, the quality of credit accepted, the flexibility of loan terms offered, the speed of approval and the quality of customer service provided. Much of the automobile purchase loan marketplace has shifted to processing loan applications generated at dealers through such online credit application networks as DealerTrack or RouteOne where prompt service and response times to dealers and their customers are essential to compete in this market.

Furniture and Appliance Purchase Loans

In the furniture and appliance purchase loan industry, there are currently only a small number of lenders dedicated to non-prime furniture and appliance purchase loans. To the extent customers require furniture and appliance financing but do not qualify for a retailer’s prime sources of financing, the main alternatives are rent-to-own financing providers and credit card companies. Our furniture and appliance purchase loans are typically made at competitive rates, and competition is largely on the same basis as automobile purchase loans. Point-of-sale financing decisions must be made rapidly while the customer is on the sales floor. We provide responses to customers in less than ten minutes, and we staff RMC Retail, our centralized furniture and appliance purchase loan underwriting team, with multiple shifts seven days per week during peak retail furniture shopping hours to ensure rapid response times.

Seasonality

Our loan volume and corresponding finance receivables follow seasonal trends. Demand for our loans is typically highest during the fourth quarter, largely due to holiday spending. Loan demand has generally been the lowest during the first quarter, largely due to decreases in demand as a result of the timing of income tax refunds. During the remainder of the year, our loan volume typically grows from customer loan activity. In addition, we typically generate higher loan volumes in the second half of the year from our live check campaigns, which are timed to coincide with seasonal consumer demand. Consequently, we experience significant seasonal fluctuations in our operating results and cash needs.

Employees

As of December 31, 2011, we had approximately 670 employees, none of whom were represented by labor unions. We consider our relations with our personnel to be good. We experience a high level of turnover among our entry-level employees, which we believe is typical of the consumer finance industry. However, as of December 31, 2011, our 170 branch managers had an average of more than four years of service at Regional and over three years as branch managers at Regional.

Staff and Training

Local branches are generally staffed with three to four employees. The branch manager oversees operations of the branch and is responsible for approving all loan applications. Each branch has one or two assistant managers who contact delinquent customers, review loan applications and prepare operational reports. Each branch also has a customer service representative who takes loan applications, processes loan applications, processes payments and assists in the preparation of operational reports, collection efforts and marketing activities. Larger volume branches may employ additional assistant managers and customer service representatives.

New employees are tested on a detailed training manual that outlines our operating policies and procedures during the first year of employment. In addition, each branch provides weekly in-branch training sessions and periodic training sessions outside the branch.

Monitoring and Supervision

We have robust oversight structures and procedures in place to ensure compliance with our operational standards and policies and the applicable regulatory requirements in each state. All of our loans are prepared using our loan management software, which is programmed to compute fees, interest rates and other loan terms in compliance with our underwriting standards and applicable regulations. We work with our regulatory counsel to develop standardized forms and agreements for each state, ensuring consistency and compliance.

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Our loan operations are organized by geography. We have one state vice president for each of South Carolina and North Carolina, one state vice president to oversee Texas and Oklahoma and one state vice president to oversee Alabama and Tennessee. Several levels of management monitor and supervise the operations of each of our branches. Branch managers are directly responsible for the performance of their respective branches. District supervisors are responsible for the performance of between six and ten branches in their districts, communicating with the branch managers of each of their branches at least weekly and visiting the branches at least monthly. Four state vice presidents monitor the performance of all of our branches, primarily through communications with district supervisors. These state vice presidents communicate with the district supervisors of each of their districts at least weekly and visit each of their branches at least quarterly. Our information technology platform enables us to regularly monitor our portfolio, which we believe improves our credit performance.

At least once per year, each branch undergoes an audit by our internal auditors. These audits include an examination of cash balances and compliance with our loan approval, review and collection procedures and compliance with state and federal laws and regulations. Branches that do not receive a satisfactory grade from our internal audit team are automatically re-audited within 90 days in order to confirm operational improvements.

In 2009, we introduced a “scorecard” program to systematically monitor a range of operating metrics at each branch. Our scorecard system currently tracks 15 different dimensions of operations, including the performance and compliance of each branch on a series of underwriting metrics. Our headquarters staff provides central oversight by reconciling on a daily basis all account payments, cash balances and bank deposits for each of our branches. Senior management receives daily delinquency, loan volume, charge-off and other statistical reports consolidated by state and has access to these daily reports for each branch. On a monthly basis, district supervisors audit the operations of each branch in their geographic area and submit standardized reports detailing their findings to senior management. District supervisors and state vice presidents meet with the executive management team once per quarter to review branch scorecard results as well as to discuss other operational and financial performance results against our targets and historical standards. Remedial plans are put in place to correct any underperformance.

Properties

We own our home office buildings in Greenville, South Carolina, which total approximately 9,500 square feet. Our $1,500,000 line of credit is secured by a mortgage on this property. Each of our 170 branches, as of December 31, 2011, is leased under fixed term lease agreements. Our branches are located throughout South Carolina, Texas, North Carolina, Tennessee, Alabama and Oklahoma, and the average branch size is approximately 1,200 square feet.

Government Regulation

Consumer finance companies are subject to extensive regulation, supervision and licensing under various state and federal statutes, ordinances and regulations. Many of these regulations impose detailed constraints on the terms of our loans or the retail installment sales contracts that we purchase, lending forms and operations. The software that we use to originate loans is designed to ensure compliance with all applicable lending regulations.

State Lending Regulation

In general, state statutes establish maximum loan amounts and interest rates and the types and maximum amounts of fees, insurance premiums and other fees that may be charged for both direct and indirect lending. Specific allowable charges vary by state. Statutes in Texas allow for indexing the maximum small loan amounts to the Consumer Price Index and set maximum rates for automobile purchase loans based on the age of the vehicle. Except in the state of North Carolina, our direct loan products are pre-computed loans in which the finance charge is a combination of origination or acquisition fees, account maintenance fees, monthly account handling fees and other charges permitted by the relevant state laws. Direct loans in North Carolina are structured as simple interest loans as prescribed by state law.

In addition, state laws regulate the keeping of books and records and other aspects of the operation of consumer finance companies. State and federal laws regulate account collection practices. Generally, state regulations also establish minimum capital requirements for each local branch. State agency approval is required to open new branches.

Each of our branches is separately licensed under the laws of the state in which the branch is located. Licenses granted by the regulatory agencies in these states are subject to renewal every year and may be revoked for failure to comply with applicable state and federal laws and regulations. In the states in which we currently operate, licenses

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may be revoked only after an administrative hearing. We believe we are in compliance with state law and regulations applicable to our lending operations in each state.

We and our operations are regulated by several state agencies, including the Consumer Finance Division of the South Carolina Board of Financial Institutions, the South Carolina Department of Consumer Affairs, the North Carolina Office of the Commissioner of Banks, the Texas Office of the Consumer Credit Commissioner, the Tennessee Department of Financial Institutions, the Alabama State Banking Department and the Oklahoma Department of Commerce. These state regulatory agencies audit our branches from time to time, and each state agency performs an annual compliance audit of our operations in that state.

Insurance Regulation

Charges for credit insurance and similar payment protection products are made at authorized statutory rates and are stated separately in our disclosure to customers, as required by the Truth in Lending Act and by various applicable state laws.

We are also subject to state regulations governing insurance agents in the states in which we sell insurance. State insurance regulations require that insurance agents be licensed and limit the premium amount charged for such insurance. Our captive insurance subsidiary is regulated by the insurance authorities of the Turks and Caicos Islands of the British West Indies, where the subsidiary is organized and domiciled.

Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010

At the federal level, Congress enacted comprehensive financial regulatory reform legislation on July 21, 2010. A significant focus of the new law, known as the Dodd-Frank Act, is heightened consumer protection. The Dodd-Frank Act established a new body, called the CFPB, which has regulatory, supervisory and enforcement powers over providers of consumer financial products and services, including explicit supervisory authority to examine and require registration of non-depository lenders and promulgate rules that can affect the practices and activities of lenders.

Although the Dodd-Frank Act expressly provides that the CFPB has no authority to establish usury limits, some consumer advocacy groups have suggested that various forms of alternative financial services or specific features of consumer loan products should be a regulatory priority and it is possible that at some time in the future the CFPB could propose and adopt rules making such lending services materially less profitable or impractical, which may include installment finance loans or other products that we offer.

The Dodd-Frank Act also gives the CFPB the authority to examine and regulate large nondepository financial companies and gives the CFPB authority over anyone deemed by rule to be a “larger participant of a market for other consumer financial products or services.” The CFPB is required to issue a rule to define covered persons that are such “larger participants” after consultation with the Federal Trade Commission, not later than July 21, 2012. The CFPB contemplates regulating the installment lending industry as part of the “consumer credit and related activities” market. However, this so-called “larger participant rule” will not impose substantive consumer protection requirements, but rather will provide to the CFPB the authority to supervise larger participants in certain markets, including by requiring reports and conducting examinations to ensure, among other things, that they are complying with existing federal consumer financial law. The rule will likely cover only the largest installment lenders. We do not yet know whether the definition of larger participant will cover us.

In addition to the grant of certain regulatory powers to the CFPB, the Dodd-Frank Act gives the CFPB authority to pursue administrative proceedings or litigation for violations of federal consumer financial laws. In these proceedings, the CFPB can obtain cease and desist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of affirmative relief) and monetary penalties.

Other Federal Laws and Regulations

In addition to the Dodd-Frank Act and state and local laws and regulations, numerous other federal laws and regulations affect our lending operations. These laws include the Truth in Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Gramm-Leach-Bliley Act and in each case the regulations thereunder, and the Federal Trade Commission’s Credit Practices Rule. These laws require us to provide complete disclosure of the principal terms of each loan to the borrower, prior to the consummation of the loan transaction, prohibit misleading advertising, protect against discriminatory lending practices and proscribe unfair credit practices.

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Under the Truth in Lending Act and Regulation Z promulgated thereunder, we must disclose certain material terms related to a credit transaction, including, but not limited to, the annual percentage rate, finance charge, amount financed, total of payments, the number and amount of payments and payment due dates to repay the indebtedness.

Under the Equal Credit Opportunity Act and Regulation B promulgated thereunder, we cannot discriminate against any credit applicant on the basis of any protected category, such as race, color, religion, national origin, sex, marital status or age. We are also required to make certain disclosures regarding consumer rights and advise customers whose credit applications are not approved of the reasons for the rejection.

Under the Fair Credit Reporting Act, we must provide certain information to customers whose credit applications are not approved on the basis of a report obtained from a consumer reporting agency, promptly update any credit information reported to a credit reporting agency about a customer and have a process by which customers may inquire about credit information furnished by us to a consumer reporting agency.

Under the Gramm-Leach-Bliley Act, we must protect the confidentiality of our customers’ nonpublic personal information and disclose information on our privacy policy and practices, including with regard to the sharing of customers’ nonpublic personal information with third parties. This disclosure must be made to customers at the time the customer relationship is established and, in some cases, at least annually thereafter.

The Federal Trade Commission’s Credit Practices Rule limits the types of property we may accept as collateral to secure a consumer loan.

Violations of these statutes and regulations may result in actions for damages, claims for refund of payments made, certain fines and penalties, injunctions against certain practices and the potential forfeiture of rights to repayment of loans. Changes to any of these statutes and regulations may have a materially adverse effect on our business as described under “Risk Factors – Risks Related to Regulation.”

Legal Proceedings

We are involved in routine litigation and claims primarily arising out of our operations in the normal course of business, which we do not expect to have a material adverse effect upon our consolidated financial statements.

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MANAGEMENT

Directors, Director Nominees and Executive Officers

The following table sets forth the names, ages and positions of our directors, director nominees and executive officers as of the date of this prospectus.

NAME	AGE		POSITION
David Perez		43	Chairman of the Board of Directors
Roel C. Campos		63	Director Nominee
Richard T. Dell’Aquila		35	Director
Richard A. Godley		63	Director
Jared L. Johnson		40	Director
Alvaro G. de Molina		54	Director Nominee
Carlos Palomares		67	Director Nominee
Erik A. Scott		44	Director
Thomas F. Fortin		48	Chief Executive Officer and Director Nominee
C. Glynn Quattlebaum		65	President and Chief Operating Officer
Robert D. Barry		68	Executive Vice President and Chief Financial Officer
A. Michelle Masters		37	Senior Vice President, Strategic Development and Corporate Secretary

David Perez has served as the chairman of the board of directors since April 2011 and has been a director of Regional since March 2007. He has served as a Managing Director with Palladium since 2003. Previously, he held senior private equity positions at General Atlantic Partners and Atlas Venture, and also held positions at Chase Capital Partners and James D. Wolfensohn, Inc. Mr. Perez serves on the Board of Directors of Palladium’s privately held portfolio companies Aconcagua Holdings, Inc., American Gilsonite Company, Capital Contractors, Inc., DolEx Dollar Express, Inc., Jordan Healthcare Holdings, Inc. and Prince Minerals, Inc. Mr. Perez serves as the Chair of the Board of Directors of the National Association of Investment Companies (NAIC), is a member of the Council on Foreign Relations, and is the President of the Board of Directors of Ballet Hispánico. Mr. Perez earned a B.S./M.S. degree from the Dresden University of Technology, an M.Eng. degree in Engineering Management from Cornell University and an M.B.A. degree from Harvard Business School.

Roel C. Campos is a director nominee. Mr. Campos is a partner with the law firm of Locke Lord Bissell & Liddell LLP, which he joined in April 2011. He practices in the areas of securities regulation, corporate governance and securities enforcement. He had previously been a partner in the law firm of Cooley Godward Kronish LLP from September 2007 to April 2011. Prior to that, he received a presidential appointment and served as a Commissioner of the Securities and Exchange Commission (“SEC”) from 2002 to 2007. Prior to serving with the SEC, Mr. Campos was a founding partner of a Houston-based radio broadcaster. Earlier in his career, he practiced corporate law and served as a federal prosecutor in Los Angeles, California. Mr. Campos is a trustee for the Managed Portfolio Series, an open-end mutual fund registered with the SEC under the Investment Company Act. Mr. Campos was selected by President Barack Obama to serve on his citizen Presidential Intelligence Advisory Board. Mr. Campos also serves on the Advisory Board for the Public Company Accounting Oversight Board and serves on various non-profit boards. Mr. Campos earned a B.S. degree from the United States Air Force Academy, an M.B.A. degree from the University of California, Los Angeles, and a J.D. degree from Harvard Law School.

Richard T. Dell’Aquila has been a director of Regional since July 2010. Mr. Dell’Aquila is a Principal at Parallel, which he joined in March 2010. Prior to joining Parallel, Mr. Dell’Aquila was a Principal at Southfield Capital Advisors LLC from January 2006 to February 2010, and has previously held positions at Sasco Capital, Inc., Pangea, Ltd, and Bear, Stearns & Co. Inc. Mr. Dell’Aquila also serves on the boards of Parallel’s privately held portfolio companies Quartermaster, Inc., USA Discounters, Inc. and Newhall Laboratories, Inc. Mr. Dell’Aquila graduated from Hamilton College where he received a B.A. degree in Economics. He also studied as an undergraduate at Oxford University.

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Richard A. Godley has been a director of Regional since its inception in 1987 and is its founder. He previously served as President and Chief Executive Officer of Regional from 1987 until January 2006 and served as chairman of the board of directors from January 2006 until March 2007. Prior to founding Regional, Mr. Godley served as Senior Vice President of World Acceptance Corporation. Mr. Godley is a veteran of the U.S. Army and served in Vietnam from 1968 to 1969.

Jared L. Johnson has been a director of Regional since 2009. Mr. Johnson is a Managing Director at Parallel, which he joined as a Principal in 2003. Prior to joining Parallel, Mr. Johnson was a Vice President with Summit Partners and has previously held positions with Robertson Stephens and Kirkland Messina. Mr. Johnson also serves on the boards of Parallel’s privately held portfolio companies Marmalade Holdings, Inc., New Moosejaw, LLC, Quartermaster, Inc. and TFO Holdings, Inc. Mr. Johnson is a graduate of Stanford University, where he received an A.B. degree in American Studies.

Alvaro G. de Molina is a director nominee. Until 2009, Mr. de Molina was the Chief Executive Officer of GMAC LLC, which he had originally joined as Chief Operating Officer in 2007. Since departing GMAC LLC, Mr. de Molina has been a private investor. He also joined Cerberus Capital Management where he worked with the operations group for a period during 2007, following a 17-year career at Bank of America where he most recently served as its Chief Financial Officer from 2005 until 2007. During his tenure at Bank of America, Mr. de Molina also served as Chief Executive Officer of Banc of America Securities, President of Global Capital Markets and Investment Banking, head of Market Risk Management and Corporate Treasurer. Previously, he also served in key roles at JPMorgan Chase Bank, N.A., Becton, Dickinson and Company and PriceWaterhouse LLP (now PricewaterhouseCoopers LLP). Mr. de Molina is a member of the Board of Visitors of Duke University’s Fuqua School of Business. He holds a B.S. degree in Accounting from Fairleigh Dickinson University and an M.B.A. degree from Rutgers Business School and is a graduate of the Duke University Advanced Management Program.

Carlos Palomares is a director nominee. Since 2007, Mr. Palomares has been President and Chief Executive Officer of SMC Resources, a consulting practice that advises senior executives on business and marketing strategy. From 2001 to 2007, Mr. Palomares was Senior Vice President at Capital One Financial Corp. (Capital One), and he was Chief Operating Officer of Capital One Federal Savings Bank banking unit from 2004 to 2007. Prior to joining Capital One, Mr. Palomares held a number of senior positions with Citigroup Inc. and its affiliates, including Chief Operating Officer of Citibank Latin America Consumer Bank from 1998 to 2001, Chief Financial Officer of Citibank North America Consumer Bank from 1997 to 1998, Chairman and CEO of Citibank Italia from 1990 to 1992 and President and CEO of Citibank FSB Florida from 1992 to 1997. Mr. Palomares serves on the board of directors of Pan American Life Insurance Group, Inc. and the Coral Gables Trust Company. He also serves on the board of the Florida chapter of the National Association of Corporate Directors. Mr. Palomares earned a B.S. degree in Quantitative Analysis from New York University.

Erik A. Scott has been a director of Regional since 2007. He currently serves as a Managing Director with Palladium, a position he has held since 2010. From 2005 to 2010, he was a Vice President and Principal with Palladium. Previously, he was a Principal at FdG Associates and Parthenon Capital and also held positions at Allied Capital and Bowles Hollowell Conner & Co. Mr. Scott also serves on the boards of Palladium’s privately held portfolio companies ABRA Auto Body & Glass, Capital Contractors, Inc. and DolEx Dollar Express, Inc. Mr. Scott earned a B.A. degree in Economics with a concentration in Spanish from Vanderbilt University and an M.B.A. degree from the Darden Graduate School of Business Administration at the University of Virginia.

Thomas F. Fortin was appointed Chief Executive Officer of Regional in March 2007 and is also a director nominee. Prior to joining Regional, Mr. Fortin was, from 2005 to 2007, President of Cogent Strategic Advisors, LLC, a consulting firm serving institutional investors. From 1998 to 2005, Mr. Fortin was Vice President, Development for EJB Group, Inc., a private investment holding company based in Charlotte, North Carolina. From 1992 to 1998, Mr. Fortin was Vice President and Chief Financial Officer of InLight Solutions, Inc., a medical technology business located in Albuquerque, New Mexico that he co-founded. He also held positions at Bowles Hollowell Conner & Co. and Trammell Crow Company. In 2008, Mr. Fortin was elected to the Board of Directors of the American Financial Services Association (“AFSA”), the principal trade organization for the installment lending industry. He currently serves on the Executive Committee of the Board of Directors of AFSA, is Vice Chairman of the AFSA Independents Section and is the Chairman of the AFSA Political Action Committee. Mr. Fortin earned a B.S. degree in Industrial Engineering from Stanford University and an M.B.A. degree from Harvard Business School.

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Mr. Fortin served as an Operating Partner of Parallel from June 2003 to March 2007. He is also the brother-in-law of F. Barron Fletcher, III, the managing member of Parallel, one of the sponsors.

C. Glynn Quattlebaum has served as President and Chief Operating Officer of Regional since March 2007. Prior to that time, he served Regional as Senior Vice President, Operations from 1998 to 2007. He is a co-founder of Regional and has been employed by Regional since its founding in 1987. Prior to joining Regional, Mr. Quattlebaum was a Supervisor with World Acceptance Corporation, where he began his career in consumer finance in 1974. Mr. Quattlebaum also serves on the board of the South Carolina Independent Consumer Finance Association.

Robert D. Barry, CPA, was appointed Executive Vice President and Chief Financial Officer of Regional in March 2007. Prior to joining Regional, Mr. Barry was the Managing Member of AccessOne Mortgage Company, LLC in Raleigh, North Carolina from 1997 to 2007. During this time, he also served as part-time Chief Financial Officer for Patriot State Bank, Fuquay-Varina, North Carolina, from March 2006 to March 2007 and Nuestro Banco, Raleigh, North Carolina, from July 2006 to March 2007. Prior to his time at AccessOne, Mr. Barry was Executive Vice President and Chief Financial Officer for Regional Acceptance Corporation, a consumer finance company unrelated to us, and prior to that he was a financial institutions partner in the Raleigh, North Carolina office of KPMG LLP. Mr. Barry earned a B.S. degree in Accounting from the University of Delaware and is a Certified Public Accountant licensed in North Carolina and Georgia.

A. Michelle Masters currently serves as Regional’s Senior Vice President, Strategic Development and Corporate Secretary. Ms. Masters joined Regional in December 1999 as Senior Financial Analyst and was promoted to Controller and Treasurer in January 2006. Ms. Masters was subsequently promoted to Senior Vice President of Finance in May 2008. Ms. Masters holds a B.A. degree in Accounting and Business Administration from Furman University and an M.B.A. degree from Clemson University.

There are no family relationships among any of our directors or executive officers.

Composition of the Board of Directors After this Offering

Our board of directors currently consists of five directors, Messrs. Dell’Aquila, Godley, Johnson, Perez and Scott, with Mr. Perez serving as chair. Upon the listing of our common stock on the New York Stock Exchange, Messrs. Campos, de Molina and Palomares, three director nominees who are independent in accordance with the criteria established by the New York Stock Exchange for independent board members, will be appointed to the board of directors. Additionally, in connection with this offering, our Chief Executive Officer, Mr. Fortin, will be appointed to our board of directors. Upon the consummation of this offering, the size of our board of directors will be increased to nine directors.

Following this offering, our existing owners will continue to control more than 50% of the voting power for the election of directors of our outstanding common stock. Accordingly, we intend to elect to rely upon exemptions available to a “controlled company” under the New York Stock Exchange corporate governance standards. These exemptions exempt us from the obligation to comply with certain New York Stock Exchange corporate governance requirements including the requirements that:

n	within one year of the date of the listing of our common stock on the New York Stock Exchange, a majority of our board of directors consists of “independent directors,” as defined under the rules of the New York Stock Exchange;
n	we have a compensation committee that is, within one year of the date of the listing of our common stock on the New York Stock Exchange, composed entirely of independent directors; and
n	we have a corporate governance and nominating committee that is, within one year of the date of the listing of our common stock on the New York Stock Exchange, composed entirely of independent directors.

Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the New York Stock Exchange corporate governance requirements. In the event that we cease to be a controlled company, we will be required to comply with these provisions within the transition periods specified in the rules of the New York Stock Exchange. These exemptions do not modify the independence requirements for our audit committee, and we intend to comply with the applicable requirements of the SEC and New York Stock Exchange

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rules with respect to our audit committee within the applicable time frame. See “– Board Committees – Audit Committee.”

Our board of directors will have discretion to determine the size of the board of directors. Our directors will be elected at each year’s annual meeting of stockholders.

Director Qualifications

Historically, the members of our board of directors have been designated in accordance with our current shareholders agreement, which we expect will be replaced upon completion of this offering with our amended and restated shareholders agreement. Our current shareholders agreement provides that the board is comprised of five directors, including (i) four designees of Regional Holdings LLC (which, pursuant to an agreement among the holders of Regional Holdings LLC, includes two designees of Palladium and two designees of Parallel) and (ii) a designee of our individual owners. Following this offering, our existing owners will initially continue to have the right to designate a majority of the members of our board of directors. See “Certain Relationships and Related Person Transactions – Shareholders Agreement.” Our existing owners have sought to ensure that our board of directors is composed of members whose particular experience, qualifications, attributes and professional and functional skills, when taken together, will allow the board to effectively satisfy its oversight responsibilities. In identifying candidates for membership on our board, our existing owners have historically taken into account (1) certain individual qualifications, such as high ethical standards, integrity, mature, careful judgment, industry knowledge or experience and an ability to work collegially with the other members of our board and (2) all other factors they consider appropriate, including alignment with our stockholders.

When determining whether our current directors and proposed new directors have the experience, qualifications, attributes and skills, taken as a whole, to enable our board to satisfy its oversight responsibilities effectively in light of our business and structure, our board focused primarily on their valuable contributions to our success in recent years and on the information discussed in the biographical information set forth under “Management – Directors, Director Nominees and Executive Officers.” In particular,

n	Mr. Perez was selected to serve as a director in light of his affiliation with Palladium and his significant experience in working with companies controlled by private equity sponsors, including several financial companies, and his experience in working with the management of various other companies owned by Palladium’s funds;
n	Mr. Campos was selected to serve as a director in light of his extensive financial background and experience in working with financial services companies, his experience with the SEC and his significant experience with public companies across a variety of industries;
n	Mr. Dell’Aquila was selected to serve as a director in light of his affiliation with Parallel, his extensive financial background and experience in working with financial services companies and his experience in working with the management of various other companies owned by Parallel;
n	Mr. Godley was selected to serve as a director due to his long-standing role with the company as founder and his significant continuing equity ownership;
n	Mr. Johnson was selected to serve as a director in light of his affiliation with Parallel, his extensive financial background and his experience in working with the management of various other companies owned by Parallel;
n	Mr. de Molina was selected to serve as a director in light of his extensive financial background and his significant experience with public and private financial services companies;
n	Mr. Palomares was selected to serve as a director in light of his extensive financial background and his significant experience in leadership roles with public financial services companies;
n	Mr. Scott was selected as a director in light of his affiliation with Palladium, his extensive financial background and his experience in working with the management of various other companies owned by Palladium funds; and
n	Mr. Fortin was selected to serve as a director in light of his role as our Chief Executive Officer and the management perspective he brings to board deliberations as well as his experience with the state and federal regulators applicable to our business.

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Board Committees

Our board of directors has established an audit committee and a compensation committee, and will establish a corporate governance and nominating committee prior to the consummation of this offering. The composition and responsibilities of each committee are described below. Members serve on these committees until their resignation or until otherwise determined by our board.

Audit Committee

Our audit committee currently consists of Messrs. Scott and Dell’Aquila. Upon the completion of this offering, our audit committee will consist of Messrs. Campos, Dell’Aquila, de Molina, Palomares and Scott, with Mr. de Molina serving as chair. Pursuant to the audit committee’s written charter, our audit committee is responsible for, among other things:

n   selecting and hiring our Independent Registered Public Accounting Firm, and approving the audit and non-audit services to be performed by our independent auditors;

n	assisting the board of directors in evaluating the qualifications, performance and independence of our independent auditors;
n	assisting the board of directors in monitoring the quality and integrity of our financial statements and our accounting and financial reporting processes;
n	assisting the board of directors in monitoring our compliance with legal and regulatory requirements;
n	assisting the board of directors in reviewing the adequacy and effectiveness of our internal control over financial reporting processes;
n	assisting the board of directors in monitoring the performance of our internal audit function;
n	discussing the scope and results of the audit with the independent registered public accounting firm;
n	reviewing with management and our independent auditors our annual and quarterly financial statements;
n	establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; and
n	preparing the audit committee report that the SEC requires in our annual proxy statement.

We expect that each of Messrs. Campos, de Molina and Palomares will be, upon his appointment, an independent director for the purpose of audit committee membership.

The SEC rules and New York Stock Exchange rules require us to have a fully independent audit committee within one year of the date of the listing of our common stock on the New York Stock Exchange.

Compensation Committee

Our compensation committee currently consists of Messrs. Johnson, Godley and Perez. Upon consummation of this offering, our compensation committee will consist of Messrs. Godley, Johnson, de Molina and Perez, with Mr. Johnson serving as chair. The compensation committee is or will be responsible for, among other things:

n	reviewing and approving, or making recommendations to the board of directors with respect to, corporate goals and objectives relevant to the compensation of our CEO, evaluating our CEO’s performance in light of those goals and objectives, and, either as a committee or together with the other independent directors (as directed by the board of directors), determining and approving our CEO’s compensation level based on such evaluation;
n	reviewing and approving the compensation of our executive officers, including annual base salary, annual incentive bonuses, specific goals, equity compensation, employment agreements, severance and change in control arrangements, and any other benefits, compensation or arrangements;
n	reviewing and recommending the compensation of our directors;
n	reviewing and discussing annually with management our “Compensation Discussion and Analysis” disclosure required by SEC rules following the consummation of this offering;
n	preparing the compensation committee report required by the SEC to be included in our annual proxy statement following the consummation of this offering; and
n	reviewing and making recommendations with respect to our equity compensation plans.

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Corporate Governance and Nominating Committee

Upon consummation of this offering, our corporate governance and nominating committee will consist of Messrs. Campos, Johnson and Scott, with Mr. Campos serving as chair. The corporate governance and nominating committee will be responsible for, among other things:

n	assisting our board of directors in identifying prospective director nominees and recommending nominees to the board of directors;
n	overseeing the evaluation of the board of directors and management;
n	reviewing developments in corporate governance practices and developing and recommending a set of corporate governance guidelines; and
n	recommending members for each committee of our board of directors.

Compensation Committee Interlocks and Insider Participation

Mr. Godley, a member of our compensation committee, is the founder of Regional, a significant stockholder and a party to our shareholders agreement. Prior to March 2007, he served as our President and Chief Executive Officer. Since March 2007, Mr. Godley has served as a consultant to Regional pursuant to a consulting agreement, which will be terminated pursuant to its terms upon the consummation of this offering and the payment by us of a $150,000 one-time termination fee to Mr. Godley pursuant to the terms of the consulting agreement. Mr. Godley is also a lender under our mezzanine debt arrangements, which we intend to repay with a portion of the proceeds of this offering. See “Certain Relationships and Related Person Transactions.” None of the other members of our compensation committee is our current or former officer or employee.

None of our executive officers serves as a member of the board of directors or compensation committee (or other committee performing equivalent functions) of any entity that has one or more executive officers serving on our board of directors or compensation committee.

Director Compensation

During 2011, the directors of Regional Management Corp. were Messrs. Perez, Dell’Aquila, Godley, Johnson and Scott. Our directors receive no separate compensation for service on the board of directors or on committees of the board of directors. Mr. Godley, however, received consulting fees pursuant to a consulting agreement as described under “Certain Relationships and Related Person Transactions.”

The following table provides summary information concerning the compensation received by our directors during fiscal 2011:

			ALL OTHER
NAME	YEAR		COMPENSATION			TOTAL
Richard T. Dell’Aquila		2011		—			—
Richard A. Godley		2011	$	150,000	(1)	$	150,000
Jared L. Johnson		2011		—			—
David Perez		2011		—			—
Erik A. Scott		2011		—			—

⁽¹⁾ Mr. Godley received consulting fees pursuant to a consulting agreement as described under “Certain Relationships and Related Person Transactions.” Pursuant to this consulting agreement, we pay Mr. Godley a monthly fee equal to $12,500, as well as pay or reimburse him for all reasonable out-of-pocket expenses directly related to the performance of his duties and responsibilities to us under the agreement. Upon the consummation of this offering, the agreement will be terminated pursuant to its terms and we will pay Mr. Godley a one-time termination fee of $150,000.

Following this offering, our employees who serve as directors will receive no separate compensation for service on the board of directors or on committees of the board of directors. We anticipate that each non-employee director will receive an annual retainer of $25,000, plus $10,000 for each committee on which each such director serves. In addition, upon joining the board of directors, each non-employee director will receive options to purchase 10,000 shares of our common stock with an exercise price equal to the fair market value on the date of grant and will, subject to the director’s continued service on our board of directors, have standard vesting provisions, which

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will be determined prior to the consummation of this offering. We expect to grant each such non-employee director additional stock options of comparable value and terms annually. In addition, each director will be reimbursed for reasonable out-of-pocket expenses incurred in connection with his service on our board of directors. In order to set the levels of director compensation for the non-executive directors, the compensation committee reviewed the director compensation packages for the same publicly-traded comparable set used for executive officers, as described below under “– Compensation Discussion and Analysis – Compensation Determination Process,” and also spoke to executive recruiting firms as to market practice.

Compensation Discussion and Analysis

The following discussion and analysis of the compensation arrangements of our named executive officers identified in the “Summary Compensation Table” below should be read together with the compensation tables and related disclosures regarding our current plans, considerations, expectations and determinations regarding future compensation programs. Our executive compensation programs following the consummation of this offering could differ materially from those summarized in this Compensation Discussion and Analysis section.

Compensation Program Objectives

The primary objectives of our executive compensation program are to attract and retain talented executives to effectively manage and lead our company and create value for our stockholders. The compensation packages for our named executive officers generally include a base salary, performance-based annual cash awards, discretionary cash bonuses, equity awards and other benefits.

The discussion below includes a review of our compensation decisions with respect to 2011. Our named executive officers for 2011 were Thomas F. Fortin, our Chief Executive Officer; Robert D. Barry, our Executive Vice President and Chief Financial Officer; C. Glynn Quattlebaum, our President and Chief Operating Officer; and A. Michelle Masters, our Senior Vice President, Strategic Development and Corporate Secretary.

Compensation Determination Process

Our current compensation program for our named executive officers has been designed based on our view that each component of executive compensation should be set at levels that are necessary, within reasonable parameters, to successfully attract and retain skilled executives and that are fair and equitable in light of market practices. We did not use a compensation consultant in 2011. In setting an individual named executive officer’s initial compensation package and the relative allocation among different types of compensation, we consider the nature of the position being filled, the scope of associated responsibilities, the individual’s prior experience and skills and the individual’s compensation expectations, as well as the compensation of existing executive officers at our company and our general impressions of prevailing conditions in the market for executive talent.

We generally monitor compensation practices in the market where we compete for executive talent to obtain an overview of market practices and to ensure that we make informed decisions on executive pay packages. Consistent with our compensation objectives of attracting and retaining top executive talent, we believe that the base salaries and performance-based annual cash award targets of our named executive officers should be set at levels which are competitive with our peer group companies of comparable size, although we do not target any specific pay percentile for our named executive officers. To obtain a sense of the market, we review the compensation awarded by the following publicly-traded companies: Aaron’s, Inc., America’s Car-Mart, Inc., Credit Acceptance Corp., Dollar Financial Corp., EZCORP, Inc., First Cash Financial Services, Inc., Nicholas Financial, Inc., Rent-A-Center, Inc. and World Acceptance Corp., as well as select private companies in the portfolios of the sponsors and companies that compete with us. In conducting this review, we place particular emphasis on the relative size of such companies in relation to our size and also consider the overall salary levels for each position held, individual bonus targets and incentive compensation paid and equity ownership levels. We believe that appropriate base salaries for our named executive officers should generally be in line with those paid by peer group companies of comparable size, that performance-based annual cash awards should reward exceptional performance with overall compensation which can exceed those of peer group companies of comparable size and that total compensation for named executive officers may approach the higher end of such peer group companies of comparable size if bonus targets are reached.

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For 2011, the compensation for our named executive officers was generally higher than publicly-traded peer companies that are smaller than us and either slightly higher, comparable to or lower than the larger publicly-traded peer group companies.

Our board of directors makes all compensation determinations for Messrs. Fortin, Quattlebaum and Barry. Historically, Ms. Masters’ compensation has been determined by Messrs. Fortin and Quattlebaum. We have an employment agreement with each of Messrs. Fortin and Quattlebaum and a letter agreement with Mr. Barry. Ms. Masters is an at-will employee and does not have an employment agreement or a letter agreement with us. We anticipate that, following this offering, the compensation committee of our board of directors will review and approve the compensation determinations for all of our executive officers.

Elements of Compensation

Base Salaries

Base salaries are intended to provide a minimum, fixed level of cash compensation sufficient to attract and retain an effective management team when considered in combination with other components of our executive compensation program. We believe that the base salary element is required to provide our named executive officers with a stable income stream that is commensurate with their responsibilities and to compensate them for services rendered during the fiscal year. Annual base salaries are established on the basis of market conditions at the time we hire an executive as well as by taking into account the particular executive’s level of qualifications and experience. Any subsequent modifications to annual base salaries are made in consideration of the appropriateness of each executive officer’s compensation, both individually and relative to the other executive officers, the individual performance of each executive officer and any significant changes in market conditions. We do not apply specific formulas to determine increases. The current annual base salaries for our named executive officers, which were at the same levels throughout 2011, are as follows: $350,000 for Mr. Fortin, $225,000 for Mr. Barry, $435,750 for Mr. Quattlebaum; and $107,300 for Ms. Masters.

Performance-Based Annual Cash Awards

Our annual incentive program is designed to drive achievement of annual corporate goals, including key financial and operating results and strategic goals that create value for stockholders. Our named executive officers are eligible for performance-based annual cash awards linked to our performance in relation to performance targets set by our board of directors. Target annual incentive levels for each named executive officer are shown in the table below. In addition, the board of directors retains the authority to award special bonuses for exceptional achievement. The awards for 2011 were based on our performance with respect to the following metrics:

n	net income from operations, which measures profitability;
n	total debt / EBITDA (earnings before interest, taxes, depreciation and amortization), which is our leverage ratio;
n	average finance receivables, which measures our loan growth;
n	net loans charged off, which measures our charge-off control; and
n	total general and administrative expense percentage, which measures our expense control.

These metrics drive the overall performance of our business from year to year and are elements of our historical financial success. Net income from operations measures the effectiveness of our management team’s execution of our strategic and operational plans. We believe that this measure accurately reflects business variables and factors that are directly within management’s control or, if not directly within management’s control, are directly influenced by decisions made by our management executives. Total debt / EBITDA measures our reliance on our credit facilities to produce cash flow. We believe that we should, over time, reduce our reliance upon borrowings and should fund proportionately more of our loan originations from operating cash flow as we grow. This measure holds management accountable for de-leveraging our balance sheet over time. Average finance receivables measures the growth of our loan portfolio. We seek to continually grow our business on a consistent and sound basis. We establish annual growth objectives for our management team for loans that we originate and service. Net loans charged off measures the control our management team exerts on loans and is ultimately a measure of the quality of underwriting policies and decisions. We guide our management team to specific aggregate net charge-off goals each year that, combined with our average finance receivables measure, balances attractive growth with effective portfolio control. Total general and administrative expense percent measure the effectiveness with which our management team utilizes our corporate resources.

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The following table illustrates our five performance metrics for 2011, their initial weightings, our performance targets and the maximum weightings:

							ACTUAL			ACTUAL
							RESULTS			WEIGHTING			MAXIMUM
	INITIAL			TARGET FOR			FOR			FOR			WEIGHTING
PERFORMANCE METRIC	WEIGHTING			2011			2011			2011			FOR 2011
Net income from operations(1)		30.0	%	$	22,188,000		$	24,433,000			33.0	%		33	%
Total debt / EBITDA (2)		30.0	%		4.20	x		4.10	x		31.0	%		33	%
Average finance receivables(3)		13.3	%	$	248,796,000		$	265,361,000			14.2	%		14.63	%
Net loans charged off(4)		13.3	%		7.67	%		6.27	%		14.6	%		14.63	%
Total general and administrative expense percentage(5)		13.3	%		38.20	%		38.86	%		—			14.63	%
Total		100.0	%								92.9	%		109.89	%

(1)	If net income from operations is (A) equal to or greater than 90% but less than 100% of the target, the executive is entitled to an award equal to 30% of the target award amount multiplied by a fraction, the numerator of which is equal to the actual net income from operations expressed as a percentage of the target minus 90% and the denominator of which is equal to 10%; and (B) equal to or greater than 100% of the target, the executive is entitled to an award equal to 30% of the target award amount multiplied by a fraction, the numerator of which is equal to the actual net income from operations expressed as a percentage of the target and the denominator of which is equal to 100%.
(2)	If total debt / EBITDA is (A) greater than 100% but less than 110% of the target, the executive is entitled to an award equal to 30% of the target award multiplied by a fraction, the numerator of which is equal to the difference between 110% and the actual total debt / EBITDA expressed as a percentage of the target and the denominator of which is equal to 10%; and (B) equal to or less than 100% of the target, the executive is entitled to an award equal to 30% of the target award amount multiplied by the sum of one and the difference between 100% and the actual total debt / EBITDA expressed as a percentage of the target.
(3)	If average monthly finance receivables is equal to or greater than 100% of the target, the executive is entitled to an award equal to 13.3% of the target award amount multiplied by a fraction, the numerator of which is equal to the actual finance receivables expressed as a percentage of the target and the denominator of which is equal to 100%.
(4)	If net loans charged off is equal to or less than 100% of the target, the executive is entitled to an award equal to 13.3% of the target award amount multiplied by the sum of one and the difference between 100% and actual net loans charged off expressed as a percentage of net loans charged off.
(5)	If the total general and administrative expense percentage is equal to or less than 100% of the target, the executive is entitled to an award equal to 13.3% of the target award amount multiplied by the sum of one and the difference between 100% and the actual total general and administrative expense percentage expressed as a percentage of the total general and administrative expense percentage.

Based on the extent to which we achieved the performance goals, as shown above, the following table sets forth the target award for each named executive officer for 2011 as a percentage of his or her annual base salary and the maximum award:

			PERCENTAGE					ACTUAL		MAXIMUM
			OF BASE					AWARD		AWARD
	ANNUAL		SALARY USED TO					(92.9%		(109.89%
	BASE		DETERMINE AWARD			TARGET		OF TARGET		OF TARGET
NAME	SALARY		ELIGIBILITY			AWARD		AWARD)		AWARD)
Thomas F. Fortin	$	350,000		59.0	%	$	206,500	$	191,829	$	226,923
Robert D. Barry	$	225,000		74.5	%	$	167,625	$	155,716	$	184,203
C. Glynn Quattlebaum	$	435,750		42.4	%	$	184,758	$	171,651	$	203,031
A. Michelle Masters	$	107,300		25.0	%	$	26,825	$	24,919	$	29,478

The percentages set forth in the table above in the column “Percentage of Base Salary Used to Determine Award Eligibility” are set forth in the employment agreements of Messrs. Fortin and Quattlebaum and the letter agreement of Mr. Barry and determined with respect to Ms. Masters by Messrs. Fortin and Quattlebaum. They are calibrated so that the total compensation opportunity for each named executive officer is commensurate with that executive’s role

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and responsibilities with us and so that Messrs. Fortin, Barry and Quattlebaum can have similar performance-based annual cash award opportunities despite differences in their respective base salaries. An executive must be employed by us on the last day of the performance year in order to be eligible to receive payment in respect of a performance-based annual cash award.

Discretionary Cash Bonuses

Our board of directors has the discretion to make periodic cash payments to executive officers in recognition of various specific projects and achievements. There is no formula or schedule for such discretionary payments. For 2011, in recognition of the growth in net income from operations and average finance receivables in excess of the targets under our annual incentive program, each of the named executive officers was paid an additional discretionary bonus equal to 12.1% of the target award under the annual incentive plan, with payments of $24,996 to Mr. Fortin, $20,290 to Mr. Barry, $22,367 to Mr. Quattlebaum and $3,247 to Ms. Masters.

Equity Awards

In 2007 and 2008, our board of directors granted options to Messrs. Fortin, Barry and Quattlebaum pursuant to our 2007 Stock Plan. See “– Outstanding Equity Awards at 2011 Fiscal Year-End.” These grants were intended to directly align the interests of such named executive officers with those of our stockholders, to give such named executive officers a strong incentive to maximize stockholder returns on a long-term basis and to aid in our recruitment and retention of key executive talent necessary to ensure our continued success. Each of Messrs. Fortin, Barry and Quattlebaum currently holds options which have a strike price of $5.4623 per share and vest 20% on the date of grant and 20% per year in each of the subsequent four years. In addition, these options vest and become exercisable in full upon the occurrence of a Change of Control (as defined in the Option Award Agreements). Our board of directors did not grant any equity awards during 2009, 2010 or 2011.

Other Compensation

We also provide various other limited perquisites and other personal benefits to our named executive officers that are intended to be part of a competitive compensation program. These benefits include 401(k) plan matching contributions for each of our named executive officers and monthly automobile allowances of $1,150 for Messrs. Fortin and Barry and $1,650 for Mr. Quattlebaum. Mr. Quattlebaum receives a higher allowance to reflect additional driving that he does for us in his capacity as President and Chief Operating Officer. The board of directors believes that these benefits are comparable to those offered by other companies that compete with us for executive talent and consistent with our overall compensation program. Perquisites are not a material part of our compensation program. We also provide our named executive officers with benefits that are generally available to all of our employees, including health insurance, disability insurance, dental insurance, vision insurance, a $10,000 life insurance benefit and vacation time. See “– Summary Compensation Table – All Other Compensation.”

Payments Upon Termination and Change in Control

Pursuant to the terms of his employment agreement or letter agreement, each of Messrs. Fortin, Barry and Quattlebaum is entitled to certain benefits upon the termination of his employment with us, the terms of which are described below under “Potential Payments Upon Termination or Change in Control.” These benefits are intended to alleviate concerns that may arise in the event of an executive’s separation from service with us and enable executives to fully focus on their duties to us while employed by us. As noted above under “– Equity Awards,” outstanding options held by Messrs. Fortin, Barry and Quattlebaum pursuant to our 2007 Stock Plan vest upon a change in control.

Actions Taken in 2012 and Anticipated Actions in Connection with the Offering

We anticipate making adjustments to our executive compensation program in connection with this offering. At the time of this offering, we intend to grant 125,000, 25,000, 25,000 and 25,000 options to Mr. Fortin, Mr. Barry, Mr. Quattlebaum and Ms. Masters, respectively. In addition, we intend to grant options to certain of our directors. The options will vest in five equal annual installments beginning on the first anniversary of the grant date, each have an exercise price equal to the initial public offering price and will be granted pursuant to the 2011 Stock Plan.

Following the consummation of this offering, we may determine that we wish to change some of our executive compensation programs in light of the availability of publicly-traded equity as a compensation tool, but we have not yet formulated any plans to make such changes.

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Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code (the “Code”) limits the ability of the company to deduct for tax purposes compensation over $1,000,000 to our principal executive officer or any one of our three highest paid executive officers, other than our principal executive officer or principal financial officer, who are employed by us on the last day of our taxable year, unless, in general, the compensation is paid pursuant to a plan that is performance related, non-discretionary and has been approved by our stockholders. No such limitation on deductibility was applicable in 2011. The compensation committee will review and consider the deductibility of executive compensation under Section 162(m) and may authorize certain payments that will be in excess of the $1,000,000 limitation. The compensation committee believes that it needs to balance the benefits of designing awards that are tax-deductible with the need to design awards that attract, retain and reward executives responsible for the success of the company.

Summary Compensation Table

The following table provides summary information concerning the compensation for services rendered to us during fiscal 2010 and 2011 by (1) our Chief Executive Officer, (2) our Chief Financial Officer and (3) each of our other executive officers as of December 31, 2011 (collectively, “the named executive officers”).

							NON-EQUITY
							INCENTIVE PLAN		ALL OTHER
			SALARY		BONUS		COMPENSATION		COMPENSATION			TOTAL
NAME AND PRINCIPAL POSITION	YEAR		($)		($)(1)		($)		($)			($)
Thomas F. Fortin,
Chief Executive Officer		2011		350,000		24,996		191,829		23,600(2	)		590,425
		2010		350,000		12,000		223,020		15,847(3	)		600,867
Robert D. Barry,
Executive Vice President and Chief
Financial Officer		2011		225,000		20,290		155,716		23,600(2	)		424,606
		2010		225,000		3,400		181,035		17,894(3	)		427,329
C. Glynn Quattlebaum,
President and Chief Operating Officer		2011		435,750		22,367		171,651		29,600(2	)		659,368
		2010		435,750		—		199,539		26,659(3	)		661,984
A. Michelle Masters,
Senior Vice President, Strategic
Development and Corporate Secretary		2011		107,300		3,247		24,919		7,542(2	)		143,008
		2010		102,300		—		27,621		4,118(3	)		134,039

⁽¹⁾ Represents discretionary bonuses awarded in 2010 and 2011. See “Compensation Discussion and Analysis – Elements of Compensation – Discretionary Cash Bonuses.”

⁽²⁾ Represents aggregate automobile allowance payments of $13,800 to each of Messrs. Fortin and Barry, and $19,800 to Mr. Quattlebaum, a 401(k) plan matching contribution of $9,800, $9,800, $9,800 and $5,479 to Mr. Fortin, Mr. Barry, Mr. Quattlebaum and Ms. Masters, respectively, and a cash payment of $2,063 to Ms. Masters in lieu of accrued and unused vacation time as provided by company policy.

⁽³⁾ Represents aggregate automobile allowance payments of $13,800 to each of Messrs. Fortin and Barry, and $19,800 to Mr. Quattlebaum, a 401(k) plan matching contribution of $2,047 (of which $178 was an excess contribution and was refunded by the 401(k) plan administrator to the executive), $4,094 (of which $2,441 was an excess contribution and was refunded by the 401(k) plan administrator to the executive), $6,895 (of which $5,508 was an excess contribution and was refunded by the 401(k) plan administrator to the executive) and $2,224 (of which $378 was an excess contribution and was refunded by the 401(k) plan administrator to the executive) to Mr. Fortin, Mr. Barry, Mr. Quattlebaum and Ms. Masters, respectively, and a cash payment of $1,894 to Ms. Masters in lieu of accrued and unused vacation time as provided by company policy.

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Grants of Plan-Based Awards in 2011

The following table reflects grants of plan-based awards made by us in 2011 to our named executive officers.

	ESTIMATED FUTURE PAYOUTS
	UNDER NON-EQUITY INCENTIVE PLAN
	AWARDS(1)
	THRESHOLD		TARGET		MAXIMUM
NAME	($)		($)		($)
Thomas F. Fortin, Chief Executive Officer		—		206,500		226,923
Robert D. Barry, Executive Vice President and Chief Financial Officer		—		167,625		184,203
C. Glynn Quattlebaum, President and Chief Operating Officer		—		184,758		203,031
A. Michelle Masters, Senior Vice President, Strategic Development and Corporate Secretary		—		26,825		29,478

⁽¹⁾ Amounts represent estimated possible payments under our annual incentive program. Actual amounts paid under the annual incentive program for 2011 are shown in the “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table.” For more information on the performance metrics applicable to these awards, see “Compensation Discussion and Analysis – Elements of Compensation – Performance-Based Annual Cash Awards.”

Outstanding Equity Awards at 2011 Fiscal Year-End

The following table provides information regarding outstanding equity awards held by our named executive officers as of December 31, 2011.

	OPTION AWARDS
	NUMBER OF			NUMBER OF
	SECURITIES			SECURITIES
	UNDERLYING			UNDERLYING
	UNEXERCISED			UNEXERCISED			OPTION
	OPTIONS			OPTIONS			EXERCISE		OPTION
	(#)			(#)			PRICE		EXPIRATION
NAME	EXERCISABLE			UNEXERCISABLE			($)		DATE
Thomas F. Fortin, Chief Executive Officer		157,250.4	(1)		39,312.6	(1)	$	5.4623		3/21/17
Robert D. Barry,		73,711	(2)		—	(2)	$	5.4623		3/21/17
Executive Vice President and Chief Financial Officer		19,603.2	(3)		4,900.8	(3)	$	5.4623		3/21/17
C. Glynn Quattlebaum, President and Chief Operating Officer		294,844	(2)		—	(2)	$	5.4623		3/21/17
A. Michelle Masters, Senior Vice President, Strategic Development and Corporate Secretary

(1)	Of these options, 20% vested on the February 26, 2008 grant date; 20% vested on March 21, 2009; 20% vested on March 21, 2010; 20% vested on March 21, 2011; and 20% are scheduled to vest on March 21, 2012, subject to Mr. Fortin remaining employed by us through such vesting date. The remaining unvested options automatically vest upon a change of control, which would be triggered, among other things, if the existing owners cease to own at least 50% of the outstanding voting power of the Company.
(2)	Of these options, 20% vested on the October 11, 2007 grant date; 20% vested on March 21, 2008; 20% vested on March 21, 2009; 20% vested on March 21, 2010; and 20% vested on March 21, 2011.
(3)	Of these options, 20% vested on the April 23, 2008 grant date; 20% vested on April 23, 2009; 20% vested on April 23, 2010; 20% vested on April 23, 2011; and 20% are scheduled to vest on April 23, 2012, subject to Mr. Barry remaining employed by us through such vesting date. The remaining unvested options automatically vest upon a change of control, which would be triggered, among other things, if the existing owners cease to own at least 50% of the outstanding voting power of the Company.

Option Exercises and Stock Vested in 2011

None of our named executive officers had options that were exercised or restricted stock that vested during 2011.

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Pension Benefits for 2011

We do not offer pension benefits to our named executive officers.

Non-Qualified Deferred Compensation for 2011

We do not offer non-qualified deferred compensation to our named executive officers.

Potential Payments Upon Termination or Change in Control

The following table illustrates the additional benefits that would have been triggered for Messrs. Fortin, Barry and Quattlebaum by a termination or change in control of our company on December 31, 2011. The actual amounts that would be payable in these circumstances can only be determined at the time of the executive’s termination or a change in control and, accordingly, may differ from the estimated amounts set forth in the tables below. Ms. Masters would not have been entitled to additional benefits triggered by such events.

Mr. Fortin

			ACCELERATED
	SALARY		VESTING			COBRA
	CONTINUATION		OF OPTIONS			PREMIUMS		TOTAL
	($)		($)			($)		($)
Termination With Cause; Voluntary Termination; Death(1)		—		—			—		—
Disability(2)		175,000		—			11,545		186,545
Termination Without Cause; Involuntary Termination(2)		175,000		—			11,545		186,545
Change in Control		—		(3	)		—		(3	)

(1)

If Mr. Fortin’s death occurs during a fiscal year, he is entitled to a pro rata portion of his performance-based annual cash award for the year.

(2)

Following termination upon Disability, termination without Cause or an Involuntary Termination (each as defined in Mr. Fortin’s Employment Agreement), Mr. Fortin would be entitled to continued salary payments for six months, provided that those payments will be reduced by the value of any disability benefits paid to Mr. Fortin (in the case of Disability) and by the amount of any income Mr. Fortin earns from any other employment. During the salary continuation period, Mr. Fortin is entitled to COBRA premium payments for coverage comparable to that under our group medical plan unless he becomes entitled to health insurance from a subsequent employer. If Mr. Fortin’s termination upon Disability, termination without Cause or Involuntary Termination occurs during a fiscal year, he is entitled to a pro rata portion of his performance-based annual cash award for the year.

⁽³⁾ Upon a Change of Control (as defined in Mr. Fortin’s Option Award Agreement), all of Mr. Fortin’s unvested options would vest. As of December 31, 2011, Mr. Fortin held 39,312.6 unvested options. Because there was no public market for our Common Stock as of December 31, 2011, the market value of each share of Common Stock as of that date is not determinable. Accordingly, we cannot calculate the value of accelerated vesting of options on that date.

Mr. Fortin is subject to non-competition and non-solicitation covenants for three years following termination of his employment with us.

Mr. Barry

			ACCELERATED
	SALARY		VESTING			COBRA
	CONTINUATION		OF OPTIONS			PREMIUMS		TOTAL
	($)		($)			($)		($)
Termination Without Cause(1)		112,500		—			—		112,500
Change in Control		—		(2	)		—		(2	)

⁽¹⁾ Following termination without cause, Mr. Barry would be entitled to continued salary payments for six months.

⁽²⁾ Upon a Change of Control (as defined in Mr. Barry’s Option Award Agreements), all of Mr. Barry’s unvested options would vest. As of December 31, 2011, Mr. Barry held an aggregate of 4,900.8 unvested options. Because we there was no public market for our Common Stock as of December 31, 2011, the market value of each share of Common Stock as of that date is not determinable. Accordingly, we cannot calculate the value of accelerated vesting of options on that date.

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Mr. Quattlebaum

			ACCELERATED
	SALARY		VESTING			COBRA
	CONTINUATION		OF OPTIONS			PREMIUMS		TOTAL
	($)		($)			($)		($)
Termination With Cause; Voluntary Termination; Death(1)		—		—			—		—
Disability(2)		435,750		—			23,697		459,447
Termination Without Cause; Involuntary Termination(2)		435,750		—			23,697		459,447
Change in Control		—		(3	)		—		(3	)

(1)

If Mr. Quattlebaum’s death occurs during a fiscal year, he is entitled to a pro rata portion of his performance-based annual cash award for the year.

(2)

Following termination upon Disability, termination without Cause or an Involuntary Termination (each as defined in Mr. Quattlebaum’s Employment Agreement), Mr. Quattlebaum would be entitled to continued salary payments for twelve months, provided that those payments will be reduced by the value of any disability benefits paid to Mr. Quattlebaum (in the case of Disability) and by the amount of any income Mr. Quattlebaum earns from any other employment. During the salary continuation period, Mr. Quattlebaum is entitled to COBRA premium payments for coverage comparable to that under our group medical plan unless he becomes entitled to health insurance from a subsequent employer. If Mr. Quattlebaum’s termination upon Disability, termination without Cause or Involuntary Termination occurs during a fiscal year, he is entitled to a pro rata portion of his performance-based annual cash award for the year.

⁽³⁾ Upon a Change of Control (as defined in Mr. Quattlebaum’s Option Award Agreement), all of Mr. Quattlebaum’s unvested options would vest. As of December 31, 2011, Mr. Quattlebaum held no unvested options. Because there was no public market for our Common Stock as of December 31, 2011, the market value of each share of Common Stock as of that date is not determinable. Accordingly, we cannot calculate the value of accelerated vesting of options on that date.

Mr. Quattlebaum is subject to a non-solicitation covenant for three years following termination of his employment with us.

Employment Agreements

The agreements described in this section are filed as exhibits to the registration statement of which this prospectus forms a part, and the following descriptions are qualified by reference thereto.

Employment Agreement with Mr. Fortin

We have entered into an employment agreement with Mr. Fortin as of February 29, 2008, as amended, pursuant to which he serves as our Chief Executive Officer. The employment term is a five-year term that began on February 29, 2008.

Mr. Fortin is currently entitled to receive an annual base salary of $350,000, which is subject to increases as may be determined by our board of directors from time to time. With respect to each calendar year during the employment term, Mr. Fortin is also eligible to earn an annual bonus award under the applicable bonus plan based upon the achievement of performance targets established by our board of directors. Pursuant to the employment agreement, Mr. Fortin also received a grant of 196,563 time-vesting stock options, subject to the terms of our 2007 Stock Plan, which will fully accelerate upon a “change in control” of the Company.

If Mr. Fortin’s employment is terminated by us without “cause” or by Mr. Fortin as a result of “involuntary termination”, Mr. Fortin will be entitled to receive (1) accrued but unpaid salary, bonus and expense reimbursements through his termination date, (2) continued payment of his annual base salary until six months after his termination date, reduced by the amount of income received by Mr. Fortin from other employment during that period, (3) payment of the COBRA premium applicable to Mr. Fortin for comparable coverage under our group medical plan for so long as he is entitled to continued payment of his base salary and is not entitled to obtain insurance from a subsequent employer and (4) an amount equal to the annual cash bonus award, if any, that Mr. Fortin would have been entitled to receive pursuant to the terms of his employment agreement in respect of such year had his employment not terminated, prorated for the portion of such year Mr. Fortin was employed during such year. Such salary and bonus would be paid as and at such times as Mr. Fortin would have received his salary and bonus had he remained our employee.

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If Mr. Fortin’s employment terminates due to his death or “disability” (as defined in his employment agreement), Mr. Fortin will be entitled to receive accrued but unpaid salary, bonus and expense reimbursement prior to his death or disability, and an amount equal to the annual cash bonus award, if any, that Mr. Fortin would have been entitled to receive pursuant to the terms of his employment agreement in respect of such year had his employment not terminated, prorated for the portion of such year Mr. Fortin was employed during such year. Such salary and expense reimbursement is payable within 45 days of his death or disability, and such bonus would be paid as and at such times as Mr. Fortin would have received his salary and bonus had he remained our employee. In addition, in the event Mr. Fortin’s employment is terminated due to disability, he is entitled to continued payment of his annual base salary until six months after his termination date, reduced by the amounts payable under any disability insurance, plan or policy maintained by us and by the amount of any salary, wages or other income paid to or for the benefit of Mr. Fortin from any other employment, and payment of the COBRA premiums, when due, for Mr. Fortin to obtain continuation medical insurance for such period or until he obtains health insurance from a subsequent employer. Such salary would be paid as and at such times as Mr. Fortin would have received his salary had he remained our employee.

If we terminate Mr. Fortin’s agreement with “cause,” or if Mr. Fortin voluntarily terminates his employment not due to “involuntary termination,” he is entitled only to accrued but unpaid salary and expense reimbursements through his termination date.

For the purpose of the employment agreement with Mr. Fortin, “cause” includes (1) the willful or grossly negligent material failure by Mr. Fortin to perform his duties thereunder; (2) Mr. Fortin’s conviction of any felony or certain other crimes; (3) certain acts of fraud, embezzlement or misappropriation; (4) certain failures to comply with any written policy of ours that materially interferes with his ability to discharge his duties, responsibilities or obligations under his employment agreement; (5) the knowing misstatement of our financial records; (6) the material breach by Mr. Fortin of any of the terms of his employment agreement; or (7) the failure to disclose material financial or other information to our board of directors.

For the purpose of the employment agreement with Mr. Fortin, “involuntary termination” means Mr. Fortin’s termination of his employment which, in his good faith judgment, is due to a material change of Mr. Fortin’s responsibilities, position, authority, duties or in the terms or status of his employment agreement or a reduction in his base salary.

Mr. Fortin is also subject to a covenant not to disclose our confidential information during his employment term and at all times thereafter and covenants not to compete with us and not to solicit our employees or customers during his employment term and for three years following termination of his employment for any reason.

Employment Agreement with Mr. Quattlebaum

We have entered into an employment agreement with Mr. Quattlebaum as of March 21, 2007, as amended, pursuant to which Mr. Quattlebaum serves as our President and Chief Operating Officer. The employment term is a five-year term that began on March 21, 2007.

Mr. Quattlebaum is currently entitled to receive an annual base salary of $435,750, which is subject to increases as may be determined by our board of directors from time to time. With respect to each calendar year during the employment term, Mr. Quattlebaum is also eligible to earn an annual bonus award under the applicable bonus plan based upon the achievement of performance targets established by our board of directors. Pursuant to the employment agreement, Mr. Quattlebaum also received a grant of 294,844 time-vesting stock options to Mr. Quattlebaum, subject to the terms of our 2007 Stock Plan, which will fully accelerate upon a “change in control” of the Company.

If Mr. Quattlebaum’s employment is terminated by us without “cause” or by Mr. Quattlebaum as a result of “involuntary termination” (as such terms are defined in the employment agreement), Mr. Quattlebaum will be entitled to receive (1) accrued but unpaid salary, bonus and expense reimbursement through his termination date, (2) continued payment of his annual base salary until twelve months after his termination date, (3) payment of the COBRA premium applicable to Mr. Quattlebaum for comparable coverage under our group medical plan for so long as he is entitled to continued payment of his base salary and is not entitled to obtain insurance from a subsequent employer and (4) an amount equal to the annual cash bonus award, if any, that Mr. Quattlebaum would have been

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entitled to receive pursuant to the terms of his employment agreement in respect of such year had his employment not terminated, prorated for the portion of such year Mr. Quattlebaum was employed during such year. Such salary and bonus would be paid as and at such times as Mr. Quattlebaum would have received his salary and bonus had he remained our employee.

If we terminate Mr. Quattlebaum’s agreement with “cause,” or if Mr. Quattlebaum voluntarily terminates his employment for a reason other than due to “involuntary termination,” he is entitled only to accrued but unpaid salary and expense reimbursements through his termination date.

If Mr. Quattlebaum’s employment terminates due to his death or “disability” (as defined in his employment agreement), Mr. Quattlebaum will be entitled to receive accrued but unpaid salary, bonus and expense reimbursement prior to his death or disability, and an amount equal to the annual cash bonus award, if any, that Mr. Quattlebaum would have been entitled to receive pursuant to the terms of his employment agreement in respect of such year had his employment not terminated, prorated for the portion of such year Mr. Quattlebaum was employed during such year. Such salary and expense reimbursement is payable within 45 days of his death or disability, and such bonus would be paid as and at such times as Mr. Quattlebaum would have received his bonus had he remained our employee. In addition, in the event Mr. Quattlebaum’s employment is terminated due to disability, he is entitled to continued payment of his annual base salary until twelve months after his termination date, reduced by the amounts payable under any disability insurance, plan or policy maintained by us, and payment of the COBRA premiums, when due, for Mr. Quattlebaum to obtain continuation medical insurance for such period or until he obtains health insurance from a subsequent employer. Such salary would be paid as and at such times as Mr. Quattlebaum would have received his salary had he remained our employee.

For the purpose of the employment agreement with Mr. Quattlebaum, “cause” includes (1) the willful or grossly negligent material failure by Mr. Quattlebaum to perform his duties thereunder; (2) Mr. Quattlebaum’s conviction of any felony or certain other crimes; (3) certain acts of fraud, embezzlement or misappropriation; (4) certain failures to comply with any written policy of ours that materially interferes with his ability to discharge his duties, responsibilities or obligations under his employment agreement; (5) the knowing misstatement of our financial records; (6) the material breach by Mr. Quattlebaum of any of the terms of his employment agreement; or (7) the failure to disclose material financial or other information to our board of directors.

For the purpose of the employment agreement with Mr. Quattlebaum, “involuntary termination” means Mr. Quattlebaum’s termination of his employment which, in his good faith judgment, is due to a material change of Mr. Quattlebaum’s responsibilities, position, authority, duties or in the terms or status of his employment agreement, a reduction in his base salary or a forced relocation outside the Greenville, SC metropolitan area.

Mr. Quattlebaum is also subject to a covenant not to disclose our confidential information during his employment term and at all times thereafter and covenants not to solicit our employees or customers during his employment term and for three years following termination of his employment for any reason.

Employment Letter Agreement with Mr. Barry

We have entered into a letter agreement with Mr. Barry as of July 1, 2008, as amended, pursuant to which Mr. Barry serves as our Executive Vice President and Chief Financial Officer.

Mr. Barry is currently entitled to receive an annual base salary of $225,000, subject to annual review. With respect to each calendar year during the employment term, the letter agreement provides that Mr. Barry is also eligible to earn an annual bonus award under the applicable bonus plan based upon the achievement of our performance targets for Mr. Barry established by our board of directors. The employment agreement also provides for the grant of stock options to Mr. Barry under our 2007 Stock Plan to increase his option holdings to 1.00% of Regional’s outstanding and reserved shares, which options were granted in 2008.

If we terminate Mr. Barry’s employment without cause, he is entitled to receive six months of his prevailing base salary as severance.

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2007 Management Incentive Plan

General

We adopted our 2007 Stock Plan effective as of March 21, 2007. The 2007 Stock Plan permits the grant of non-qualified stock options and incentive stock options to our and our subsidiaries’ key employees, executive officers, non-employee directors, consultants or other independent advisors. As of December 31, 2011, 447,790 shares of our common stock were available for future awards of options under the 2007 Stock Plan. No awards may be made under the 2007 Stock Plan after the tenth anniversary of the effective date of the plan. We will not grant any further awards under the 2007 Stock Plan following the completion of this offering.

Administration

The 2007 Stock Plan is administered by the board of directors or such other committee of our board of directors to which it has delegated power (the “Committee”), which, prior to our initial registration, unless the board of directors determines otherwise, consists of the entire board of directors. The Committee has the full authority and discretion to administer the 2007 Stock Plan and to take any action that is necessary or advisable in connection with the administration of the 2007 Stock Plan, including, without limitation, the authority and discretion to interpret and construe any provision of the 2007 Stock Plan, or any agreement, notification, or document entered into or delivered pursuant to the 2007 Stock Plan, and to determine whether a participant’s termination of employment resulted from voluntary resignation for good reason, discharge for cause, or any other reason. The interpretation and construction by the Committee of any such provision and any determination by the Committee pursuant to any provision of the 2007 Stock Plan, or any agreement, notification, or document entered into or delivered pursuant to the 2007 Stock Plan, will be final and conclusive.

Terms of Stock Options

Options granted under the 2007 Stock Plan are vested and exercisable at such times and upon such terms and conditions as may be determined by the Committee, but in no event will an option be exercisable more than ten years after it is granted. Under the 2007 Stock Plan, the exercise price per share for any option awarded is determined by the Committee, but may not be less than 100% of the fair market value of a share on the day the option is granted.

All stock options granted by our board of directors to date under the 2007 Stock Plan have been granted at or above the fair market value of our common stock at the grant date based upon the most recent valuation of our common stock. As a privately-owned company, there has been no market for our common stock. Accordingly, we have no program, plan or practice pertaining to the timing of stock option grants to executive officers, coinciding with the release of material non-public information.

An option may be exercised by paying the exercise price in cash or its equivalent, shares, to the extent authorized by the Committee, by permitting us to withhold a number of shares otherwise issuable having an aggregate value equal to the aggregate exercise price in respect of the option, or any combination of the foregoing.

As of December 31, 2011, options to purchase 589,622 shares of our common stock were outstanding under the 2007 Stock Plan.

Any shares of our common stock issued upon the exercise of such options are subject to a repurchase right, pursuant to which we may repurchase shares acquired upon the exercise of an option, in specified circumstances including any termination of employment of a participant. This repurchase right will lapse upon the closing of a public offering of our shares.

Each of Messrs. Fortin, Barry and Quattlebaum currently holds options which have a strike price of $5.4623 per share and vest 20% on the date of grant and 20% per year in each of the subsequent four years. In addition, these options vest and become exercisable in full upon the occurrence of a Change of Control (as defined in the Option Award Agreements). Our board of directors did not grant any equity awards during 2009, 2010 or 2011.

Adjustments Upon Certain Events

The Committee will make or provide for adjustment in the number of shares subject to the 2007 Stock Plan, the number of shares subject to an option granted under the 2007 Stock Plan, the option price applicable to any such options, in each case as the Committee in its sole discretion may determine is equitably required to maintain the

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intent of the 2007 Stock Plan or to prevent dilution or enlargement of the rights of participants that would otherwise result from (1) any stock dividend, stock split, combination of shares, recapitalization, or other change in the capital structure of the Company, (2) any merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities, or (3) any other corporate transaction or event having an effect similar to any of the foregoing. In addition, in the event of any such transaction or event, the Committee, in its sole discretion, may provide in substitution for any or all outstanding options under the 2007 Stock Plan, such alternative consideration as it, in good faith, may determine to be equitable in the circumstances and may require in connection with such substitution the surrender of all stock options so replaced.

Amendment and Termination

The Committee may amend or terminate the 2007 Stock Plan at any time, provided that the 2007 Stock Plan may not be amended without further approval of our stockholders if such amendment would result in the plan no longer satisfying any applicable listing requirements. In addition, neither the Committee nor the board may reduce the exercise price of an option, or replace an underwater option with a new option having a lower exercise price, without approval of each class of stockholders of the corporation, in each case other than amendments made pursuant to the Committee’s authority to adjust awards upon certain events (described under “Adjustments Upon Certain Events” above).

2011 Stock Incentive Plan

Our board of directors has adopted, and our stockholders have approved, the 2011 Stock Plan. The following description of the 2011 Stock Plan is not complete and is qualified by reference to the full text of the 2011 Stock Plan, which is filed as an exhibit to the registration statement of which this prospectus forms a part.

Purpose

The purpose of the 2011 Stock Plan is to aid us and our affiliates in recruiting and retaining key employees, directors and other service providers of outstanding ability and to motivate those employees, directors, consultants and other service providers to exert their best efforts on our behalf and on behalf of our affiliates by providing incentives through the granting of stock options, stock appreciation rights (“SARs”), other stock-based awards, and other performance-based awards.

Shares Subject to the Plan

The 2011 Stock Plan provides that the total number of shares of common stock that may be issued under the 2011 Stock Plan is 950,000, and the maximum number of shares for which incentive stock options may be granted to any participant in one fiscal year is 475,000. Shares of our common stock covered by awards that terminate or lapse without the payment of consideration may be granted again under the 2011 Stock Plan. Awards may be made under the 2011 Stock Plan in substitution for outstanding awards previously granted by a company that is acquired by us, but the shares subject to such substituted awards will not be counted against the aggregate number of shares otherwise available for awards under the 2011 Stock Plan.

Administration

The 2011 Stock Plan will be administered by the compensation committee of our board of directors or such other committee of our board of directors to which it has delegated power (the “Committee”). The Committee is authorized to interpret the 2011 Stock Plan, to establish, amend and rescind any rules and regulations relating to the 2011 Stock Plan and to make any other determinations that it deems necessary or desirable for the administration of the 2011 Stock Plan and may delegate such authority. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the 2011 Stock Plan in the manner and to the extent the Committee deems necessary or desirable. The Committee will have the full power and authority to establish the terms and conditions of any award consistent with the provisions of the 2011 Stock Plan and to waive any such terms and conditions at any time (including, without limitation, accelerating or waiving any vesting conditions). Determinations made by the Committee need not be uniform and may be made selectively among participants in the 2011 Stock Plan.

Limitations

No award may be granted under the 2011 Stock Plan after the tenth anniversary of the effective date (as defined therein), but awards theretofore granted may extend beyond that date.

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Options

The Committee may grant non-qualified stock options and incentive stock options, which will be subject to the terms and conditions as set forth in the 2011 Stock Plan, the related award agreement and any other terms, not inconsistent therewith, as determined by the Committee; provided that all stock options granted under the 2011 Stock Plan are required to have a per share exercise price that is not less than 100% of the fair market value of our common stock underlying such stock options on the date an option is granted (other than in the case of options granted in substitution of previously granted awards), and all stock options that are intended to qualify as incentive stock options will be subject to the terms and conditions that comply with the rules as may be prescribed by Section 422 of the Code. The maximum term for stock options granted under the 2011 Stock Plan will be 10 years from the initial date of grant. The purchase price for the shares as to which a stock option is exercised will be paid to us, to the extent permitted by law (1) in cash or its equivalent at the time the stock option is exercised, (2) in shares having a fair market value equal to the aggregate exercise price for the shares being purchased and satisfying any requirements that may be imposed by the Committee, so long as the shares will have been held for such period established by the Committee in order to avoid adverse accounting treatment, (3) partly in cash and partly in shares, (4) if there is a public market for the shares at such time, through the delivery of irrevocable instructions to a broker to sell the shares being obtained upon the exercise of the stock option and to deliver to us an amount out of the proceeds of such sale equal to the aggregate exercise price for the shares being purchased, or (5) allow for payment through a “net settlement” feature. The “repricing” of stock options is prohibited without prior approval of our stockholders.

Stock Appreciation Rights

The Committee may grant stock appreciation rights, or SARs, independent of or in connection with a stock option. The exercise price per share of a SAR will be an amount determined by the Committee but in no event will such amount be less than 100% of the fair market value of a share on the date the SAR is granted (other than in the case of SARs granted in substitution of previously granted awards). Generally, each SAR will entitle the participant upon exercise to an amount equal to the product of (1) the excess of (A) the fair market value on the exercise date of one share of common stock, over (B) the exercise price per share, times (2) the numbers of shares of common stock covered by the SAR. As discussed above with respect to options, the “repricing” of SARs is prohibited under the 2011 Stock Plan without prior approval of our stockholders.

Other Stock-Based Awards (including Performance-Based Awards)

In addition to stock options and SARs, the Committee may grant or sell awards of shares, restricted shares, restricted stock units, and awards that are valued in whole or in part by reference to, or otherwise based on the fair market value of shares, including performance-based awards. The Committee, in its sole discretion, may grant awards which are denominated in shares or cash (such awards, “Performance-Based Awards”), which awards may, but are not required to, be granted in a manner which is intended to be deductible by us under Section 162(m) of the Code. Such Performance-Based Awards will be in such form, and dependent on such conditions, as the Committee will determine, including, without limitation, the right to receive, or vest with respect to, one or more shares or the cash value of the award upon the completion of a specified period of service, the occurrence of an event and/or the attainment of performance objectives. The maximum amount of a Performance-Based Award that may be earned during each fiscal year during a performance period by any participant will be: (x) with respect to Performance-Based Awards that are denominated in shares, 475,000 shares and (y) with respect to Performance-Based Awards that are denominated in cash, $2,500,000. The amount of the Performance-Based Award actually paid to a participant may be less than the amount determined by the applicable performance goal formula, at the discretion of the Committee.

Effect of Certain Events on 2011 Stock Plan and Awards

In the event of any stock dividend or split, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other corporate exchange, any equity restructuring (as defined under FASB Accounting Standard Codification 718), or any distribution to stockholders of common stock other than regular cash dividends or any similar event, the Committee in its sole discretion and without liability to any person will make such substitution or adjustment, if any, as it deems to be reasonably necessary to address, on an equitable basis, the effect of such event, as to (i) the number or kind of common stock or other securities that may be issued as set forth in the 2011 Stock Plan or pursuant to outstanding awards, (ii) the maximum number of shares for which options or SARs may be granted during a fiscal year to any participant, (iii) the maximum amount of a Performance-Based Award that may be granted during a fiscal year to any participant, (iv) the exercise price of any award and/or (v) any other affected terms of such awards. Except as otherwise provided in an award agreement or otherwise

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determined by the Committee, in the event of a Change in Control (as defined in the 2011 Stock Plan), with respect to any outstanding awards then held by participants which are unexercisable or otherwise unvested or subject to lapse restrictions, the Committee may, but will not be obligated to, in a manner intended to comply with the requirements of Section 409A of the Code, (1) accelerate, vest, or cause the restrictions to lapse with all or any portion of an award, (2) cancel awards for fair value (as determined in the sole discretion of the Committee), which, in the case of stock options and SARs, may equal the excess, if any, of the value of the consideration to be paid in the Change in Control transaction to holders of the same number of shares subject to such stock options or SARs over the aggregate exercise price of such stock options or SARs, (3) provide for the issuance of substitute awards or (4) provide that the stock options will be exercisable for all shares subject thereto for a period of at least 30 days prior to the Change in Control and that upon the occurrence of the Change in Control, the stock options will terminate and be of no further force or effect. The Committee may cancel stock options and SARs for no consideration if the fair market value of the shares subject to such options or SARs is less than or equal to the aggregate exercise price of such stock options or SARs.

Forfeiture and Clawback

The Committee may in its sole discretion specify in an award or a policy that is incorporated into an award by reference that the participant’s rights, payments, and benefits with respect to such award will be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions contained in such award. Such events may include, but are not limited to, termination of employment for cause, termination of the participant’s provision of services to us, breach of noncompetition, confidentiality, or other restrictive covenants that may apply to the participant, or adverse restatement of our previously released financial statements as a consequence of errors, omissions, fraud, or misconduct.

Nontransferability of Awards

Unless otherwise determined by the Committee, an award will not be transferable or assignable by a participant otherwise than by will or by the laws of descent and distribution.

Amendment and Termination

The Committee may generally amend, alter or discontinue the 2011 Stock Plan, but no amendment, alteration or discontinuation will be made (1) without the approval of our stockholders to the extent such approval is (a) required by or (b) desirable to satisfy the requirements of any applicable law, including the listing standards of the securities exchange, which is, at the applicable time, the principal market for the shares of our common stock, or (2) without the consent of a participant, would materially adversely impair any of the rights or obligations under any award theretofore granted to the participant under the 2011 Stock Plan; provided, however, that the Committee may amend the 2011 Stock Plan in such manner as it deems necessary to permit the granting of awards meeting the requirements of the Code or other applicable laws, including, without limitation, to avoid adverse tax consequences or accounting consequences to us or any participant.

Section 409A of the Code

The 2011 Stock Plan and awards issued thereunder will be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations, and no award will be granted, deferred, accelerated, paid out or modified under the 2011 Stock Plan in a manner that would result in the imposition of an additional tax under Code Section 409A upon a participant.

United States Federal Income Tax Consequences

The following is a general summary of the material United States federal income tax consequences of the grant, vesting and exercise of awards under the 2007 Stock Plan and the 2011 Stock Plan and the disposition of shares acquired pursuant to the exercise of such awards and is intended to reflect the current provisions of the Code and the regulations thereunder. This summary is not intended to be a complete statement of applicable law, nor does it address foreign, state, local and payroll tax considerations. Moreover, the United States federal income tax consequences to any particular participant may differ from those described herein by reason of, among other things, the particular circumstances of such participant.

Incentive Stock Options

Options granted as “incentive stock options” (ISOs) under Section 422 of the Code may qualify for special tax treatment. The Code requires that, for treatment of an option as an ISO, common stock acquired through the exercise of the option cannot be disposed of before the later of (i) two years from the date of grant of the option or

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(ii) one year from the date of exercise. Holders of ISOs will generally incur no federal income tax liability at the time of grant or upon exercise of those options. However, the option “spread value” at the time of option exercise will be an “item of tax preference,” which may give rise to “alternative minimum tax” liability for the taxable year in which the exercise occurs. If the holder does not dispose of the shares before two years following the date of grant and one year following the date of exercise, the difference between the exercise price and the amount realized upon disposition of the shares will constitute long-term capital gain or loss, as the case may be. Assuming both holding periods are satisfied, we will not be allowed a deduction for federal income tax purposes in connection with the grant or exercise of the ISO. If, within two years following the date of grant or within one year following the date of exercise, the holder of shares acquired through the exercise of an ISO disposes of those shares, the participant will generally realize taxable compensation at the time of such disposition equal to the difference between the exercise price and the lesser of the fair market value of the share on the date of exercise or the amount realized on the subsequent disposition of the shares, and that amount will generally be deductible by us for federal income tax purposes, subject to the possible limitations on deductibility under Sections 280G and 162(m) of the Code for compensation paid to executives designated in those Sections. Finally, if an otherwise qualified ISO becomes first exercisable in any one year for shares having an aggregate value in excess of $100,000 (based on the grant date value), the portion of the ISO in respect of those excess shares will be treated as a non-qualified stock option for federal income tax purposes.

Non-Qualified Stock Options

No income will be realized by a participant upon grant of a non-qualified stock option. Upon the exercise of a non-qualified stock option, the participant will recognize ordinary compensation income in an amount equal to the excess, if any, of the fair market value of the underlying exercised shares over the option exercise price paid at the time of exercise. We will be able to deduct this same amount for United States federal income tax purposes, but such deduction may be limited under Sections 280G and 162(m) of the Code for compensation paid to certain executives designated in those Sections.

SARs

No income will be realized by a participant upon grant of an SAR. Upon the exercise of an SAR, the participant will recognize ordinary compensation income in an amount equal to the fair market value of the shares of stock or cash payment received in respect of the SAR. We will be able to deduct this same amount for United States federal income tax purposes, but such deduction may be limited under Sections 280G and 162(m) of the Code for compensation paid to certain executives designated in those Sections.

Restricted Stock

A participant will not be subject to tax upon the grant of an award of restricted stock unless the participant otherwise elects to be taxed at the time of grant pursuant to Section 83(b) of the Code. On the date an award of restricted stock becomes transferable or is no longer subject to a substantial risk of forfeiture, the participant will have taxable compensation equal to the difference between the fair market value of the shares on that date over the amount the participant paid for such shares, if any, unless the participant made an election under Section 83(b) of the Code to be taxed at the time of grant. If the participant makes an election under Section 83(b), the participant will have taxable compensation at the time of grant equal to the difference between the fair market value of the shares on the date of grant over the amount the participant paid for such shares, if any. (Special rules apply to the receipt and disposition of restricted stock received by officers and directors who are subject to Section 16(b) of the Exchange Act). We will be able to deduct, at the same time as it is recognized by the participant, the amount of taxable compensation to the participant for United States federal income tax purposes, but such deduction may be limited under Sections 280G and 162(m) of the Code for compensation paid to certain executives designated in those Sections.

Restricted Stock Units

A participant will not be subject to tax upon the grant of a restricted stock unit award. Rather, upon the delivery of shares or cash pursuant to a restricted stock unit award, the participant will have taxable compensation equal to the fair market value of the number of shares (or the amount of cash) the participant actually receives with respect to the award. We will be able to deduct the amount of taxable compensation to the participant for United States federal income tax purposes, but the deduction may be limited under Sections 280G and 162(m) of the Code for compensation paid to certain executives designated in those Sections.

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Stock Bonus Awards

A participant will have taxable compensation equal to the difference between the fair market value of the shares on the date the common stock subject to the award is transferred to the participant over the amount the participant paid for such shares, if any. We will be able to deduct, at the same time as it is recognized by the participant, the amount of taxable compensation to the participant for United States federal income tax purposes, but such deduction may be limited under Sections 280G and 162(m) of the Code for compensation paid to certain executives designated in those Sections.

Section 162(m)

In general, Section 162(m) of the Code denies a publicly held corporation a deduction for United States federal income tax purposes for compensation in excess of $1 million per year per person to its principal executive officer, and the three other officers (other than the principal executive officer and principal financial officer) whose compensation is disclosed in its prospectus or proxy statement as a result of their total compensation, subject to certain exceptions. Subject to obtaining approval of the 2011 Stock Plan by our stockholders prior to the payment of any awards thereunder, the 2011 Stock Plan is intended to satisfy an exception with respect to grants of options to covered employees. In addition, the 2011 Stock Plan is designed to permit certain awards of restricted stock, restricted stock units, cash bonus awards and other awards to be awarded as performance compensation awards intended to qualify under the “performance-based compensation” exception to Section 162(m) of the Code. Finally, under a special Section 162(m) exception, any compensation paid pursuant to a compensation plan in existence before the effective date of this offering will not be subject to the $1,000,000 limitation until the earliest of: (1) the expiration of the compensation plan, (2) a material modification of the compensation plan (as determined under Section 162(m)), (3) the issuance of all the employer stock and other compensation allocated under the compensation plan, or (4) the first meeting of stockholders at which directors are elected after the close of the third calendar year following the year in which the offering occurs.

Annual Incentive Plan

Our board of directors has adopted, and our stockholders have approved, the Regional Management Corp. Annual Incentive Plan, (“the Annual Incentive Plan”). The following description of the Annual Incentive Plan is not complete and is qualified by reference to the full text of the Annual Incentive Plan, which will be filed as an exhibit to the registration statement of which this prospectus forms a part.

Purpose

The Annual Incentive Plan is a bonus plan designed to attract, retain, motivate and reward participants by providing them with the opportunity to earn competitive compensation directly linked to our performance.

Administration

The Annual Incentive Plan will be administered by the compensation committee of our board of directors or such other committee of our board of directors to which it has delegated power (the “Committee”).

Eligibility; Awards

Awards may be granted to our officers and key employees in the sole discretion of the Committee. The Annual Incentive Plan provides for the payment of incentive bonuses in the form of cash, or, at the sole discretion of the Committee, in awards under the 2011 Stock Plan. For performance-based bonuses intended to comply with the performance-based compensation exemption under Section 162(m) of the Code, by no later than the end of the first quarter of a given performance period (or such other date as may be required or permitted by Section 162(m) of the Code to the extent applicable to us and the Annual Incentive Plan), the Committee will establish such target incentive bonuses for each individual participant in the Annual Incentive Plan. However, the Committee may in its sole discretion grant such bonuses, if any, to such participants as the Committee may choose, in respect of any given performance period, that is not intended to comply with the performance-based exemption under Section 162(m) of the Code. No participant may receive a bonus under the Annual Incentive Plan, with respect of any fiscal year, in excess of $2,500,000.

Performance Goals

The Committee will establish the performance periods over which performance objectives will be measured. A performance period may be for a fiscal year or a shorter period, as determined by the Committee. No later than the

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last day of the first quarter of a given performance period begins (or such other date as may be required or permitted by Section 162(m) of the Code to the extent applicable to us and the Annual Incentive Plan), the Committee will establish (1) the performance objective or objectives that must be satisfied for a participant to receive a bonus for such performance period, and (2) the target incentive bonus for each participant. Performance objective(s) will be based upon one or more of the following criteria, as determined by the Committee: (i) consolidated income before or after taxes (including income before interest, taxes, depreciation and amortization); (ii) EBITDA; (iii) adjusted EBITDA, (iv) operating income; (v) net income; (vi) adjusted cash net income; (vii) adjusted cash net income per share; (viii) net income per share; (ix) book value per share; (x) return on members’ or stockholders’ equity; (xi) expense management (including, without limitation, total general and administrative expense percentages); (xii) return on investment; (xiii) improvements in capital structure; (xiv) profitability of an identifiable business unit or product; (xv) maintenance or improvement of profit margins; (xvi) stock price; (xvii) market share; (xviii) revenue or sales (including, without limitation, net loans charged off and average finance receivables); (xix) costs (including, without limitation, total general and administrative expense percentages); (xx) cash flow; (xxi) working capital; (xxii) multiple of invested capital; (xxiii) total debt (including, without limitation, total debt as a multiple of EBITDA) and (xxiv) total return. The foregoing criteria may relate to us, one or more of our subsidiaries or one or more of our divisions or units, or any combination of the foregoing, and may be applied on an absolute basis and/or be relative to one or more peer group companies or indices, or any combination thereof, all as the Committee will determine. The performance measures and objectives established by the Committee may be different for different fiscal years and different objectives may be applicable to different officers and key employees.

As soon as practicable after the applicable performance period ends, the Committee will (A) determine (i) whether and to what extent any of the performance objective(s) established for such performance period have been satisfied and certify to such determination, and (ii) for each participant employed as of the date on which bonuses under the plan are payable, unless otherwise determined by the Committee (to the extent permitted under Section 162(m) of the Code, to the extent applicable to us and the Annual Incentive Plan), the actual bonus to which such participant will be entitled, taking into consideration the extent to which the performance objective(s) have been met and such other factors as the Committee may deem appropriate and (B) cause such bonus to be paid to such participant. The Committee has absolute discretion to reduce or eliminate the amount otherwise payable to any participant under the Annual Incentive Plan and to establish rules or procedures that have the effect of limiting the amount payable to each participant to an amount that is less than the maximum amount otherwise authorized as that participant’s target incentive bonus.

To the extent permitted under Section 162(m) of the Code, to the extent applicable to us and the Annual Incentive Plan, unless otherwise determined by the Committee, if a participant is hired or rehired by us after the beginning of a performance period (or such corresponding period if the performance period is not a fiscal year) for which a bonus is payable, such participant may, if determined by the Committee, receive an annual bonus equal to the bonus otherwise payable to such participant based upon our actual performance for the applicable performance period or, if determined by the Committee, based upon achieving targeted performance objectives pro-rated for the days of employment during such period or such other amount as the Committee may deem appropriate.

Forfeiture and Clawback

The Committee may in its sole discretion specify in an award or a policy that is incorporated into an award by reference that the participant’s rights, payments, and benefits with respect to such award will be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions contained in such award. Such events may include, but are not limited to, termination of employment for cause, termination of the participant’s provision of services to us, breach of noncompetition, confidentiality, or other restrictive covenants that may apply to the participant, or restatement of our financial statements to reflect adverse results from those previously released financial statements as a consequence of errors, omissions, fraud, or misconduct.

Change in Control

If there is a Change in Control (as defined in the 2011 Stock Plan, as described above), the Committee, as constituted immediately prior to the change in control, will determine in its sole discretion whether and to what extent the performance criteria have been met or will be deemed to have been met for the year in which the change in control occurs and for any completed performance period for which a determination under the plan has not been made.

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Termination of Employment

If a participant dies or becomes disabled prior to date on which bonuses under the Annual Incentive Plan for the applicable performance period are payable, the participant may receive an annual bonus equal to the bonus otherwise payable to the participant based on actual company performance for the applicable performance period or, if determined by the Committee, based upon achieving targeted performance objectives, pro-rated for the days of employment during the performance period. Unless otherwise determined by the Committee, if a participant’s employment terminates for any other reason, such participant will not receive a bonus.

Payment of Awards

Payment of any bonus amount is made to participants as soon as is practicable after the Committee certifies that one or more of the applicable performance objectives has been attained or after the Committee determines the amount of such bonus. All payments thus made will be in accordance with or exempt from the requirements of Section 409A of the Code.

Amendment and Termination of Plan

Our board of directors or the Committee may at any time amend, suspend, discontinue or terminate the Annual Incentive Plan, subject to stockholder approval if such approval is necessary to continue to qualify the amounts payable under the Annual Incentive Plan under Section 162(m) of the Code if such amounts are intended to be so qualified; provided, that no such amendment, suspension, discontinuance or termination will adversely affect the rights of any participant in respect of any fiscal year that has already begun. Unless earlier terminated, the Annual Incentive Plan will expire on the day immediately prior to our first shareholder meeting at which directors are to be elected that occurs after the close of the third calendar year following the calendar year in which our initial public offering occurs.

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CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

Shareholders Agreement

In March 2007, we entered into a shareholders agreement with the sponsors, Regional Holdings LLC (a holding company owned by the sponsors) and the individual owners. Among other things, the existing shareholders agreement provides that the board is comprised of five directors, including (a) four designees of Regional Holdings LLC (which, pursuant to an agreement among the holders of Regional Holdings LLC, includes two designees of Palladium and two designees of Parallel) and (b) a designee of our individual owners. The existing shareholders agreement also provides: (1) the existing owners with “tag-along” rights in connection with certain transfers of shares by the other existing owners, (2) Regional Holdings LLC with “drag-along” rights, to require other existing owners to sell shares to a third party in connection with certain transfers of shares by Regional Holdings LLC, (3) the other existing owners with a right of first offer in connection with certain transfers of shares by Regional Holdings LLC, (4) Regional Holdings LLC with a right of first refusal in connection with certain transfers of shares by the other existing owners, (5) Regional Holdings LLC with demand registration rights, and provides incidental registration rights to the other existing owners, (6) the existing owners with “pre-emptive” rights with respect to new issuances of shares of our common stock, (7) the individual owners with a right to “put” all or a portion of their shares to us at their fair market value beginning in March 2012 if a qualified public offering has not occurred by that date and (8) certain limitations on transfer of shares by the existing owners until the earlier of the expiration of the lock-up agreement following an initial public offering and March 2012.

Our shareholders agreement will be amended and restated in its entirety prior to the consummation of this offering to eliminate or replace most of the provisions summarized above. The amended and restated shareholders agreement will include the following voting agreement:

n	if the parties to the amended and restated shareholders agreement hold more than 50% of our outstanding stock entitled to vote for the election of directors, then such parties will collectively have the right to designate the smallest whole number of directors that constitutes a majority of the board;
n	if the parties to the amended and restated shareholders agreement hold 50% or less, but more than 25%, of our outstanding stock entitled to vote for the election of directors, then such parties will collectively have the right to designate the number of directors that is one fewer than the smallest whole number of directors that constitutes a majority of the board; and
n	if the parties to the amended and restated shareholders agreement hold 25% or less of our outstanding stock entitled to vote for the election of directors, such parties will have no right to designate directors except that each of (1) Palladium, (2) Parallel and (3) a representative of the individual owners will have the right to designate one director if such stockholder or group of stockholders holds at least 5% of the outstanding stock entitled to vote for the election of directors.

The director designation rights described in the first and second bullets above will be allocated among the existing owners as follows:

n

for so long as the individual owners in the aggregate continue to hold at least 5% of the outstanding stock entitled to vote for the election of directors, one director will be designated by a representative of the individual owners; and

n

all of the remaining directors to be designated by the parties to the shareholders agreement will be divided between Parallel and Palladium in the ratio that most nearly matches the ratio of their ownership of shares of common stock; provided that, unless and until the ratio of the number shares of common stock held by Parallel to the number of shares of common stock held by Palladium is less than such ratio immediately following this offering, the number of directors to be designated by Parallel will not be fewer than one fewer than the number of directors to be designated by Palladium.

The amended and restated shareholders agreement will also provide the sponsors with demand registration rights, and provide incidental registration rights to the other existing owners. The amended and restated shareholders agreement will also provide that, in certain circumstances, parties to that agreement that have designated a director who is then serving on our board of directors may not make a significant investment in one of our competitors unless such party has first presented the investment opportunity to us.

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The form of the amended and restated shareholders agreement is filed as an exhibit to the registration statement of which this prospectus forms a part, and the foregoing description is qualified by reference thereto.

Mezzanine Debt

As of December 31, 2011, we had $25.8 million aggregate principal amount of our mezzanine debt outstanding, of which $20.8 million was held by Palladium (a sponsor), $2.0 million was held by Richard A. Godley (a director and an individual owner), $2.0 million was held by Jerry L. Shirley (an individual owner) and $1.0 million was held by Brenda F. Kinlaw (an individual owner). We amended the agreement governing the mezzanine debt on January 18, 2012 to extend the maturity. The mezzanine debt matures on March 31, 2015 and accrues interest at a rate of 15.25% per annum. The mezzanine debt is secured by a junior lien on certain of our assets, including the equity interests of substantially all of our subsidiaries and substantially all of our finance receivables, and is subordinated to our senior revolving credit facility. The mezzanine debt was issued on August 25, 2010 to retire mezzanine debt in the same amount, which had been held by an unrelated lender. The agreement governing our mezzanine debt contains certain restrictive covenants, including maintenance of a specified interest coverage ratio, a prohibition on distributions, additional borrowings, debt ratios, maintenance of a minimum allowance for loan losses and certain other restrictions.

We intend to use the proceeds of this offering to repay the mezzanine debt in full. During 2011, Palladium, Richard A. Godley, Jerry L. Shirley and Brenda F. Kinlaw each received cash payments of interest totaling $3.5 million, $309,236, $309,236 and $154,618, respectively.

The agreement governing our mezzanine debt is filed as an exhibit to the registration statement of which this prospectus forms a part, and the foregoing description is qualified by reference thereto.

Advisory and Consulting Fees

We have entered into an advisory agreement with the sponsors, pursuant to which they have agreed to provide us with certain advisory and consulting services. In consideration for such services, we agreed to pay each sponsor an annual fee equal to $337,500 and pay or reimburse each of them for all reasonable out-of-pocket expenses directly related to the services rendered by the sponsors, not to exceed $50,000 in any year unless approved by our board of directors. This advisory agreement will be terminated pursuant to its terms effective upon the consummation of this offering upon the payment to each sponsor of a one-time termination fee of $337,500.

In March 2007, we entered into a consulting agreement with each of Mr. Godley, Brenda F. Kinlaw and Jerry L. Shirley, each an individual owner. In addition, Mr. Godley is a director on our board of directors. Pursuant to these agreements, each of them has agreed to provide us with certain consulting services. In consideration for such services, we agreed to pay each of them a monthly fee equal to $12,500, as well as pay or reimburse each of them for all reasonable out-of-pocket expenses directly related to the performance of his or her duties and responsibilities to us under the agreements. Under these consulting agreements, we also provided each of these individual owners with health insurance through March 2009. Each of these consulting agreements will be terminated pursuant to their terms upon the consummation of this offering upon the payment to each consultant of a one-time termination fee of $150,000.

We have agreed to pay the commercially reasonable legal fees incurred by the individual owners in connection with this offering.

Relationship Between Thomas F. Fortin and F. Barron Fletcher, III

Thomas F. Fortin, our chief executive officer and a director nominee, is the brother-in-law of F. Barron Fletcher, III, the managing member of Parallel, one of the sponsors.

Statement of Policy Regarding Transactions with Related Persons

Prior to the consummation of this offering, our board of directors will adopt a written statement of policy regarding transactions with related persons, which we refer to as our “related person policy.” Our related person policy requires that a “related person” (as defined as in paragraph (a) of Item 404 of Regulation S-K) must promptly disclose to our general counsel, or other person designated by our board of directors, any “related person

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transaction” (defined as any transaction that is anticipated would be reportable by us under Item 404(a) of Regulation S-K in which we were or are to be a participant and the amount involved exceeds $120,000 and in which any related person had or will have a direct or indirect material interest) and all material facts with respect thereto. The general counsel, or such other person, will then promptly communicate that information to our board of directors. No related person transaction will be executed without the approval or ratification of our board of directors. It is our policy that directors interested in a related person transaction will recuse themselves from any vote of a related person transaction in which they have an interest. Our policy does not specify the standards to be applied by directors in determining whether or not to approve or ratify a related person transaction and we accordingly anticipate that these determinations will be made in accordance with principles of Delaware law generally applicable to directors of a Delaware corporation.

Our amended and restated certificate of incorporation provides for the allocation of certain corporate opportunities between us, on the one hand, and the sponsors, on the other hand. These terms of our amended and restated certificate of incorporation are more fully described in “Description of Capital Stock – Corporate Opportunity.”

Indemnification of Directors and Officers

Our amended and restated bylaws provide that we will indemnify our directors and officers to the fullest extent permitted by the Delaware General Corporation Law, which we refer to as the DGCL. In addition, our amended and restated certificate of incorporation will provide that our directors will not be liable for monetary damages for breach of fiduciary duty to the fullest extent permitted by the DGCL.

There is no pending litigation or proceeding naming any of our directors or officers to which indemnification is being sought, and we are not aware of any pending or threatened litigation that may result in claims for indemnification by any director or officer.

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PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information regarding the beneficial ownership of shares of our common stock by (1) each person known to us to beneficially own more than 5% of the outstanding shares of our common stock, (2) each selling stockholder, (3) each of our directors, director nominees and named executive officers and (4) all of our directors and executive officers as a group, each as of the date of this prospectus. As of the date of this prospectus, there were 12 holders of record of our common stock.

Beneficial ownership is determined in accordance with the rules of the SEC. These rules deem common stock subject to options, warrants or rights currently exercisable, or exercisable within 60 days, to be outstanding for purposes of computing the percentage ownership of the person holding the options, warrants or rights or of a group of which the person is a member, but they do not deem such stock to be outstanding for purposes of computing the percentage ownership of any other person or group. All shares indicated below as beneficially owned are held with sole voting and investment power except as otherwise indicated.

All of our stockholders prior to this offering are parties to an amended and restated shareholders agreement that contains certain voting agreements. You should read the description of the shareholders agreement set forth under “Certain Relationships and Related Person Transactions” for more information regarding the voting arrangements.

	SHARES OF COMMON STOCK BENEFICIALLY OWNED
						AFTER THE OFFERING		AFTER THE OFFERING		SHARES OF	SHARES OF
						ASSUMING		ASSUMING		COMMON	COMMON
						UNDERWRITERS’		UNDERWRITERS’		STOCK	STOCK
						OPTION IS NOT		OPTION IS		BEING	SUBJECT TO
	PRIOR TO THE OFFERING					EXERCISED		EXERCISED IN FULL		OFFERED	OPTION
NAME OF BENEFICIAL OWNER	NUMBER		%			NUMBER	%	NUMBER	%	NUMBER	NUMBER
5% stockholders:
Parties to the amended and restated shareholders agreement as a group(1)		9,552,239		99.2	%
Palladium Equity Partners III, L.P.(2)		4,495,461		48.1	%
Parallel 2005 Equity Fund, LP(3)		2,565,057		27.5	%
Jerry L. Shirley(4)		962,062		10.3	%
The Richard A. Godley, Sr. Revocable Trust(5)		691,677		7.4	%
Named executive officers, directors and director nominees:
Richard A. Godley(6)		766,677		8.2	%
C. Glynn Quattlebaum(7)		477,917		5.0	%
Robert D. Barry(8)		98,215		1.0	%
Roel C. Campos		—		—
Richard T. Dell’Aquila(9)		—		—
Thomas F. Fortin(10)		196,563		2.1	%
Jared L. Johnson(11)		—		—
A. Michelle Masters		—		—
Alvaro G. de Molina		—		—
Carlos Palomares		—		—
David Perez(12)		—		—
Erik A. Scott(13)		—		—
Directors and executive officers as a group (9 persons)		1,495,158		15.5	%
Other selling stockholders:
Brenda F. Kinlaw(14)		183,073		2.0	%
Denise Godley(15)		75,000		*
William T. “Tyler” Godley(16)		35,870		*
Vanessa Bailey Godley(17)		31,122		*
Jesse W. Geddings(18)		35,000		*
Connected Capital Venture V, LP		79,332		*

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*

Represents less than 1%.

(1)

Parallel 2005 Equity Fund, LP, Palladium Equity Partners III, L.P., Richard A. Godley, Sr. Revocable Trust, Vanessa Bailey Godley, William T. “Tyler” Godley, the Tyler Godley 2011 Irrevocable Trust dated March 28, 2011 (with Jerry L. Shirley as investment advisor), Denise Godley, Jerry L. Shirley, Brenda F. Kinlaw, C. Glynn Quattlebaum, Sherri Quattlebaum and Jesse W. Geddings will be parties to our amended and restated shareholders agreement as described under “Certain Relationships and Related Person Transactions – Shareholders Agreement.”

⁽²⁾ Palladium Equity Partners III, L.L.C. (“Palladium General”) is the general partner of Palladium Equity Partners III, L.P. Marcos A. Rodriguez is the managing member of Palladium General. The address of each of the entities listed and Mr. Rodriguez is Rockefeller Center, 1270 Avenue of the Americas, Suite 2200, New York, New York 10020. Mr. Rodriguez disclaims beneficial ownership of such shares, except to the extent of his pecuniary interest therein. Palladium Equity Partners III, L.P. is a party to our shareholders agreement, one of its affiliates receives advisory fees from us pursuant to an advisory agreement that will be terminated upon consummation of this offering and one of its affiliates is a lender under our mezzanine debt, in each case as described under “Certain Relationships and Related Person Transactions.”

(3)	Parallel 2005 Equity Partners, LP is the general partner of Parallel 2005 Equity Fund, LP. Parallel 2005 Equity Partners, LLC is the general partner of Parallel 2005 Equity Partners, LP. F. Barron Fletcher, III is the managing member of Parallel 2005 Equity Partners, LLC. The address of each of the entities listed and Mr. Fletcher is 2100 McKinney Avenue, Suite 1200, Dallas, Texas 75201. Mr. Fletcher disclaims beneficial ownership of such shares, except to the extent of his pecuniary interest therein. Parallel 2005 Equity Fund, LP is a party to our shareholders agreement and its affiliate receives advisory fees from us pursuant to an advisory agreement that will be terminated upon consummation of this offering, as described under “Certain Relationships and Related Person Transactions.”
(4)	Includes 412,843 shares held by the Tyler Godley 2011 Irrevocable Trust dated March 28, 2011. Mr. Shirley is the investment advisor with respect to all shares of Regional’s stock held by the trust. U.S. Trust Company of Delaware is the administrative trustee. Mr. Shirley disclaims beneficial ownership of all shares held by the trust. The address for Mr. Shirley is c/o Regional Management Corp., 509 West Butler Road, Greenville, South Carolina 29607. Mr. Shirley is a party to our shareholders agreement, currently acts as a consultant to Regional and is a lender under our mezzanine debt, in each case as described under “Certain Relationships and Related Person Transactions.”
(5)	The Richard A. Godley, Sr. Revocable Trust is a party to our shareholders agreement as described under “Certain Relationships and Related Person Transactions – Shareholders Agreement.” Mr. and Ms. Godley are the trustees of the trust, and Ms. Godley disclaims beneficial ownership of shares held by the trust.

⁽⁶⁾ The address for Mr. Godley is c/o Regional Management Corp., 509 West Butler Road, Greenville, South Carolina 29607. Mr. Godley holds no shares directly. Includes shares owned by the Richard A. Godley, Sr. Revocable Trust (691,677 shares, of which      shares will be sold in this offering or      shares assuming the underwriters’ option is exercised in full) and shares owned by Mr. Godley’s spouse Denise Godley (75,000 shares of which      shares will be sold in this offering or      shares assuming the underwriters’ option is exercised in full). Mr. Godley disclaims beneficial ownership of the shares held by his wife. Does not include shares owned by Mr. Godley’s adult son, William T. “Tyler” Godley (35,870 shares of which      shares will be sold in this offering or      shares assuming the underwriters’ option is exercised in full), shares owned by the Tyler Godley 2011 Irrevocable Trust (412,843), as described in note (4) above, or shares owned by Vanessa Bailey Godley, the widow of Mr. Godley’s other adult son, Richard Allen Godley, Jr. (31,122 shares of which      shares will be sold in this offering or      shares assuming the underwriters’ option is exercised in full). Mr. Godley disclaims beneficial ownership with respect to all such shares. Mr. Godley is a director of Regional Management Corp. In addition, Mr. Godley is party to our shareholders agreement, currently serves as a consultant to Regional and is a lender under our mezzanine debt, in each case as described under “Certain Relationships and Related Person Transactions.”

⁽⁷⁾ Includes 294,844 shares subject to options either currently exercisable or exercisable within 60 days over which Mr. Quattlebaum will not have voting or investment power until the options are exercised. The shares described in this note are considered outstanding for the purpose of computing the percentage of outstanding stock owned by Mr. Quattlebaum and by directors and executive officers as a group, but not for the purpose of computing the percentage ownership of any other person. The remaining 183,073 shares are jointly held by Mr. Quattlebaum and his wife, Sherri Quattlebaum. Mr. Quattlebaum is our President and Chief Operating Officer, and Mr. and Ms. Quattlebaum are parties to our shareholders agreement as described under “Certain Relationships and Related Person Transactions – Shareholders Agreement.”

⁽⁸⁾ Includes 98,215 shares subject to options either currently exercisable or exercisable within 60 days over which Mr. Barry will not have voting or investment power until the options are exercised. The shares described in this note are considered outstanding for the purpose of computing the percentage of outstanding stock owned by Mr. Barry and by directors and executive officers as a group, but not for the purpose of computing the percentage ownership of any other person.

⁽⁹⁾ Mr. Dell’Aquila is a Principal with Parallel.

⁽¹⁰⁾ Includes 196,563 shares subject to options either currently exercisable or exercisable within 60 days over which Mr. Fortin will not have voting or investment power until the options are exercised. The shares described in this note are considered outstanding for the purpose of computing the percentage of outstanding stock owned by Mr. Fortin and by directors and executive officers as a group, but not for the purpose of computing the percentage ownership of any other person. Mr. Fortin was an operating partner of Parallel from 2003 to 2007.

⁽¹¹⁾ Mr. Johnson is a Managing Director with Parallel.

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(12)	Mr. Perez is a Managing Director with Palladium.
(13)	Mr. Scott is a Managing Director with Palladium.
(14)	Ms. Kinlaw currently is a party to our shareholders agreement, acts as a consultant to Regional and is a lender under our mezzanine debt, in each case as described under “Certain Relationships and Related Person Transactions.”
(15)	Denise Godley is the wife of Richard A. Godley, Sr. and the address for Ms. Godley is c/o Regional Management Corp., 509 West Butler Road, Greenville, South Carolina 29607. Ms. Godley is party to our shareholders agreement as described under “Certain Relationships and Related Person Transactions – Shareholders Agreement.” The Richard A. Godley, Sr. Revocable Trust, of which Mr. Godley is the trustee, holds 691,677 shares. Ms. Godley disclaims beneficial ownership of these shares.
(16)	William T. “Tyler” Godley is Richard A. Godley, Sr.’s adult son. Tyler Godley is party to our shareholders agreement as described under “Certain Relationships and Related Person Transactions – Shareholders Agreement.” Tyler Godley is the beneficiary of the Tyler Godley 2011 Irrevocable Trust dated March 28, 2011, which holds 412,843 shares, as described in note (4) above, but has no control over the voting or disposition of shares held by the trust.

⁽¹⁷⁾ Vanessa Bailey Godley is the widow of Richard A. Godley, Sr.’s. son, Richard Allen Godley, Jr. Ms. Godley is a party to our shareholders agreement as described under “Certain Relationships and Related Person Transactions – Shareholders Agreement.”

⁽¹⁸⁾ Mr. Geddings is our Vice President of South Carolina Operations. Mr. Geddings is a party to our shareholders agreement as described under “Certain Relationships and Related Person Transactions – Shareholders Agreement.”

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DESCRIPTION OF CAPITAL STOCK

The following description of our capital stock as it will be in effect upon the consummation of this offering is a summary and is qualified in its entirety by reference to our amended and restated certificate of incorporation and amended and restated bylaws, the forms of which are filed as exhibits to the registration statement of which this prospectus forms a part, and by applicable law. Our amended and restated certificate of incorporation will become effective immediately prior to the consummation of this offering.

Upon consummation of this offering, our authorized capital stock will consist of 1,000,000,000 shares of common stock, par value $0.10 per share, and 100,000,000 shares of preferred stock, par value $0.10 per share. Unless our board of directors determines otherwise, we will issue all shares of our capital stock in uncertificated form.

Common Stock

Holders of shares of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders.

Holders of shares of our common stock are entitled to receive dividends when and if declared by our board of directors out of funds legally available therefor, subject to any statutory or contractual restrictions on the payment of dividends and to any restrictions on the payment of dividends imposed by the terms of any outstanding preferred stock.

Upon our dissolution or liquidation or the sale of all or substantially all of our assets, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of shares of our common stock will be entitled to receive pro rata our remaining assets available for distribution.

Holders of shares of our common stock do not have preemptive, subscription, redemption or conversion rights.

Preferred Stock

Our amended and restated certificate of incorporation authorizes our board of directors to establish one or more series of preferred stock (including convertible preferred stock). Unless required by law or by any stock exchange, the authorized shares of preferred stock will be available for issuance without further action by you. Our board of directors is able to determine, with respect to any series of preferred stock, the terms and rights of that series, including:

n	the designation of the series;
n	the number of shares of the series, which our board may, except where otherwise provided in the preferred stock designation, increase or decrease, but not below the number of shares then-outstanding;
n	whether dividends, if any, will be cumulative or non-cumulative and the dividend rate of the series;
n	the dates at which dividends, if any, will be payable;
n	the redemption rights and price or prices, if any, for shares of the series;
n	the terms and amounts of any sinking fund provided for the purchase or redemption of shares of the series;
n	the amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of our company;
n	whether the shares of the series will be convertible into shares of any other class or series, or any other security, of our company or any other entity, and, if so, the specification of the other class or series or other security, the conversion price or prices or rate or rates, any rate adjustments, the date or dates as of which the shares will be convertible and all other terms and conditions upon which the conversion may be made;
n	restrictions on the issuance of shares of the same series or of any other class or series; and
n	the voting rights, if any, of the holders of the series.

We could issue a series of preferred stock that could, depending on the terms of the series, impede or discourage an acquisition attempt or other transaction that some, or a majority, of you might believe to be in your best interests or in which you might receive a premium for your shares of common stock over the market price of the shares of common stock.

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Authorized but Unissued Capital Stock

Delaware law does not require stockholder approval for any issuance of authorized shares. However, the listing requirements of the New York Stock Exchange, which would apply so long as the shares of common stock remain listed on the New York Stock Exchange, require stockholder approval of certain issuances equal to or exceeding 20% of the then-outstanding voting power or the then-outstanding number of shares of common stock. These additional shares may be used for a variety of corporate purposes, including future public offerings, to raise additional capital or to facilitate acquisitions.

One of the effects of the existence of unissued and unreserved common stock or preferred stock may be to enable our board of directors to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of our company by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of our management and possibly deprive the stockholders of opportunities to sell their shares at prices higher than prevailing market prices.

Forum Selection Clause

Unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL or (iv) any action asserting a claim governed by the internal affairs doctrine, in each such case subject to said Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock of the corporation will be deemed to have notice of and consented to the forum selection clause.

Anti-Takeover Effects of Provisions of Delaware Law and Our Amended and Restated Certificate of Incorporation and Bylaws

Undesignated Preferred Stock

The ability to authorize undesignated preferred stock will make it possible for our board of directors to issue preferred stock with super majority voting, special approval, dividend or other rights or preferences on a discriminatory basis that could impede the success of any attempt to acquire us or otherwise effect a change in control of us. These and other provisions may have the effect of deferring, delaying or discouraging hostile takeovers, or changes in control or management of our company.

Requirements for Advance Notification of Stockholder Meetings, Nominations and Proposals

Our amended and restated bylaws provide that special meetings of the stockholders may be called only by or at the direction of the board of directors, the chairman of our board or the chief executive officer or, for so long as the parties to our shareholders agreement continue to beneficially own at least 40% of the total voting power of all the then outstanding shares of our capital stock, by the sponsors. Our amended and restated bylaws prohibit the conduct of any business at a special meeting other than as specified in the notice for such meeting. These provisions may have the effect of deferring, delaying or discouraging hostile takeovers, or changes in control or management of our company.

Our amended and restated bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors, other than nominations made by or at the direction of the board of directors or a committee of the board of directors. In order for any matter to be “properly brought” before a meeting, a stockholder will have to comply with advance notice requirements and provide us with certain information. Additionally, vacancies and newly created directorships may be filled only by a vote of a majority of the directors then in office, even though less than a quorum, and not by the stockholders. Our amended and restated bylaws allow the presiding officer at a meeting of the stockholders to adopt rules and regulations for the conduct of meetings which may have the effect of precluding the conduct of certain business at a meeting if the rules and regulations are not followed. These provisions may also defer, delay or discourage a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company.

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Our amended and restated certificate of incorporation provides that the board of directors is expressly authorized to make, alter, or repeal our bylaws and that our stockholders may only amend our bylaws with the approval of 80% or more of all of the outstanding shares of our capital stock entitled to vote from and after the date on which the parties to our shareholders agreement cease to beneficially own at least 40% of the total voting power of all the then outstanding shares of our capital stock or with the approval of a majority of the voting power of all the then outstanding shares of our capital stock prior to such date.

No Cumulative Voting

The DGCL provides that stockholders are not entitled to the right to cumulate votes in the election of directors unless our amended and restated certificate of incorporation provides otherwise. Our amended and restated certificate of incorporation does not expressly provide for cumulative voting.

Stockholder Action by Written Consent

Pursuant to Section 228 of the DGCL, any action required to be taken at any annual or special meeting of the stockholders may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of our stock entitled to vote thereon were present and voted, unless the company’s amended and restated certificate of incorporation provides otherwise. Our amended and restated certificate of incorporation provides that from and after the date on which the parties to our shareholders agreement cease to beneficially own at least 40% of the total voting power of all the then outstanding shares of our capital stock any action, any action required or permitted to be taken by our stockholders may not be effected by consent in writing by such stockholders unless such action is recommended by all directors then in office.

Delaware Anti-Takeover Statute

We have opted out of Section 203 of the DGCL. Section 203 provides that, subject to certain exceptions specified in the law, a publicly-held Delaware corporation shall not engage in certain “business combinations” with any “interested stockholder” for a three-year period after the date of the transaction in which the person became an interested stockholder. These provisions generally prohibit or delay the accomplishment of mergers, assets or stock sales or other takeover or change-in-control attempts that are not approved by a company’s board of directors.

However, our amended and restated certificate of incorporation and bylaws will provide that in the event the parties to our shareholders agreement cease to beneficially own at least 5% of the total voting power of all the then outstanding shares of our capital stock, we will automatically become subject to Section 203 of the DGCL. In general, Section 203 prohibits a publicly-held Delaware corporation from engaging, under certain circumstances, in a business combination with an interested stockholder for a period of three years following the date the person became an interested stockholder unless:

n	prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;
n	upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding (1) shares owned by persons who are directors and also officers and (2) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
n	on or subsequent to the date of the transaction, the business combination is approved by the board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 662/3% of the outstanding voting stock which is not owned by the interested stockholder.

Generally, a business combination includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An interested stockholder is a person who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status, did own 15% or more of a corporation’s outstanding voting stock.

Under certain circumstances, Section 203 makes it more difficult for a person who would be an “interested stockholder” to effect various business combinations with a corporation for a three-year period. Accordingly, Section 203 could have an anti-takeover effect with respect to certain transactions our board of directors does not

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approve in advance. The provisions of Section 203 may encourage companies interested in acquiring our company to negotiate in advance with our board of directors because the stockholder approval requirement would be avoided if our board of directors approves either the business combination or the transaction that results in the stockholder becoming an interested stockholder. However, Section 203 also could discourage attempts that might result in a premium over the market price for the shares of common stock held by stockholders. These provisions also may make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.

Corporate Opportunity

Our amended and restated certificate of incorporation provides that our non-employee directors and their affiliates have no obligation to offer us an opportunity to participate in business opportunities presented to them or their affiliates even if the opportunity is one that we might reasonably have pursued, and neither the sponsors nor their affiliates will be liable to us or our stockholders for breach of any duty by reason of any such activities. Stockholders will be deemed to have notice of and consented to this provision of our amended and restated certificate of incorporation.

Transfer Agent and Registrar

The transfer agent and registrar for shares of our common stock will be American Stock Transfer & Trust Company, LLC.

Listing

Our common stock has been approved for listing on the New York Stock Exchange under the symbol “RM.”

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CERTAIN UNITED STATES FEDERAL INCOME AND
ESTATE TAX CONSEQUENCES TO NON-U.S. HOLDERS

The following is a summary of certain United States federal income and estate tax consequences of the purchase, ownership and disposition of our common stock as of the date hereof. Except where noted, this summary deals only with common stock that is held as a capital asset by a non-U.S. holder.

A “non-U.S. holder” means a person (other than a partnership) that is not for United States federal income tax purposes any of the following:

n	an individual citizen or resident of the United States;
n	a corporation (or any other entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
n	an estate the income of which is subject to United States federal income taxation regardless of its source; or
n	a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person.

This summary is based upon provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and regulations, rulings and judicial decisions as of the date hereof. Those authorities may be changed, perhaps retroactively, so as to result in United States federal income and estate tax consequences different from those summarized below. This summary does not address all aspects of United States federal income and estate taxes and does not deal with foreign, state, local or other tax considerations that may be relevant to non-U.S. holders in light of their personal circumstances. In addition, it does not represent a detailed description of the United States federal income tax consequences applicable to you if you are subject to special treatment under the United States federal income tax laws (including if you are a United States expatriate, “controlled foreign corporation,” “passive foreign investment company” or a partnership or other pass-through entity for United States federal income tax purposes). We cannot assure you that a change in law will not alter significantly the tax considerations that we describe in this summary.

If a partnership (or any entity treated as a partnership for United States federal income tax purposes) holds our common stock, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If you are a partner of a partnership holding our common stock, you should consult your tax advisors.

If you are considering the purchase of our common stock, you should consult your own tax advisors concerning the particular United States federal income and estate tax consequences to you of the ownership of the common stock, as well as the consequences to you arising under the laws of any other taxing jurisdiction.

Dividends

Dividends paid to a non-U.S. holder of our common stock generally will be subject to withholding of United States federal income tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. However, dividends that are effectively connected with the conduct of a trade or business by the non-U.S. holder within the United States (and, if required by an applicable income tax treaty, are attributable to a United States permanent establishment) are not subject to the withholding tax, provided certain certification and disclosure requirements are satisfied. Instead, such dividends are subject to United States federal income tax on a net income basis in the same manner as if the non-U.S. holder were a United States person as defined under the Code. Any such effectively connected dividends received by a foreign corporation may be subject to an additional “branch profits tax” at a 30% rate or such lower rate as may be specified by an applicable income tax treaty.

A non-U.S. holder of our common stock who wishes to claim the benefit of an applicable treaty rate and avoid backup withholding, as discussed below, for dividends will be required (a) to complete Internal Revenue Service Form W-8BEN (or other applicable form) and certify under penalty of perjury that such holder is not a United States person as defined under the Code and is eligible for treaty benefits or (b) if our common stock is held through certain foreign intermediaries, to satisfy the relevant certification requirements of applicable United States Treasury regulations. Special certification and other requirements apply to certain non-U.S. holders that are pass-through entities rather than corporations or individuals.

A non-U.S. holder of our common stock eligible for a reduced rate of United States withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the Internal Revenue Service.

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Gain on Disposition of Shares of Common Stock

Any gain realized on the disposition of our common stock generally will not be subject to United States federal income tax unless:

n	the gain is effectively connected with a trade or business of the non-U.S. holder in the United States (and, if required by an applicable income tax treaty, is attributable to a United States permanent establishment of the non-U.S. holder);
n	the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of that disposition, and certain other conditions are met; or
n	we are or have been a “United States real property holding corporation” for United States federal income tax purposes.

An individual non-U.S. holder described in the first bullet point immediately above will be subject to tax on the net gain derived from the sale under regular graduated United States federal income tax rates. An individual non-U.S. holder described in the second bullet point immediately above will be subject to a flat 30% tax on the gain derived from the sale, which may be offset by United States source capital losses, even though the individual is not considered a resident of the United States. If a non-U.S. holder that is a foreign corporation falls under the first bullet point immediately above, it will be subject to tax on its net gain in the same manner as if it were a United States person as defined under the Code and, in addition, may be subject to the branch profits tax equal to 30% of its effectively connected earnings and profits or at such lower rate as may be specified by an applicable income tax treaty.

We believe we are not and do not anticipate becoming a “United States real property holding corporation” for United States federal income tax purposes.

Federal Estate Tax

Common stock held by an individual non-U.S. holder at the time of death will be included in such holder’s gross estate for United States federal estate tax purposes, unless an applicable estate tax treaty provides otherwise.

Information Reporting and Backup Withholding

We must report annually to the Internal Revenue Service and to each non-U.S. holder the amount of dividends paid to such holder and the tax withheld with respect to such dividends, regardless of whether withholding was required. Copies of the information returns reporting such dividends and withholding may also be made available to the tax authorities in the country in which the non-U.S. holder resides under the provisions of an applicable income tax treaty.

A non-U.S. holder will be subject to backup withholding for dividends paid to such holder unless such holder certifies under penalty of perjury that it is a non-U.S. holder (and the payor does not have actual knowledge or reason to know that such holder is a United States person as defined under the Code), or such holder otherwise establishes an exemption.

Information reporting and, depending on the circumstances, backup withholding will apply to the proceeds of a sale of our common stock within the United States or conducted through certain United States-related financial intermediaries, unless the beneficial owner certifies under penalty of perjury that it is a non-U.S. holder (and the payor does not have actual knowledge or reason to know that the beneficial owner is a United States person as defined under the Code), or such owner otherwise establishes an exemption.

Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a non-U.S. holder’s United States federal income tax liability provided the required information is furnished to the Internal Revenue Service.

Additional Withholding Requirements

Under recently enacted legislation and administrative guidance, the relevant withholding agent may be required to withhold 30% of any dividends paid after December 31, 2013 and the proceeds of a sale of our common stock paid after December 31, 2014 to (i) a foreign financial institution unless such foreign financial institution agrees to verify, report and disclose its United States accountholders and meets certain other specified requirements or (ii) a non-financial foreign entity that is the beneficial owner of the payment unless such entity certifies that it does not have any substantial United States owners or provides the name, address and taxpayer identification number of each substantial United States owner and such entity meets certain other specified requirements. Prospective investors should consult their own tax advisors regarding this legislation.

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for shares of our common stock. We cannot predict the effect, if any, future sales of shares of common stock, or the availability for future sale of shares of common stock, will have on the market price of shares of our common stock prevailing from time to time. The sale of substantial amounts of shares of our common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our common stock.

Upon consummation of this offering we will have a total of           shares of our common stock outstanding. Of the outstanding shares, the           shares sold in this offering (or           shares if the underwriters exercise their over-allotment option in full) will be freely tradable without restriction or further registration under the Securities Act except that any shares held by our affiliates, as that term is defined under Rule 144 of the Securities Act, may be sold only in compliance with the limitations described below. The remaining outstanding shares of common stock will be deemed restricted securities, as defined under Rule 144. We expect that each of the sponsors will be considered affiliates 180 days after this offering based on their expected share ownership (consisting of           shares owned by Palladium and           shares owned by Parallel assuming no exercise of the underwriters’ option to purchase additional shares), as well as their board nomination rights. Certain other of our shareholders may also be considered affiliates at that time. Restricted securities may be sold in the public market only if the sale is registered or if it qualifies for an exemption from registration under the Securities Act, certain of which we summarize below.

Lock-Up Agreements

We, our officers, directors and holders of substantially all of our outstanding shares of common stock immediately prior to this offering will be subject to lock-up agreements with the underwriters that will restrict the sale of the shares of our common stock held by them for 180 days after the date of this prospectus, subject to certain exceptions, including the shares of common stock being sold in this offering. See “Underwriting (Conflicts of Interest)” for a description of these lock-up agreements.

Eligibility of Restricted Shares for Sale in the Public Market

Other than the shares sold in this offering, all of the remaining shares of our common stock will be available for sale, subject to the lock-up agreements described above, after the date of this prospectus in registered sales or pursuant to Rule 144 or another exemption from registration. For the purpose of the volume, manner of sale and other limitations under Rule 144 applicable to affiliates described below, we expect that each of the sponsors will be considered affiliates 180 days after this offering based on their expected share ownership (consisting of           shares owned by Palladium and           shares owned by Parallel assuming no exercise of the underwriters’ option to purchase additional shares), as well as their board nomination rights. Certain other of our shareholders may also be considered affiliates at that time.

Rule 144

In general, under Rule 144, as currently in effect, a person who is not deemed to be or have been one of our affiliates for purposes of the Securities Act at any time during 90 days preceding a sale and who has beneficially owned the shares proposed to be sold for at least six months is entitled to sell such shares without registration, subject to compliance with the public information requirements of Rule 144. If such a person has beneficially owned the shares proposed to be sold for at least one year then such person is entitled to sell such shares without complying with any of the requirements of Rule 144.

In general, under Rule 144, as currently in effect, our affiliates or persons selling shares on behalf of our affiliates are entitled to sell within any three-month period beginning 90 days after the date of this prospectus, a number of shares that does not exceed the greater of:

n   1% of the number of shares of our common stock then outstanding, which will equal approximately           shares immediately after this offering; or

n   the average weekly trading volume of our common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.

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Sales under Rule 144 by our affiliates or persons selling shares on behalf of our affiliates are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us.

Stock Incentive Compensation

In addition, there were 589,622 shares of our common stock issuable upon exercise of options at a weighted average exercise price of $5.4623 per share outstanding as of December 31, 2011 under our 2007 Stock Plan, including options granted in 2007 and 2008. Furthermore, 950,000 shares of common stock may be granted under our 2011 Stock Plan, including           shares issuable upon the exercise of stock options that we intend to grant to our executive officers and directors and           shares issuable upon the exercise of stock options that we intend to grant to our other employees, each at the time of this offering. See “Management – Compensation Discussion and Analysis – 2011 Stock Incentive Plan” and “– Actions Taken in 2012 and Anticipated Actions in Connection with the Offering.” We intend to file one or more registration statements on Form S-8 under the Securities Act to register shares of common stock or securities convertible into or exchangeable for shares of common stock issued under or covered by our 2011 Stock Plan. Any such Form S-8 registration statements will automatically become effective upon filing. Accordingly, shares of common stock registered under such registration statements will be available for sale in the open market. We expect that the initial registration statement on Form S-8 will cover           shares of common stock.

Registration Rights

Upon the closing of this offering, we will enter into an amended and restated shareholders agreement with our existing owners, pursuant to which we will grant them, their affiliates and certain of their transferees the right, under certain circumstances and subject to certain restrictions, to require us to register under the Securities Act shares of common stock (and other securities convertible into or exchangeable or exercisable for shares of common stock) held by them. Securities registered under any such registration statement will be available for sale in the open market unless restrictions apply. See “Certain Relationships and Related Person Transactions – Shareholders Agreement.”

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UNDERWRITING (CONFLICTS OF INTEREST)

Subject to the terms and conditions set forth in the underwriting agreement by and among us, the selling stockholders and Jefferies & Company, Inc., as representative of the underwriters, we and the selling stockholders have agreed to sell to the underwriters and the underwriters have severally agreed to purchase from us and the selling stockholders, the number of shares of common stock indicated in the table below:

	NUMBER OF SHARES
UNDERWRITERS	OF COMMON STOCK
Jefferies & Company, Inc.
Stephens Inc.
JMP Securities LLC
BMO Capital Markets Corp.
Total

Jefferies & Company, Inc. and Stephens Inc. are acting as joint book-running managers of this offering and Jefferies & Company, Inc. is acting as representative of the underwriters named above.

The underwriting agreement provides that the obligations of the several underwriters are subject to certain conditions precedent such as the receipt by the underwriters of officers’ certificates and legal opinions and approval of certain legal matters by their counsel. The underwriting agreement provides that the underwriters will purchase all of the shares, other than those shares subject to the underwriters’ over-allotment option, if any of them are purchased. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the nondefaulting underwriters may be increased or the underwriting agreement may be terminated. We and the selling stockholders have agreed to indemnify the underwriters and certain of their controlling persons against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the underwriters may be required to make in respect of those liabilities.

The underwriters have advised us that they currently intend to make a market in our common stock. However, the underwriters are not obligated to do so and may discontinue any market-making activities at any time without notice. No assurance can be given as to the liquidity of the trading market for our common stock.

The underwriters are offering the shares of common stock subject to their acceptance of the shares from us and the selling stockholders and subject to prior sale. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part. In addition, the underwriters have advised us that they do not expect sales to accounts over which they have discretionary authority to exceed 5% of the shares of common stock being offered.

Commission and Expenses

The underwriters have advised us that they propose to offer the shares to the public at the initial public offering price set forth on the cover page of this prospectus and to certain dealers at that price less a concession not in excess of $      per share. The underwriters may allow, and certain dealers may reallow, a discount from the concession not in excess of $      per share to certain brokers and dealers. After the offering, the initial public offering price, concession and reallowance to dealers may be reduced by the representative. No such reduction will change the amount of proceeds to be received by us as set forth on the cover page of this prospectus.

The following table shows the public offering price, the underwriting discount that we and the selling stockholders are to pay the underwriters and the proceeds, before expenses, to us and the selling stockholders in connection with

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this offering. Such amounts are shown assuming both no exercise and full exercise of the underwriters’ over-allotment option.

	PER SHARE		TOTAL
	WITHOUT	WITH	WITHOUT	WITH
	OVER-ALLOTMENT	OVER-ALLOTMENT	OVER-ALLOTMENT	OVER-ALLOTMENT
	OPTION	OPTION	OPTION	OPTION
Public offering price	$	$	$	$
Underwriting discount paid by us	$	$	$	$
Proceeds to us, before expenses	$	$	$	$
Underwriting discount paid by the selling stockholders	$	$	$	$
Proceeds to the selling stockholders, before expenses	$	$	$	$

We estimate expenses payable by us in connection with this offering, other than the underwriting discount referred to above, will be approximately $      million.

Determination of Offering Price

Prior to the offering, there has not been a public market for our common stock. Consequently, the initial public offering price for our common stock will be determined by negotiations between us and the underwriters. Among the factors to be considered in these negotiations will be prevailing market conditions, our financial information, market valuations of other companies that we and the underwriters believe to be comparable to us, estimates of our business potential, the present state of our development and other factors deemed relevant.

We offer no assurances that the initial public offering price will correspond to the price at which the common stock will trade in the public market subsequent to the offering or that an active trading market for the common stock will develop and continue after the offering.

Listing

Our common stock has been approved for listing on the New York Stock Exchange under the trading symbol “RM.”

Over-Allotment Option

The selling stockholders have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to an aggregate of           additional shares of common stock from the selling stockholders at the public offering price set forth on the cover page of this prospectus, less the underwriting discount, solely to cover over-allotments, if any. If the underwriters exercise this option, each underwriter will be obligated, subject to specified conditions, to purchase a number of additional shares proportionate to that underwriter’s initial purchase commitment as indicated in the table above. This option may be exercised only if the underwriters sell more shares than the total number set forth on the cover page of this prospectus.

No Sales of Similar Securities

We, our officers, directors and holders of substantially all of our outstanding shares of common stock immediately prior to this offering have agreed, subject to specified exceptions described below, not to directly or indirectly:

n	sell, offer, contract or grant any option to sell (including any short sale), pledge, transfer, establish an open “put equivalent position” within the meaning of Rule 16a-1(h) under the Exchange Act, or
n	otherwise dispose of any shares of common stock, options or warrants to acquire common stock, or securities exchangeable or exercisable for or convertible into common stock currently or hereafter owned either of record or beneficially, or
n	publicly announce an intention to do any of the foregoing for a period of 180 days after the date of this prospectus without the prior written consent of Jefferies & Company, Inc.

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This restriction terminates after the close of trading of the common stock on and including the 180 days after the date of this prospectus. However, subject to certain exceptions, in the event that either:

n	during the last 17 days of the 180-day restricted period, we issue an earnings release or material news or a material event relating to us occurs, or
n	prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day restricted period,

then in either case the expiration of the 180-day restricted period will be extended until the expiration of the 18-day period beginning on the date of the issuance of an earnings release or the occurrence of the material news or event, as applicable, unless Jefferies & Company, Inc. waives, in writing, such an extension.

The restrictions do not apply to:

n	sales of shares of our common stock to the underwriters pursuant to the underwriting agreement;
n	certain transfers of shares of our common stock or securities convertible or exchangeable into such shares acquired in the open market or in the offering;
n	certain transfers of shares of our common stock or securities convertible or exchangeable into such shares to affiliates, related entities or family members;
n	certain transfers as a bona fide gift or gifts, or for estate planning purposes; or
n	transfers of shares of common stock solely in connection with certain “cashless” exercises of stock options, including the sale of such shares in respect of tax withholding payments.

Jefferies & Company, Inc. may, in its sole discretion and at any time or from time to time before the termination of the 180-day period, without public notice, release all or any portion of the securities subject to lock-up agreements. There are no existing agreements between the underwriters and any of our stockholders who will execute a lock-up agreement, providing consent to the sale of shares prior to the expiration of the lock-up period.

Stabilization

The underwriters have advised us that, pursuant to Regulation M under the Exchange Act, certain persons participating in the offering may engage in transactions, including over-allotment, stabilizing bids, syndicate covering transactions or the imposition of penalty bids, which may have the effect of stabilizing or maintaining the market price of the common stock at a level above that which might otherwise prevail in the open market. Over-allotment involves syndicate sales in excess of the offering size, which creates a syndicate short position. “Covered” short sales are sales made in an amount not greater than the underwriters’ over-allotment option. The underwriters may close out any covered short position by either exercising their over-allotment option or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. “Naked” short sales are sales in excess of the over-allotment option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market after pricing that could adversely affect investors who purchase in this offering. A stabilizing bid is a bid for the purchase of common stock on behalf of the underwriters for the purpose of fixing or maintaining the price of the common stock. A syndicate covering transaction is the bid for or the purchase of common stock on behalf of the underwriters to reduce a short position incurred by the underwriters in connection with the offering. A penalty bid is an arrangement permitting the underwriters to reclaim the selling concession otherwise accruing to a syndicate member in connection with the offering if the notes originally sold by such syndicate member are purchased in a syndicate covering transaction and therefore have not been effectively placed by such syndicate member.

None of we, the selling stockholders or any of the underwriters makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our common stock. The underwriters are not obligated to engage in these activities and, if commenced, any of the activities may be discontinued at any time.

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Electronic Distribution

A prospectus in electronic format may be made available by e-mail or on the web sites or through online services maintained by one or more of the underwriters or their affiliates. In those cases, prospective investors may view offering terms online and may be allowed to place orders online. The underwriters may agree with us to allocate a specific number of shares of common stock for sale to online brokerage account holders. Any such allocation for online distributions will be made by the underwriters on the same basis as other allocations. Other than the prospectus in electronic format, the information on the underwriters’ web sites and any information contained in any other web site maintained by any of the underwriters is not part of this prospectus, has not been approved and/or endorsed by us or the underwriters and should not be relied upon by investors.

Affiliations and Conflicts of Interest

The underwriters or their affiliates may from time to time in the future provide investment banking, commercial lending and financial advisory services to us and our affiliates in the ordinary course of business. The underwriters and their affiliates, as applicable, will receive customary compensation and reimbursement of expenses in connection with such services. In the course of their businesses, the underwriters and their affiliates may actively trade our securities or loans for their own account or for the accounts of customers, and, accordingly, the underwriters and their affiliates may at any time hold long or short positions in such securities or loans.

BMO Capital Markets Financing, Inc., an affiliate of BMO Capital Markets Corp., is one of the lenders under our senior revolving credit facility and Bank of Montreal, another affiliate of BMO Capital Markets Corp., is the counterparty to our interest rate cap. We intend to use a portion of the proceeds to repay outstanding borrowings under the senior revolving credit facility. Because more than 5% of the proceeds of this offering, not including underwriting compensation, may be received by an affiliate of an underwriter in this offering depending on the final offering price per share, this offering is being conducted in compliance with FINRA Rule 5121, as administered by the Financial Industry Regulatory Authority, Inc. However, no qualified independent underwriter is needed for this offering because this offering meets the conditions set forth in FINRA Rule 5121(a)(1)(A). See “Use of Proceeds.”

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CERTAIN ERISA CONSIDERATIONS

The following discussion is a summary of certain considerations associated with the purchase of our common stock by (i) employee benefit plans that are subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (ii) plans, individual retirement accounts and other arrangements that are subject to Section 4975 of the Code or provisions under any federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code, and (iii) entities whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, an “ERISA Plan”).

Section 406 of ERISA and Section 4975 of the Code prohibit ERISA Plans from engaging in specified transactions involving “plan assets” with persons or entities who are “parties in interest,” within the meaning of ERISA, or “disqualified persons,” within the meaning of Section 4975 of the Code, unless an exemption is available. A party in interest or disqualified person who engaged in a non-exempt prohibited transaction may be subject to excise taxes and other penalties and liabilities under ERISA and the Code. In addition, the fiduciary of the ERISA Plan that engaged in such a non-exempt prohibited transaction may be subject to penalties and liabilities under ERISA and the Code. A prohibited transaction within the meaning of ERISA and the Code may result if our common stock is acquired by an ERISA Plan to which we or an underwriter is a party in interest and such acquisition is not entitled to an applicable exemption, of which there are many.

The foregoing discussion is general in nature and is not intended to be all-inclusive. Due to the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries, or other persons considering purchasing our common stock on behalf of, or with the assets of, any ERISA Plan, consult with their counsel regarding the matters described herein.

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NOTICE TO INVESTORS

The shares of common stock are being offered for sale only in those jurisdictions where it is lawful to make such offers. The distribution of this prospectus and the offering or sale of the shares of common stock in some jurisdictions may be restricted by law. Persons into whose possession this prospectus comes are required by us and the underwriters to inform themselves about and to observe any applicable restrictions. This prospectus may not be used for or in connection with an offer or solicitation by any person in any jurisdiction in which that offer or solicitation is not authorized or to any person to whom it is unlawful to make that offer or solicitation.

European Economic Area

In relation to each member state of the European Economic Area which has implemented the Prospectus Directive, each of which we refer to as a Relevant Member State, including each Relevant Member State that has implemented amendments to Article 3(2) of the Prospectus Directive with regard to persons to whom an offer of securities is addressed and the denomination per unit of the offer of securities, each of which we refer to as an Early Implementing Member State, with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State, which we refer to as the Relevant Implementation Date, no offer of shares of our common stock offered hereby will be made in this offering to the public in that Relevant Member State (other than offers, which we refer to as Permitted Public Offers where a prospectus will be published in relation to the shares of our common stock offered hereby that has been approved by the competent authority in a Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive), except that with effect from and including that Relevant Implementation Date, offers of shares of our common stock offered hereby may be made to the public in that Relevant Member State at any time:

(a)  to “qualified investors,” as defined in the Prospectus Directive, including:

(i)

(in the case of Relevant Member States other than Early Implementing Member States), legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities, or any legal entity which has two or more of (i) an average of at least 250 employees during the last financial year; (ii) a total balance sheet of more than €43.0 million and (iii) an annual net turnover of more than €50.0 million as shown in its last annual or consolidated accounts; or

(ii)

(in the case of Early Implementing Member States), persons or entities that are described in points (1) to (4) of Section I of Annex II to Directive 2004/39/EC, and those who are treated on request as professional clients in accordance with Annex II to Directive 2004/39/EC, or recognized as eligible counterparties in accordance with Article 24 of Directive 2004/39/EC unless they have requested that they be treated as non-professional clients; or

(b)	to fewer than 100 (or, in the case of Early Implementing Member States, 150) natural or legal persons (other than “qualified investors” as defined in the Prospectus Directive) subject to obtaining the prior consent of the book-running mangers for any such offer; or
(c)	in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of shares of our common stock offered hereby shall result in a requirement for the publication of a prospectus pursuant to Article 3 of the Prospectus Directive or of a supplement to a prospectus pursuant to Article 16 of the Prospectus Directive.

Each person in a Relevant Member State (other than a Relevant Member State where there is a Permitted Public Offer) who initially acquires any shares of our common stock offered hereby or to whom any offer is made under this offering will be deemed to have represented, acknowledged and agreed to and with each book-running manager that (A) it is a “qualified investor,” and (B) in the case of any shares of our common stock offered hereby acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (x) the shares of our common stock offered hereby acquired by it in this offering have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than “qualified

118

investors” as defined in the Prospectus Directive, or in circumstances in which the prior consent of the Subscribers has been given to the offer or resale, or (y) where shares of our common stock offered hereby have been acquired by it on behalf of persons in any Relevant Member State other than “qualified investors” as defined in the Prospectus Directive, the offer of those shares to it is not treated under the Prospectus Directive as having been made to such persons.

For the purpose of the above provisions, the expression “an offer to the public” in relation to any shares of our common stock offered hereby in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer of any such shares to be offered so as to enable an investor to decide to purchase any such shares, as the same may be varied in the Relevant Member State by any measure implementing the Prospectus Directive in the Relevant Member State and the expression “Prospectus Directive” means Directive 2003/71/EC (including that Directive as amended, in the case of Early Implementing Member States) and includes any relevant implementing measure in each Relevant Member State.

United Kingdom

An offer of shares may not be made to the public in the United Kingdom within the meaning of Section 102B of the Financial Services and Markets Act 2000 (as amended) (FSMA) except to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities or otherwise in circumstances which do not require us to publish a prospectus pursuant to the Prospectus Rules of the Financial Services Authority (FSA).

An invitation or inducement to engage in investment activity (within the meaning of Section 21 of FSMA) may only be communicated to persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or in circumstances in which Section 21 of FSMA does not apply to us.

All applicable provisions of the FSMA with respect to anything done by the underwriters in relation to our common stock must be complied with in, from or otherwise involving the United Kingdom.

Germany

Any offer or solicitation of securities within Germany must be in full compliance with the German Securities Prospectus Act (Wertpapierprospektgesetz – WpPG). The offer and solicitation of securities to the public in Germany requires the publication of a prospectus that has to be filed with and approved by the German Federal Financial Services Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin). This prospectus has not been and will not be submitted for filing and approval to the BaFin and, consequently, will not be published. Therefore, this prospectus does not constitute a public offer under the German Securities Prospectus Act (Wertpapierprospektgesetz). This prospectus and any other document relating to our common stock, as well as any information contained therein, must therefore not be supplied to the public in Germany or used in connection with any offer for subscription of our common stock to the public in Germany, any public marketing of our common stock or any public solicitation for offers to subscribe for or otherwise acquire our common stock. This prospectus and other offering materials relating to the offer of our common stock are strictly confidential and may not be distributed to any person or entity other than the designated recipients hereof.

Notice to Prospective Investors in Hong Kong

Our securities may not be offered or sold in Hong Kong, by means of this prospectus or any document other than (i) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (ii) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong). No advertisement, invitation or document relating to our securities may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere) which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to the securities which are or are

119

intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

Notice to Prospective Investors in Singapore

This document has not been registered as a prospectus with the Monetary Authority of Singapore and in Singapore, the offer and sale of our securities is made pursuant to exemptions provided in sections 274 and 275 of the Securities and Futures Act, Chapter 289 of Singapore (“SFA”). Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of our securities may not be circulated or distributed, nor may our securities be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor as defined in Section 4A of the SFA pursuant to Section 274 of the SFA, (ii) to a relevant person as defined in section 275(2) of the SFA pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to compliance with the conditions (if any) set forth in the SFA. Moreover, this document is not a prospectus as defined in the SFA. Accordingly, statutory liability under the SFA in relation to the content of prospectuses would not apply. Prospective investors in Singapore should consider carefully whether an investment in our securities is suitable for them.

Where our securities are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

(a)	by a corporation (which is not an accredited investor as defined in Section 4A of the SFA) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
(b)	for a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,

shares of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferable for six months after that corporation or that trust has acquired the shares under Section 275 of the SFA, except:

(1)	to an institutional investor (for corporations under Section 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA, or any person pursuant to an offer that is made on terms that such shares of that corporation or such rights and interest in that trust are acquired at a consideration of not less than $200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the conditions, specified in Section 275 of the SFA;
(2)	where no consideration is given for the transfer; or
(3)	where the transfer is by operation of law.

In addition, investors in Singapore should note that the securities acquired by them are subject to resale and transfer restrictions specified under Section 276 of the SFA, and they, therefore, should seek their own legal advice before effecting any resale or transfer of their securities.

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LEGAL MATTERS

The validity of the shares of common stock will be passed upon for us by Simpson Thacher & Bartlett LLP, New York, New York and by Womble Carlyle Sandridge & Rice LLP, Greenville, South Carolina. Certain legal matters in connection with this offering will be passed upon for the underwriters by White & Case LLP, New York, New York.

EXPERTS

The consolidated financial statements of Regional Management Corp. and subsidiaries as of December 31, 2010 and December 31, 2011 and for the years ended December 31, 2009, December 31, 2010 and December 31, 2011 appearing in this prospectus and the registration statement have been audited by McGladrey & Pullen, LLP, an independent registered public accounting firm, as stated in their report appearing elsewhere herein, and are included in reliance upon such report and upon the authority of such firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of common stock offered by this prospectus. This prospectus, filed as part of the registration statement, does not contain all of the information set forth in the registration statement and its exhibits and schedules, portions of which have been omitted as permitted by the rules and regulations of the SEC. For further information about us and shares of our common stock, we refer you to the registration statement and to its exhibits and schedules. Statements in this prospectus about the contents of any contract, agreement or other document are not necessarily complete and in each instance we refer you to the copy of such contract, agreement or document filed as an exhibit to the registration statement. Anyone may inspect the registration statement and its exhibits and schedules without charge at the public reference facilities the SEC maintains at 100 F Street, N.E., Washington, D.C. 20549. You may obtain copies of all or any part of these materials from the SEC upon the payment of certain fees prescribed by the SEC. You may obtain further information about the operation of the SEC’s Public Reference Room by calling the SEC at 1-800-SEC-0330. You may also inspect these reports and other information without charge at a website maintained by the SEC. The address of this site is http://www.sec.gov.

Upon consummation of this offering, we will become subject to the informational requirements of the Exchange Act and will be required to file reports and other information with the SEC. You will be able to inspect and copy these reports and other information at the public reference facilities maintained by the SEC at the address noted above. You also will be able to obtain copies of this material from the Public Reference Room of the SEC as described above, or inspect them without charge at the SEC’s website. We intend to make available to our common stockholders annual reports containing consolidated financial statements audited by an independent registered public accounting firm.

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INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	F-2
Audited Financial Statements at December 31, 2010 and 2011 and for the years ended December 31, 2009, 2010, and 2011
Consolidated balance sheets	F-3
Consolidated statements of income	F-4
Consolidated statements of stockholders’ equity	F-5
Consolidated statements of cash flows	F-6
Notes to consolidated financial statements	F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Regional Management Corp. and Subsidiaries

We have audited the accompanying consolidated balance sheets of Regional Management Corp. and Subsidiaries as of December 31, 2010 and 2011, and the consolidated statements of income, stockholders’ equity, and cash flows for the years ended December 31, 2009, 2010, and 2011. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Regional Management Corp. and Subsidiaries as of December 31, 2010 and 2011, and the results of their operations and their cash flows for the years ended December 31, 2009, 2010, and 2011 in conformity with U.S. generally accepted accounting principles.

/s/  McGladrey & Pullen, LLP

Raleigh, North Carolina

February 20, 2012

F-2

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2010 AND 2011

	2010			2011
	(Dollars in thousands, except per share information)
Assets
Cash	$	856		$	4,849
Gross finance receivables		318,991			387,494
Less unearned finance charges, insurance premiums and commissions		(71,745	)		(80,900	)
Finance receivables		247,246			306,594
Allowance for loan losses		(18,000	)		(19,300	)
Net finance receivables		229,246			287,294
Premises and equipment, net of accumulated depreciation		3,069			4,446
Deferred tax asset, net		4,376			15
Repossessed assets at net realizable value		296			409
Other assets		3,515			7,137
	$	241,358		$	304,150
Liabilities and Stockholders’ Equity
Liabilities:
Cash overdraft.	$	365		$	1
Accounts payable and accrued expenses		7,968			7,447
Senior revolving credit facility		163,301			206,009
Mezzanine debt to related party		25,814			25,814
Other debt		466			—
Total liabilities		197,914			239,271
Commitments and Contingencies
Temporary equity		12,000			12,000
Stockholders’ equity:
Common stock (25,000,000 shares authorized; 9,336,727 issued and outstanding; $0.10 par value per share)		934			934
Additional paid-in capital		27,959			28,150
Retained earnings		2,551			23,795
Total stockholders’ equity		31,444			52,879
	$	241,358		$	304,150

See Notes to Consolidated Financial Statements.

F-3

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2009, 2010, AND 2011

	2009		2010		2011
	(Dollars in thousands, except per share information)
Revenue:
Interest and fee income	$	63,590	$	74,218	$	91,286
Insurance income, net		5,229		8,252		8,871
Other income		3,995		4,362		5,062
Total revenue		72,814		86,832		105,219
Expenses:
Provision for loan losses		19,405		16,568		17,854
General and administrative expenses:
Personnel		18,991		20,630		25,462
Occupancy		4,538		5,165		6,527
Advertising		1,212		2,027		2,056
Other		4,379		5,703		6,589
Consulting and advisory fees		1,263		1,233		975
Interest expense:
Senior revolving credit facility and other debt		4,846		5,542		8,306
Mezzanine debt:
Third party		3,835		2,915		—
Related parties		—		1,427		4,037
Total interest expense		8,681		9,884		12,343
Total expenses		58,469		61,210		71,806
Income before income taxes		14,345		25,622		33,413
Income taxes		4,472		9,178		12,169
Net income	$	9,873	$	16,444	$	21,244
Earnings per share:
Basic	$	1.06	$	1.76	$	2.28
Diluted	$	1.03	$	1.70	$	2.21
Weighted average shares outstanding:
Basic		9,336,727		9,336,727		9,336,727
Diluted		9,590,564		9,669,618		9,620,967

See Notes to Consolidated Financial Statements.

F-4

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
YEARS ENDED DECEMBER 31, 2009, 2010, AND 2011

			ADDITIONAL		RETAINED
	COMMON		PAID-IN		EARNINGS
	STOCK		CAPITAL		(DEFICIT)			TOTAL
	(Dollars in thousands)
Balance, December 31, 2008	$	934	$	27,239	$	(23,766	)	$	4,407
Stock option expense		—		360		—			360
Net income		—		—		9,873			9,873
Balance, December 31, 2009		934		27,599		(13,893	)		14,640
Stock option expense		—		360		—			360
Net income		—		—		16,444			16,444
Balance, December 31, 2010		934		27,959		2,551			31,444
Stock option expense		—		191		—			191
Net income		—		—		21,244			21,244
Balance, December 31, 2011	$	934	$	28,150	$	23,795		$	52,879

See Notes to Consolidated Financial Statements.

F-5

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2009, 2010, AND 2011

	2009			2010			2011
	(Dollars in thousands)
Cash Flows From Operating Activities
Net income	$	9,873		$	16,444		$	21,244
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		19,405			16,568			17,854
Amortization of stock option expense		360			360			191
Fair value adjustment on interest rate caps		(280	)		843			252
Payment of in-kind interest on mezzanine debt		512			134			—
Deferred income taxes		(98	)		2,930			4,361
Depreciation and amortization		1,144			1,383			1,344
Change in assets and liabilities:
Other assets		182			(198	)		(3,677	)
Other liabilities		134			2,751			(521	)
Net cash provided by operating activities		31,232			41,215			41,048
Cash Flows From Investing Activities
Finance receivables originated		(39,249	)		(49,346	)		(73,371	)
Finance receivables purchased		—			—			(2,531	)
Net increase in restricted cash		(106	)		—			(450	)
Purchase of furniture and equipment		(556	)		(1,210	)		(2,581	)
Purchase of interest rate caps		(800	)		(43	)		—
Net cash used in investing activities		(40,711	)		(50,599	)		(78,933	)
Cash Flows From Financing Activities
Net increase (decrease) in cash overdraft.		(214	)		215			(364	)
Net advances on senior revolving credit facility		11,674			7,015			42,708
Proceeds from issuance of mezzanine debt, related party		—			25,814			—
Payment on mezzanine debt		—			(25,814	)		—
Payments on subordinated debt and other notes, net		(394	)		(8	)		(466	)
Net cash provided by financing activities		11,066			7,222			41,878
Net increase (decrease) in cash		1,587			(2,162	)		3,993
Cash:
Beginning		1,431			3,018			856
Ending	$	3,018		$	856		$	4,849
Supplemental Disclosures of Cash Flow Information
Cash payments for interest
Paid to third parties	$	8,918		$	7,201		$	7,698
Paid to related parties	$	—		$	1,072		$	4,604
Cash payments for income taxes	$	4,844		$	8,461		$	7,587
Supplemental Disclosures of Noncash Financing Activities
Issuance of mezzanine debt in lieu of cash interest payment	$	512		$	134		$	—

See Notes to Consolidated Financial Statements.

F-6

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share information)

Note 1. Nature of Business and Significant Accounting Policies

Nature of business: Regional Management Corp. (the “Company”) was incorporated and began operations in 1987. The Company is engaged in the consumer finance business, offering small installment loans, large installment loans, automobile purchase loans, furniture and appliance purchase loans, related credit insurance, and ancillary products and services. As of December 31, 2011, the Company operates offices in 170 locations in the states of Alabama (14 offices), North Carolina (24 offices), Oklahoma (1 office), South Carolina (69 offices), Tennessee (18 offices), and Texas (44 offices) under the brand names Regional Finance, RMC Financial Services, Anchor Finance, and Sun Finance. The Company opened six, 17, and 36 new offices during the years ended December 31, 2009, 2010, and 2011 respectively.

Principles of consolidation: The consolidated financial statements include the accounts of Regional Management Corp. and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The Company operates through a separate subsidiary in each state.

The accounting and reporting policies of the Company are in accordance with accounting principles generally accepted in the United States of America and conform to general practices within the consumer finance industry.

The following is a description of significant accounting policies used in preparing the financial statements.

Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Material estimates that are particularly susceptible to change relate to the determination of the allowance for loan losses, fair value of stock-based compensation and the valuation of deferred tax assets.

Business segments: The Company reports operating segments in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (ASC) Topic 280. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in determining how to allocate resources and assess performance. FASB ASC Topic 280 requires that a public enterprise report a measure of segment profit or loss, certain specific revenue and expense items, segment assets, information about the way operating segments were determined, and other items.

The Company has one reportable segment, which is the consumer finance business. The other revenue generating activities of the Company, including insurance operations and income tax preparation, are done in the existing branch network in conjunction with or as a complement to the consumer finance operations. There is no discrete financial information available for these activities and they do not meet the criteria under FASB ASC Topic 280 to be reported separately.

Cash and statement of cash flows: Cash flows from loan operations and short-term borrowings are reported on a net basis.

F-7

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

Finance receivables: The Company’s loan portfolio consists of the following (2011 originations):

	AVERAGE SIZE
Small installment loans	$	1.0
Large installment loans	$	3.1
Automobile purchase loans	$	11.7
Furniture and appliance purchase loans	$	1.4

Small installment loan receivables are direct loans to customers and are secured by non-essential household goods and in some instances, an automobile and include live check loans, which are checks mailed to customers based on a rigorous pre-screening process that includes a review of the prospective customer’s credit profile provided by national credit reporting bureaus. Large installment loan receivables are direct loans to customers and are secured by automobiles or other vehicles in addition to non-essential household goods. Automobile purchase loan receivables consist of direct loans, which are originated at the dealership and closed in one of the Company’s branches, and indirect loans, which are originated and closed at a dealership in the Company’s network without the need for the customer to visit one of the Company’s branches. In each case these automobile purchase loans are collateralized primarily by used and new automobiles, which are initiated by and purchased from automobile dealerships, subject to the Company’s credit approval. Furniture and appliance purchase loan receivables consist principally of retail installment sales contracts collateralized by the furniture purchased, which are initiated by and purchased from furniture retailers, subject to the Company’s credit approval.

Loan losses: Provisions for loan losses are charged to income as losses are estimated to have occurred and in amounts sufficient to maintain an allowance for loan losses at an adequate level to provide for losses on the finance receivables. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Loan loss experience, average loan life, and contractual delinquency of finance receivables by loan type, the value of underlying collateral, and management’s judgment are factors used in assessing the overall adequacy of the allowance and the resulting provision for loan losses. While management uses the best information available to make its evaluation, future adjustments to the allowance may be necessary if there are significant changes in economic conditions or portfolio performance. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revisions as more information becomes available.

The Company establishes a full valuation allowance for a loan at the date that the loan is contractually delinquent 180 days. The Company initiates repossession proceedings when an account is seriously delinquent and, in the opinion of management, the customer is unlikely to make further payments. Since 2010, the Company has sold substantially all repossessed vehicle inventory through public sales conducted by independent automobile auction organizations after the required post-repossession waiting period. Vehicles held for sale at the office location are generally taken to an auction if not sold within 90 days of repossession. Losses on the sale of repossessed collateral are charged to the allowance for loan losses.

The allowance for loan losses consists of general and specific components. The general component represents an estimate of loan losses for groups of loans on a collective basis. The Company’s general component of the allowance for loan losses relates to probable incurred losses of unimpaired loans and consists of two computations as follows:

n	The most recent twelve months of historical losses are used to estimate the general allowance for large installment loans (loans in excess of $2.5), automobile purchase loans, and furniture and appliance purchase loans.
n	The most recent eight months of historical losses are used to estimate the general allowance for small installment loans, including live checks (loans of $2.5 or less).

F-8

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

Automobile purchase, furniture and appliance purchase, and large installment loans have longer maturities than small installment loans, which is why a shorter time period is used for small installment loan losses.

The Company adjusts the computed historical loss percentages as described above for qualitative factors based on an assessment of internal and external influences on credit quality that are not fully reflected in the historical loss data. Those qualitative factors include trends in growth in the loan portfolio, delinquency, unemployment, bankruptcy, and other economic trends.

The specific component of the allowance for loan losses relates to impaired loans. The specific component includes a full reserve for accounts that are 180 days or more delinquent on a contractual basis. The specific component also includes an estimate of the loss resulting from the difference between the recorded investment in a loan to a bankrupt customer and the present value of the cash flows of such loans in accordance with the modified loan terms approved by the bankruptcy court discounted at the original contractual interest rate. Loans to bankrupt customers are evaluated in the aggregate rather than on a specific loan basis. Such loans are accounted for as troubled debt restructurings (as described under “Impaired loans” below).

In 2011, the Company began evaluating the loans of customers in Chapter 13 bankruptcy for impairment as troubled debt restructurings. The Company has adopted the policy of aggregating loans with similar risk characteristics for purposes of computing the amount of impairment. In connection with the adoption of this practice, the Company computed the estimated impairment on its Chapter 13 bankrupt loans in the aggregate by discounting the projected cash flows at the original contract rate on the loans using the terms imposed by the bankruptcy court. This method was applied in the aggregate to each of the Company’s four classes of loans.

The Company’s policy for the accounts of customers in bankruptcy is to charge off the balance of accounts in a confirmed bankruptcy under Chapter 7 of the bankruptcy code. For customers in a Chapter 13 bankruptcy plan, the bankruptcy court reduces the interest rate the company can charge as it does for most creditors. Additionally, if the bankruptcy court converts a portion of a loan to an unsecured claim, the Company’s policy is to charge off the portion of the unsecured balance that it deems uncollectible at the time the bankruptcy plan is confirmed. Once the customer is in a confirmed Chapter 13 bankruptcy plan, the Company receives payments with respect to the remaining amount of the loan at the reduced interest rate from the bankruptcy trustee. The Company does not believe that accounts in a confirmed Chapter 13 plan have a higher level of risk than non-bankrupt accounts. If a customer fails to comply with the terms of the bankruptcy order, the Company will petition the trustee to have the customer dismissed from bankruptcy. Upon dismissal, the Company restores the account to the original terms and pursues collection through its normal collection activities.

Impaired loans: A loan is considered impaired by the Company when it is 180 or more days contractually delinquent, at which time a full valuation allowance is established for such loans within the allowance for loan losses. In addition, loans that have been modified by bankruptcy proceedings are accounted for in the aggregate by the Company as troubled debt restructurings and are also considered impaired loans. At the time of restructuring, a specific valuation allowance is established for such loans within the allowance for loan losses.

The factors used to determine whether an account is uncollectible are the age of the account, supervisory review of collection efforts, and other factors such as customers relocating to an area where collection is not practical. As of December 31, 2011, bankrupt accounts that had not been charged-off were approximately $3,130. Such accounts are specifically evaluated for impairment. The Company has elected to evaluate such loans in the aggregate in accordance with FASB ASC Topic 310 as they have common risk characteristics. Of the total $3,130 of bankrupt accounts at December 31, 2011, $272 are more than 180 days contractually delinquent and thus fully reserved. For customers with a confirmed Chapter 13 bankruptcy plan, the Company receives payments through the bankruptcy court. For customers who recently filed for Chapter 13 bankruptcy, the Company generally does not

F-9

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

receive any payments until their bankruptcy plan is confirmed by the court. If the customers have made payments to the trustee in advance of plan confirmation, the Company may receive a lump sum payment from the trustee once the plan is confirmed. This lump sum payment represents the Company’s pro-rata share of the amount paid by the customer. If a customer files for bankruptcy under Chapter 7 of the bankruptcy code, the customer’s entire debt may be cancelled. In such cases, the Company charges off the account upon receiving notice from the bankruptcy court. If a vehicle secures a Chapter 7 bankruptcy account, the customer has the option of buying the vehicle at fair value or reaffirming the loan and continuing to pay the loan.

The remainder of the accounts are those on which operations personnel believe that some portion of the account can be collected. Following is a chart of the maturity of accounts that are 180 days or more past due as of December 31, 2010 and 2011:

	AS OF DECEMBER 31, 2010
	NON-BANKRUPT		CUSTOMERS		TOTAL 180+ PAST DUE
	CUSTOMERS		IN BANKRUPTCY		ACCOUNTS
Accounts at least 180 days but less than one year contractually delinquent	$	709	$	224	$	933
Accounts at least one year but less than two years contractually delinquent		91		82		173
Accounts at least two years contractually delinquent		—		5		5
Total	$	800	$	311	$	1,111

	AS OF DECEMBER 31, 2011
	NON-BANKRUPT		CUSTOMERS		TOTAL 180+ PAST DUE
	CUSTOMERS		IN BANKRUPTCY		ACCOUNTS
Accounts at least 180 days but less than one year contractually delinquent	$	994	$	220	$	1,214
Accounts at least one year but less than two years contractually delinquent		79		41		120
Accounts at least two years contractually delinquent		1		11		12
Total	$	1,074	$	272	$	1,346

Delinquency: The Company determines past due status using the contractual terms of the loan. This is the credit quality indicator used to evaluate the allowance for loan losses for each class of finance receivables.

Repossessed assets: Repossessed collateral is valued at the lower of the receivable balance on the loan prior to repossession or estimated net realizable value. Management estimates net realizable value at the projected cash value upon liquidation, less costs to sell the related collateral.

Premises and equipment: The Company owns its headquarters buildings. During 2010, the Company sold the only branch office that it owned. Offices are leased under non-cancellable leases. Office buildings are depreciated on the straight-line method for financial reporting purposes over their estimated useful lives of 39 to 40 years. Furniture and equipment are depreciated on the straight-line method over their estimated useful lives, generally three to five years. Leasehold improvements are depreciated over the shorter of the life of the asset or the remaining term of the lease agreement. Maintenance and repairs are charged to expense as incurred.

Income recognition: Interest income is recognized using the interest (actuarial) method, also known as the constant yield method. Therefore, the Company recognizes revenue from interest at an equal rate over the term of the loan. Unearned finance charges on pre-compute contracts are rebated to customers utilizing the Rule of 78s method. The

F-10

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

difference between income recognized under the constant yield method and the Rule of 78s method is recognized as an adjustment to interest income at the time of rebate. Accrual of interest income on finance receivables is suspended when no payment has been received for 90 days or more on a contractual basis. The accrual of income is not resumed until one or more full contractual monthly payments are received and the finance receivable is less than 90 days contractually delinquent. Interest income is suspended on finance receivables for which collateral has been repossessed. Payments received on loans in nonaccrual status are first applied to interest, then to any late charges or other fees, with any remaining amount applied to principal.

The Company recognizes income on credit insurance products using the constant yield method over the life of the related loan. Rebates are computed using the Rule of 78s method and any difference between the constant yield method and the Rule of 78s is recognized in income at the time of rebate.

The Company charges a fee to automobile dealers for each loan it purchases from that dealer. The Company defers this fee and accretes it to income using a method that approximates the constant yield method.

Charges for late fees are recognized as income when collected.

Loan origination fees and costs: Non-refundable fees received and direct costs incurred for the origination of finance receivables are deferred and amortized to interest income over the contractual lives of the loans using the constant yield method. Unamortized amounts are recognized in income at the time that loans are paid in full.

Insurance operations: Insurance operations include revenue and expense from the Company’s sale of optional insurance products to its customers. These optional products include credit life, credit accident and health, property insurance, and involuntary unemployment insurance. Insurance premiums are remitted to an unaffiliated insurance company that issues the policy to the customer. This company cedes the premiums to the Company’s wholly-owned insurance subsidiary, RMC Reinsurance, Ltd., who reinsures the unaffiliated insurance company. Life insurance premiums are ceded to the Company as written, non-life products are ceded as earned. The premiums and commissions received by the Company are deferred and amortized to income over the life of the insurance policy using the constant yield method.

Non-file insurance is written in lieu of recording and perfecting the Company’s security interest in the assets pledged on certain loans. Non-file insurance and the related insurance premiums, claims, and recoveries are not reflected in the accompanying financial statements except when claims are incurred. Non-file insurance premiums are collected from the borrower on certain loans at inception and remitted directly to the unaffiliated insurance company.

The Company maintains a cash reserve for life insurance claims in an amount determined by the ceding company. The cash reserve secures a letter of credit issued by a commercial bank in favor of the ceding company. The ceding company maintains the reserves for non-life claims.

Reinsurance is accounted for over the terms of the underlying reinsured policies using assumptions consistent with those used to account for the policies. Following are total net premiums written and reinsured and total earned premiums for the years ended December 31, 2009, 2010, and 2011:

	NET WRITTEN		EARNED
Year Ended December 31,	PREMIUMS		PREMIUMS
2009	$	10,463	$	8,592
2010		12,641		11,845
2011		14,220		13,178

F-11

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

In 2009, the Company began a collateral protection collision insurance (“CPI”) program in one state and in a second state in 2011. CPI is added to a loan when a customer fails to provide the Company proof of collision insurance on an automobile securing a loan. The CPI program is administered by an independent third party, which tracks insurance lapses and cancellations and issues a policy when the customer does not provide proof of insurance. The insurance is added to the loan and increases the customers’ monthly loan payment. The third party and its insurance partner retain a percentage of the premium and pay all claims. The Company earns commissions for selling the insurance and will earn additional commissions if losses are less than estimated by the independent third party. Income is recognized on the constant yield method over the life of the insurance policy, which is generally one year.

Guaranteed Auto Protection: In 2009, the Company began to offer a self-insured Guaranteed Auto Protection (“GAP”) to customers in North Carolina and Alabama. A GAP program is a contractual arrangement whereby the Company forgives the insured customer’s automobile purchase loan if the automobile is determined to be a total loss by the primary insurance carrier and insurance proceeds are not sufficient to pay off the customer’s loan. In 2011, the Company recognized $376 of revenue from this product and recognizes GAP revenue over the life of the loan. Losses are recognized in the period in which they occur.

Interest rate caps: In 2009, the Company purchased three interest rate caps with notional amounts of $10,000 each. The Company purchased the caps to protect a portion of its senior revolving credit facility from increases in interest rates above the strike rate of the cap. In early 2010, the Company exchanged its $30,000 notional cap for a cap with a notional amount of $128,500, a strike rate of 6.0%, and a maturity of March 2014. There was no cost related to this exchange. In late 2010, the Company purchased an additional cap increasing the total interest rate protection to $150,000 on the same terms as the exchanged cap. At December 31, 2011, the caps are based on the three-month LIBOR contract and reimburse the Company for the difference when three-month LIBOR exceeds six percent. The carrying value of the caps, are adjusted to fair value. For the year ended December 31, 2009, the Company recorded a favorable fair value adjustment of $280 as a reduction in interest expense. For the years ended December 31, 2010 and 2011 the Company recorded unfavorable fair value adjustments of $843 and $252, respectively as an increase in interest expense.

Stock-based compensation: The Company has a stock option plan for certain members of management. The Company measures compensation cost for stock-based awards made under this plan at estimated fair value and recognizes compensation expense over the service period for awards expected to vest. All grants are made at 100% of the fair value on the date of the grant. The fair value of stock options is determined using the Black-Scholes valuation model. The Black-Scholes model requires the input of highly subjective assumptions, including expected volatility, risk-free interest rate, and expected life, changes to which can materially affect the fair value estimate. In addition, the estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised. Since the Company’s stock is not publically traded, the performance of the common stock of a publicly traded company whose business is comparable to the Company was used to estimate the volatility of the Company’s stock.

Advertising costs: Advertising costs are expensed as incurred and advertising costs totaled $1,212, $2,027, and $2,056 for the years ended December 31, 2009, 2010, and 2011, respectively.

Income taxes: Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effects of future tax rate changes are recognized in the period when the enactment of new rates occurs.

F-12

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

Interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the consolidated statements of income.

The Company files U.S. federal and various state income tax returns. The Company is generally no longer subject to U.S. federal income tax examinations for years ending before 2009. The Company is generally no longer subject to state and local income tax examinations by taxing authorities before 2008, with the exception of Texas, which is 2007.

The Internal Revenue Service (“IRS”) concluded an examination of the Company’s 2007 and 2008 tax returns in early 2010. The amount assessed by the IRS was not material to the consolidated financial statements.

Earnings per share: Earnings per share has been computed on the basis of the weighted-average number of common shares outstanding during each year presented. Common shares issuable upon the exercise of the stock-based compensation, which are computed using the treasury stock method, are included in the computation of diluted earnings per share.

Government regulation: The Company is subject to various state and federal laws and regulations, which, among other things, impose limits on interest rates, other charges, and insurance premiums and require licensing and qualifications.

Congress recently passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. Among other provisions, the bill created the Consumer Financial Protection Bureau (“CFPB”). The CFPB has the authority to promulgate regulations that could affect the Company’s business. The CFPB has not issued any regulations to date and the Company is not aware of any pending regulations that might affect its business.

Subsequent events: The Company has evaluated its subsequent events (events occurring after December 31, 2011) through February 20, 2012, which represents the date the financial statements were issued.

Disclosure about fair value of financial instruments: The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Finance receivables: Finance receivables are originated either at prevailing market rates or at statutory limits. The Company’s loan portfolio turns approximately 1.2 times per year from cash payments and renewal of loans. Management believes that the carrying value approximates the fair value of its loan portfolio.

Interest rate caps: The fair value of the interest rate caps is the estimated amount the Company would receive to terminate the cap agreements at the reporting date, taking into account current interest rates and the creditworthiness of the counterparty for assets and creditworthiness of the Company for liabilities.

F-13

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

Debt: The Company refinanced its senior revolving credit facility in August 2010 and as a result of the refinancing believes that the fair value of this variable rate debt approximates its carrying value at December 31, 2011. The Company also refinanced its mezzanine debt in August 2010 and estimates that the fixed interest rate on the mezzanine debt exceeds the estimated market interest rate for similar debt, resulting in a fair value in excess of the carrying amount. The Company also considered its creditworthiness in its determination of fair value.

The estimated carrying and fair values of the Company’s financial instruments as of December 31, 2010 and 2011 are as follows:

	2010				2011
	CARRYING		FAIR		CARRYING		FAIR
	AMOUNT		VALUE		AMOUNT		VALUE
Cash	$	856	$	856	$	4,849	$	4,849
Restricted cash		888		888		1,338		1,338
Finance receivables		229,246		229,246		287,294		287,294
Interest rate caps		280		280		28		28
Debt:
Senior revolving credit facility		163,301		163,301		206,009		206,009
Mezzanine		25,814		26,697		25,814		26,428
Other		466		466		—		—

The Company follows the provisions of ASC 820-10. ASC 820-10 applies to all assets and liabilities that are being measured and reported on a fair value basis. ASC 820-10 requires disclosure that establishes a framework for measuring fair value in GAAP, and expands disclosure about fair value measurements. This statement enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The statement requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

Level 1 – Quoted market prices in active markets for identical assets or liabilities.

Level 2 – Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3 – Unobservable inputs that are not corroborated by market data.

In determining the appropriate levels, the Company performs a detailed analysis of the assets and liabilities that are subject to ASC 820-10. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3.

The table below presents the balances of assets measured at fair value on a recurring basis by level within the hierarchy:

	INTEREST RATE CAPS
DECEMBER 31,	TOTAL		LEVEL 1		LEVEL 2		LEVEL 3
2010	$	280	$	—	$	280	$	—
2011		28		—		28		—

F-14

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

The following methods and assumptions were used to estimate the fair value of each asset subject to ASC 820-10 for which it is carried at fair value on a nonrecurring basis:

Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following table presents the assets carried on the balance sheet by level within the hierarchy as of December 31, 2010 and 2011 for which a nonrecurring change in fair value has been recorded during the years ended December 31, 2010 and 2011:

	REPOSSESSED ASSETS
DECEMBER 31,	TOTAL		LEVEL 1		LEVEL 2		LEVEL 3		TOTAL LOSSES
2010	$	296	$	—	$	—	$	296	$	218
2011		409		—		—		409	$	218

Accounting pronouncements issued and adopted: In July 2010, the FASB issued Accounting Standards Update (ASU) 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. ASU 2010-20 requires more robust and disaggregated disclosures about the credit quality of financing receivables and allowances for credit losses, including disclosure about credit quality indicators, past due information and modifications of finance receivables. The disclosures required as of the end of a reporting period and certain items related to activity during the year were adopted in 2010, which significantly expanded the existing disclosure requirements, but did not have any impact on the Company’s consolidated financial position, results of operations, or cash flows. The remaining amendments that require disclosures about activity that occurs during a reporting period are effective for periods beginning on or after December 15, 2010 did not have an impact on the Company’s consolidated financial position, results of operations or cash flows.

In April 2011, the FASB issued ASU 2011-02, Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring. The ASU clarifies which loan modifications constitute troubled debt restructurings. It is intended to assist creditors in determining whether a modification of the terms of a receivable meets the criteria to be considered a troubled debt restructuring, both for purposes of recording an impairment loss and for disclosure of troubled debt restructurings. This ASU is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructurings occurring on or after the beginning of the fiscal year of adoption. The adoption of this guidance did not have a material impact on the Company’s consolidated financial position, results of operations, cash flows, or disclosures.

Accounting pronouncements issued, not yet adopted: In October 2010, the FASB issued ASU 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts. ASU 2010-26 modifies the definitions of the type of costs incurred by insurance entities that can be capitalized in the successful acquisition of new and renewal contracts. ASU 2010-26 requires incremental direct costs of successful contract acquisition as well as certain costs related to underwriting, policy issuance and processing, medical and inspection and sales force contract selling for successful contract acquisition to be capitalized. These incremental direct costs and other costs are those that are essential to the contract transaction and would not have been incurred had the contract transaction not occurred. This guidance is effective for the Company for the year beginning January 1, 2012 and may be applied prospectively or retrospectively. The Company does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial position, results of operations, cash flows, or disclosures.

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement, which aligns disclosures related to fair value between U.S. GAAP and International Financial Reporting Standards. The ASU includes changes to the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and changes to the

F-15

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

disclosure of information about fair value measurements. More specifically, the changes clarify the intent of the FASB regarding the application of existing fair value measurements and disclosures as well as changing some particular principles or requirements for measuring fair value or for disclosing information about fair value measurements. This ASU is effective for interim and annual periods beginning after December 15, 2011. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

Note 2.   Finance Receivables, Credit Quality Information and Allowance for Loan Losses

Finance receivables at December 31, 2010 and 2011 consisted of the following:

	2010		2011
Small installment loans	$	117,599	$	130,257
Large installment loans		33,653		36,938
Automobile purchase loans		93,232		128,660
Furniture and appliance purchase loans		2,762		10,739
Finance receivables	$	247,246	$	306,594

Changes in the allowance for loan losses for the years ended December 31, 2009, 2010, and 2011 are as follows:

	2009			2010			2011
Balance at beginning of year	$	15,665		$	18,441		$	18,000
Provision for loan losses		19,405			16,568(1	)		17,854
Finance receivables charged off		(17,002	)		(17,469	)		(17,147	)
Recoveries		373			460			593
Balance at end of year	$	18,441		$	18,000		$	19,300

⁽¹⁾ Reducing the required allowance for small loans from nine to eight months of losses reduced the 2010 provision by $451.

The following is a reconciliation of the allowance for loan losses by portfolio segment for the year ended December 31, 2010 and 2011:

														ALLOWANCE
														AS
														PERCENTAGE
												FINANCE		OF FINANCE
	BALANCE									BALANCE		RECEIVABLES		RECEIVABLES
	JANUARY 1,				CHARGE-					DECEMBER 31,		DECEMBER 31,		DECEMBER 31,
	2010		PROVISION		OFFS			RECOVERIES		2010		2010		2010
Small installment loans	$	8,083	$	10,664	$	(10,068	)	$	295	$	8,974	$	117,599		7.6	%
Large installment loans		2,719		2,780		(2,588	)		61		2,972		33,653		8.8	%
Automobile purchase loans		7,629		2,915		(4,738	)		103		5,909		93,232		6.3	%
Furniture and appliance purchase loans		10		209		(75	)		1		145		2,762		5.2	%
Total	$	18,441	$	16,568	$	(17,469	)	$	460	$	18,000	$	247,246		7.3	%

F-16

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

														ALLOWANCE AS
														PERCENTAGE OF
												FINANCE		FINANCE
												RECEIVABLES		RECEIVABLES
	BALANCE									BALANCE		BALANCE		BALANCE
	JANUARY 1,				CHARGE-					DECEMBER 31,		DECEMBER 31,		DECEMBER 31,
	2011		PROVISION		OFFS			RECOVERIES		2011		2011		2011
Small installment loans	$	8,974	$	9,998	$	(10,522	)	$	388	$	8,838	$	130,257		6.8	%
Large installment loans		2,972		1,442		(2,042	)		76		2,448		36,938		6.6	%
Automobile purchase loans		5,909		6,014		(4,430	)		125		7,618		128,660		5.9	%
Furniture and applicance purchase loans		145		400		(153	)		4		396		10,739		3.7	%
Total	$	18,000	$	17,854	$	(17,147	)	$	593	$	19,300	$	306,594		6.3	%

As of January 1, 2010, the Company changed its loan loss allowance methodology for small installment loans to determine the allowance using losses from the trailing eight months, rather than the trailing nine months, to more accurately reflect the average life of its small installment loans. The change from nine to eight months of average losses reduced the loss allowance for small installment loans by $1,074 as of January 1, 2010 and reduced the provision for loan losses by $451 for 2010.

Following is a summary of the finance receivables associated with customers in bankruptcy as of December 31, 2010 and 2011:

	FINANCE		FINANCE
	RECEIVABLES IN		RECEIVABLES IN
	BANKRUPTCY		BANKRUPTCY
	AS OF		AS OF
	DECEMBER 31,		DECEMBER 31,
	2010		2011
Small installment loans	$	353	$	352
Large installment loans		559		586
Automobile purchase loans		1,715		2,160
Furniture and appliance purchase loans		35		32
Total	$	2,662	$	3,130

F-17

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

The following is an assessment of the credit quality of finance receivables at December 31, 2010 and 2011. The contractual delinquency of the finance receivable portfolio by portfolio segment at December 31, 2010 and 2011 was:

	DECEMBER 31, 2010
																FURNITURE AND
	SMALL					LARGE					AUTOMOBILE					APPLIANCE
	INSTALLMENT					INSTALLMENT					PURCHASE					PURCHASE
	LOANS					LOANS					LOANS					LOANS					TOTAL
	$		%			$		%			$		%			$		%			$		%
Current accounts	$	90,455		76.9	%	$	22,969		68.3	%	$	67,751		72.7	%	$	2,299		83.2	%	$	183,474		74.2	%
1 to 29 days		18,387		15.7	%		7,424		22.0	%		20,363		21.8	%		342		12.4	%		46,516		18.8	%
Delinquency:
30 to 59 days		3,269		2.8	%		1,486		4.4	%		2,816		3.0	%		40		1.5	%		7,611		3.1	%
60 to 89 days		1,986		1.6	%		762		2.3	%		1,113		1.2	%		31		1.1	%		3,892		1.6	%
90 days and over		3,502		3.0	%		1,012		3.0	%		1,189		1.3	%		50		1.8	%		5,753		2.3	%
Total delinquency		8,757		7.4	%		3,260		9.7	%		5,118		5.5	%		121		4.4	%		17,256		7.0	%
Finance receivables	$	117,599		100.0	%	$	33,653		100.0	%	$	93,232		100.0	%	$	2,762		100.0	%	$	247,246		100.0	%
Finance receivables in nonaccrual status	$	3,502		3.0	%	$	1,012		3.0	%	$	1,189		1.3	%	$	50		1.8	%	$	5,753		2.3	%

	DECEMBER 31, 2011
																FURNITURE
																AND
	SMALL					LARGE					AUTOMOBILE					APPLIANCE
	INSTALLMENT					INSTALLMENT					PURCHASE					PURCHASE
	LOANS					LOANS					LOANS					LOANS					TOTAL
	$		%			$		%			$		%			$		%			$		%
Current	$	97,240		74.7	%	$	25,787		69.8	%	$	91,947		71.5	%	$	9,101		84.7	%	$	224,075		73.0	%
1 to 29 days delinquent		22,784		17.5	%		8,202		22.2	%		30,376		23.6	%		1,313		12.2	%		62,675		20.5	%
Delinquent accounts
30 to 59 days		4,084		3.1	%		1,484		4.0	%		3,962		3.1	%		146		1.4	%		9,676		3.2	%
60 to 89 days		3,002		2.3	%		686		1.9	%		1,185		0.9	%		75		0.7	%		4,948		1.6	%
90 days and over		3,147		2.4	%		779		2.1	%		1,190		0.9	%		104		1.0	%		5,220		1.7	%
Total delinquency	$	10,233		7.8	%	$	2,949		8.0	%	$	6,337		4.9	%	$	325		3.1	%	$	19,844		6.5	%
Finance receivables	$	130,257		100.0	%	$	36,938		100.0	%	$	128,660		100.0	%	$	10,739		100.0	%	$	306,594		100.0	%
Finance receivables in nonaccrual status	$	3,147		2.4	%	$	779		2.1	%	$	1,190		0.9	%	$	104		1.0	%	$	5,220		1.7	%

F-18

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

Following is a summary of finance receivables evaluated for impairment:

	DECEMBER 31,		DECEMBER 31,
	2010		2011
Finance receivables evaluated for impairment
Accounts 180 or more days past due, excluding accounts of customers in bankruptcy	$	800	$	1,074
Customers in Chapter 13 bankruptcy		2,662		3,130
Total impaired accounts specifically evaluated	$	3,462	$	4,204
Finance receivables evaluated collectively		243,784		302,390
Finance receivables outstanding	$	247,246	$	306,594
Accounts in bankruptcy in nonaccrual status	$	683	$	783

	DECEMBER 31,		DECEMBER 31,
	2010		2011
Total impaired accounts specifically evaluated	$	3,462	$	4,204
Amount of the specific reserve for impaired accounts	$	1,874	$	2,187
Finance receivables evaluated collectively	$	243,784	$	302,390
Amount of general component of the allowance	$	16,126	$	17,113

Total carrying value and recorded investment of total impaired accounts specifically evaluated are $3,462 and $4,204 at December 31, 2010 and 2011, respectively.

It is not practical to compute the amount of interest earned on impaired loans.

Note 3. Premises and Equipment and Rental Commitments

At December 31, 2010 and 2011, premises and equipment consisted of the following:

	2010		2011
Land and premises	$	844	$	847
Furniture, fixtures, and equipment		7,807		10,107
Leasehold improvements		1,289		1,565
		9,940		12,519
Less accumulated depreciation		6,871		8,073
	$	3,069	$	4,446

Depreciation expense for the years ended December 31, 2009, 2010, and 2011 totaled $797, $953, and $1,204, respectively.

F-19

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

Future minimum rent commitments under non-cancellable operating leases in effect as of December 31, 2011 are as follows:

YEAR ENDING DECEMBER 31,	AMOUNT
2012	$	2,243
2013		1,384
2014		511
2015		111
2016		54
Thereafter		1
	$	4,304

Leases generally contain options to extend for periods from 1 to 10 years; the cost of such extensions is not included above. Rent expense for the years ended December 31, 2009, 2010, and 2011 totaled $1,868, $2,073, and $2,607, respectively. In addition to rent, the Company typically pays for all operating expenses, property taxes, and repairs and maintenance on properties that it leases.

Note 4. Other Assets

Other assets include the following at December 31, 2010 and 2011:

	2010		2011
Interest receivable	$	792	$	942
Intangible assets, including debt issuance costs, net of accumulated amortization		808		960
Interest rate caps		280		28
Restricted cash		888		1,338
Prepaid expenses		324		733
Capitalized costs of initial public offering		—		2,567
Other		423		569
	$	3,515	$	7,137

The estimated future amortization of intangible assets equals $228, $91, and $0 for the years ending December 31, 2012, 2013, and 2014 respectively.

F-20

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

Note 5. Debt

Following is a summary of the Company’s debt as of December 31, 2010 and 2011:

	2010		2011
Senior revolving credit facility	$	163,301	$	206,009
Mezzanine debt		25,814		25,814
Secured line of credit		466		—
	$	189,581	$	231,823
Unused amount of senior revolving credit facility, subject to borrowing base	$	61,699	$	18,991
Unused amount of senior revolving credit facility, subject to borrowing base after increase in line of credit described below	$	—	$	48,991

The senior revolving credit facility consisted of senior secured maximum available borrowings totaling $225,000 at both December 31, 2010 and 2011. The Company renewed and increased the senior revolving credit facility in August 2010. The new senior revolving credit facility bears interest at rates equal to LIBOR plus an applicable margin (3.25% at December 31, 2010 and 2011) which varies based on a borrowing base ratio (with a LIBOR minimum of 1.0%) or the prime rate plus 2.25% as elected by the Company. The Company also pays an unused line fee of .50% per annum, payable monthly. Interest payments are due monthly and the agreement expires August 25, 2013. Advances on this agreement are at 85% of eligible finance receivables. The senior revolving credit facility is secured by substantially all of the Company’s finance receivables. The senior revolving credit facility agreement contains certain restrictive covenants, including maintenance of a specified interest coverage ratio, restrictions on distributions, limitations on additional borrowings, debt ratio, maintenance of a minimum allowance for loan losses, and certain other restrictions. At December 31, 2011, the Company was in compliance with all debt covenants. On January 18, 2012, the Company increased the senior revolving credit facility to $255,000 and extended the maturity date to January 18, 2015.

As of December 31, 2011, the mezzanine debt was a $25,814 loan from one of the Company’s sponsors and three individual owners maturing October 25, 2013, secured by a junior lien on substantially all of the Company’s finance receivables. This agreement is subordinated to the senior bank debt. The proceeds of this debt were used to retire the mezzanine debt of the same amount to an unrelated lender. The interest rate is 15.25% per annum, of which 2% is payable in kind at the Company’s option. Through the date of the refinancing, the Company deferred $814 in interest payments to the unrelated lender. The mezzanine loan agreement contains certain restrictive covenants, including maintenance of a specified interest coverage ratio, a restriction on distributions, limitations on additional borrowings, debt ratio, maintenance of a minimum allowance for loan losses, and certain other restrictions. At December 31, 2011, the Company was in compliance with all debt covenants. In connection with increasing the senior revolving credit facility and extending its maturity date, the maturity date of the mezzanine debt was extended to March 31, 2015, subsequent to year-end.

The Company has a $500 line of credit, which is secured by a mortgage on the Company’s headquarters, with a commercial bank to facilitate its cash management program. The interest rate is prime plus 1% and interest is payable monthly. The line of credit matures January 31, 2012 and there are no significant restrictive covenants associated with this line of credit. On January 18, 2012, the line of credit was increased to $1,500 and the maturity date extended to January 18, 2015.

The one-month LIBOR was 0.25% at December 31, 2010 and 2011, although under the senior revolving credit facility the minimum LIBOR rate is 1.0%. The prime rate was 3.25% at December 31, 2010 and 2011.

F-21

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

Following is a summary of principal payments required on outstanding debt during each of the next 5 years:

YEAR ENDING DECEMBER 31,	AMOUNT
2012	$	—
2013		231,823
2014		—
2015		—
2016		—
Total	$	231,823

The maturity dates of the loan agreements were extended to 2015 after year-end.

Note 6. Temporary Equity

The shareholders agreement between the Company, Regional Holdings LLC, the sponsors and the individual owners provides that the individual owners have the right to put their stock back to the Company if an initial public offering does not occur within five years of the acquisition date, March 21, 2007. The put option is exercisable for 90 days following March 21, 2012. The purchase price of the stock upon exercise of the option is the then fair value, and the option is subject to contingencies, principally failure to complete an initial public offering and approval of the senior lender. The Company valued this put option at the original purchase price of $12,000. The proposed initial public offering makes it probable that the put option will not become exercisable. There are 2,196,877 shares owned by the individual owners.

F-22

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

Note 7. Income Taxes

Regional Management Corp.  and its subsidiaries file a consolidated federal income tax return. The Company files consolidated or separate state income tax returns as permitted by individual states in which it operates.

Income tax expense was $4,472, $9,178, and $12,169 for the years ended December 31, 2009, 2010, and 2011, respectively, which differed from the amount computed by applying the U.S. federal income tax rate of 34% for the year ended December 31, 2009, and 35% for the years ended December 31, 2010 and 2011 to total income before income taxes as a result of the following:

	2009			2010			2011
U. S. federal tax expense at statutory rate	$	4,877		$	8,968		$	11,695
Increase (reduction) in income taxes resulting from:
Small insurance company income exclusion		(583	)		(444	)		(511	)
State tax, net of federal benefit		360			569			774
Other		(182	)		85			211
	$	4,472		$	9,178		$	12,169

Income tax expense attributable to total income before income taxes consists of the following for the years ended December 31, 2009, 2010, and 2011:

	2009			2010		2011
Current:
U. S. federal	$	4,024		$	5,732	$	7,133
State and local		546			516		675
		4,570			6,248		7,808
Deferred:
U. S. federal		(83	)		2,553		3,828
State and local		(15	)		377		533
		(98	)		2,930		4,361
Total	$	4,472		$	9,178	$	12,169

F-23

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

Net deferred tax assets consist of the following as of December 31, 2010 and 2011:

	2010		2011
Deferred tax assets:
Allowance for loan losses	$	6,587	$	7,002
Unearned insurance commissions		1,172		1,191
Non-refundable dealer fees		813		1,022
Stock-based compensation		636		711
Fair value adjustment on interest rate cap		329		142
Amortization of non-compete		227		195
Group insurance reserve		135		23
Accrued expenses		255		230
Unearned insurance premium reserves		63		—
Gross deferred tax assets		10,217		10,516
Deferred tax liabilities:
Fair market value adjustment of finance receivables		4,394		7,878
Deferred loan costs		1,161		1,272
Tax over book depreciation		66		926
Prepaid expenses		126		286
Other		94		139
Gross deferred tax liabilities		5,841		10,501
Net deferred tax assets	$	4,376	$	15

Note 8. Earnings Per Share

The following schedule reconciles the computation of basic and diluted earnings per share for the years ended December 31, 2009, 2010, and 2011:

	2009
	NET INCOME		SHARES		PER SHARE
Basic earnings per share
Income available to common stockholders	$	9,873		9,336,727	$	1.06
Effect of dilutive securities
Options to purchase common stock		—		253,837		—
Diluted earnings per share
Income available to common stockholders plus assumed exercise of options to purchase common stock	$	9,873		9,590,564	$	1.03

F-24

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

	2010
	NET INCOME		SHARES		PER SHARE
Basic earnings per share
Income available to common stockholders	$	16,444		9,336,727	$	1.76
Effect of dilutive securities
Options to purchase common stock		—		332,891		—
Diluted earnings per share
Income available to common stockholders plus assumed exercise of options to purchase common stock	$	16,444		9,669,618	$	1.70

	2011
	NET INCOME		SHARES		PER SHARE
Basic earnings per share
Income available to common stockholders	$	21,244		9,336,727	$	2.28
Effect of dilutive securities
Options to purchase common stock		—		284,240		—
Diluted earnings per share
Income available to common stockholders plus assumed exercise of options to purchase common stock	$	21,244		9,620,967	$	2.21

Note 9. Related Party Transactions

The Company is majority owned by two sponsors. Following is a summary of transactions during the years ended December 31, 2009, 2010, and 2011 with the sponsors and the individual owners who retain an interest in the Company.

	INDIVIDUAL
	OWNERS		SPONSORS
2009:
Consulting and advisory fees expense	$	454	$	809
2010:
Issuance of 15.25% mezzanine debt		5,000		20,814
Financing fees		20		83
Interest expense on mezzanine debt		273		1,137
Consulting and advisory fees expense		450		783
2011:
Interest expense on mezzanine debt		772		3,491
Consulting and advisory fees expense		450		525

F-25

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

Note 10. Concentrations of Credit Risk

The Company’s portfolio of finance receivables is with customers living in four southeastern states (Alabama, North Carolina, South Carolina, and Tennessee) and two southwestern states (Oklahoma and Texas); consequently, such customers’ ability to honor their installment contracts may be affected by economic conditions in these areas. Additionally, the Company is exposed to a concentration of credit risk inherent in providing consumer finance products to borrowers who cannot obtain traditional bank financing. A majority of the Company’s loans are secured by household goods or automobiles and the Company believes it has access to this collateral through repossession. The ability to repossess collateral mitigates this risk; however, as a matter of practice the Company does not generally repossess household goods collateral.

The Company also has a risk that its customers will seek protection from creditors by filing under the bankruptcy laws. When a customer files for bankruptcy protection, the Company must cease collection efforts and petition the bankruptcy court to obtain its collateral or work out a court approved bankruptcy plan involving the Company and all other creditors of the customer. It is the Company’s experience that such plans can take an extended period of time to conclude and usually involve a reduction in the interest rate from the rate in the contract to a court-approved rate.

Note 11. Employee Benefit Plans

Retirement savings plan: The Company has a defined contribution employee benefit plan (401(k) plan) covering full-time employees who have at least one year of service. Employees can invest up to $16.5 ($22.0 if over age 50) of their gross pay; the Company makes a matching contribution equal to 100 percent of the first three percent of an employee’s gross income and 50 percent of the next two percent of gross income in 2011. In 2009 and 2010, employee contributions were equal to 50 percent of the first six percent of an employee’s gross income contributed to the plan. In 2011, the Company adopted a safe-harbor plan and as such the matching contribution is not discretionary. In prior years, the Company’s matching contribution was discretionary and subject to approval of the Compensation Committee. For the years ended December 31, 2009, 2010, and 2011, the Company recorded expense for the Company’s match of $122, $29, and $271, respectively.

Health insurance plan: Prior to May 1, 2011, the Company had a self-insured health plan available to all full-time salaried employees after one month of service. At the beginning of each plan year, the Company estimated the total cost of health insurance for the forthcoming year, allocated a portion of the cost to plan participants, and paid the balance of the cost. The Company had insurance to protect against claims in excess individual and aggregate amounts. Effective May 1, 2011, the Company adopted a fully insured health insurance plan. The per employee cost is fixed for the plan year ending April 30, 2012. Employees pay a portion of the cost and the Company pays the balance. The Company’s expense for the years ended December 31, 2009, 2010, and 2011 was $1,479, $1,223, and $1,432, respectively.

Effective with the plan year beginning May 1, 2008, the Company began offering a “mini-med” insurance plan for newly hired hourly employees and hourly employees not then participating in the self-insured plan. A portion of the premium is paid by the employee and the balance by the Company. The insurance company bears all risk of loss on this policy.

Discretionary bonuses: The Company pays discretionary bonuses to certain of its officers. The amount of bonuses charged to operating expenses was $423, $675, and, $660 for the years ended December 31, 2009, 2010, and 2011, respectively. Bonus payments are subject to approval by the compensation committee.

Stock compensation plan: On March 21, 2007, the Company adopted the 2007 Management Incentive Plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant options to purchase a maximum of

F-26

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

1.037 million shares of its $.10 par value common stock. All grants are made at 100% of the fair value at the date of grant. Options granted under the plan vest at 20 percent at the date of grant and 20 percent on the anniversary date of the grant each year thereafter for four years. In addition, these options vest and become exercisable in full upon the occurrence of a Change of Control (as defined in the Option Award Agreements). Optionees must exercise their options within ten and nine years of the grant, for the 2007 and 2008 grants, respectively. No options were granted in 2009, 2010, or 2011.

The Company recognizes compensation expense in the financial statements for all stock-based payments granted based upon the fair value estimated in accordance with the provisions of the Codification.

The fair value of option grants is estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions:

	2007			2008
Expected volatility		37.48	%		37.48	%
Expected dividends		0.00	%		0.00	%
Expected term (in years)		10.00			9.00
Risk-free rate		4.50	%		3.77	%
Vesting period (in years)		4			4

Expected volatility is based on the historic volatility of a publicly traded company in the same industry. The risk free interest rate is based on the U.S. Treasury yield at the date the Board approved the option awards for the period (9 to 10 years) over which options are exercisable.

For the years ended December 31, 2009, 2010, and 2011, the Company recorded stock-based compensation expense in the amount of $360, $360, and $191, respectively. As of December 31, 2011, unrecognized stock-based compensation expense to be recognized over future periods approximated $24.3. This amount will be recognized as expense over a period of 0.3 years. The total income tax benefit recognized in the income statement for the stock-based compensation arrangements was $140.3, $140.3, and $74.2 for the years ended December 31, 2009, 2010, and 2011, respectively.

A summary of the status of the Company’s stock option plan is presented below (shares in thousands):

					WEIGHTED
			WEIGHTED		AVERAGE
			AVERAGE		REMAINING		AGGREGATE
	NUMBER OF		PRICE		CONTRACTUAL		INTRINSIC
	SHARES		PER SHARE		LIFE (YEARS)		VALUE
Options outstanding at January 1, 2011		590	$	5.4623
Granted		—		—
Exercised		—		—
Forfeited		—		—
Options outstanding at December 31, 2011		590	$	5.4623		5.3	$	7,983
Options exercisable at December 31, 2011		545	$	5.4623		5.3	$	7,385
Available for grant at December 31, 2011		448

At December 31, 2011, the options have a weighted-average remaining contractual life of 5.3 years.

F-27

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

The intrinsic value was estimated by applying the Company’s operating metrics to those of a publicly traded company in the same industry.

Information on the vesting status of options outstanding at December 31, 2010 and 2011, respectively, follows (shares in thousands):

	2010					2011
				WEIGHTED					WEIGHTED
				AVERAGE					AVERAGE
				GRANT DATE					GRANT DATE
	SHARES			FAIR VALUE		SHARES			FAIR VALUE
Non-vested options, beginning of the year		281		$	5.4623		163		$	5.4623
Granted		—			5.4623		—			5.4623
Vested		(118	)		5.4623		(118	)		5.4623
Forfeited		—			5.4623		—			5.4623
Non-vested options, end of the year		163		$	5.4623		45		$	5.4623

Employment agreements: The Company has employment contracts with two members of senior management and an employment letter agreement with a third employee. These contracts and agreement stipulate the payment of salary, bonus, perquisites, and stock option awards to the affected individuals.

The Company has consulting agreements with three of its individual owners. Consulting fees paid totaled $453.5, $450.0, and $450.0, for the years ended December 31, 2009, 2010, and, 2011, respectively.

Note 12. Commitments and Contingencies

The Company is a defendant in various pending or threatened lawsuits. These matters are subject to various legal proceedings in the ordinary course of business. Each of these matters is subject to various uncertainties and some of them may have an unfavorable outcome to the Company. The Company has established accruals for the matters that are probable and reasonably estimable. The Company is not party to any legal proceedings that management believes would have a material adverse effect on the Company’s consolidated financial statements.

Note 13. Restricted Assets

RMC Reinsurance, Ltd. is a wholly-owned life insurance subsidiary of the Company. RMC Reinsurance is required to maintain cash reserves against life insurance policies ceded to it, as determined by the ceding company. In 2009, the Company purchased a letter of credit in the amount of $888 in favor of the ceding company. The letter of credit is secured by a cash deposit of $888. In 2011, the Company increased the letter of credit and cash deposit by $450 to $1,338. The cash securing the letter of credit is presented as restricted cash in the other asset category in the accompanying balance sheets, which totaled $888 and $1,338 at December 31, 2010 and 2011, respectively.

Note 14. Interest Rate Caps

On April 9, 2009 the Company purchased interest rate caps with a notional amount of $30,000, a strike rate of 3.0%, and equal maturities in April 2013, 2014, and 2015. On March 4, 2010, the Company exchanged its $30,000 of interest rate caps for a rate cap with a notional amount of $128,500, a strike rate of 6.0%, and a maturity of March 4, 2014. There was no cost associated with this exchange.

F-28

REGIONAL MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in thousands, except per share information)

On November 5, 2010, the Company purchased an additional interest rate cap of $21,500, increasing its interest rate coverage to $150,000. The strike rate and maturity of this latter purchase are the same as the cap purchased on March 4, 2010.

Following is a summary of changes in the rate caps:

	2010			2011
Balance at end of prior year	$	1,080		$	280
Purchases		43			—
Fair value adjustment included as an (increase) decrease in interest expense		(843	)		(252	)
Balance sheet at December 31, included in other assets	$	280		$	28

When three-month LIBOR exceeds six percent, the counter party reimburses the Company for the excess over six percent; no payment is required by the Company or the counterparty when three-month LIBOR is below six percent.

Note 15. Acquisition

During 2011, the Company purchased 15 new branch locations. Following is a summary of the transactions:

Branches purchased		15
Merged into existing branches		12
New branch locations		3
Total purchase price	$	2,798
Net loans	$	2,531
Premises and equipment		23
Other		5
	$	2,559
Excess of purchase price over net tangible assets acquired	$	239
Allocation of excess purchase price
Customer lists	$	239

The Company evaluates each acquisition in accordance with FASB ASC Topic 805-10 to determine if a branch acquisition meets the definition of a business combination. The Company accounts for a transaction as a business combination if it assumes the lease, retains the location as a new branch, and offers employment to the existing employees; all other transactions are accounted for as the purchase of assets. All branches acquired in 2011 were purchased from independent third parties with the exception of one small office previously owned by a Company employee.

The purchase price for assets acquired in transactions accounted for as the acquisition of a business is allocated to the estimated fair value of the tangible and intangible assets acquired.

The Company records acquired loans at face value. Management believes that the face value of the loans acquired in 2011 approximates fair value as the interest rate and terms of the loans are similar to loans originated by the Company, which are normally at the maximum rate permitted by the state in which the transaction occurs. Premises

F-29

and equipment are valued at the mutually agreed upon purchase price, which management believes approximate fair value.

Note 16. Subsequent Events

On January 20, 2012, the Company purchased the assets of two consumer loan companies in the state of Alabama. With this purchase, the Company acquired approximately $28 million of consumer loans in 23 branches. The Company expects to consolidate four of these branches into existing Regional locations, which will bring the total number of branches in Alabama to 33. The loans the Company acquired are similar to those of the Company in maturity and loan size and will be primarily classified as large installment loans (installment loans with an original balance over $2.5) in the Company’s financial statements. Management is evaluating the purchase transaction and has not determined the allocation of the purchase price among the tangible and intangible assets.

On January 18, 2012, the Company increased the Senior Revolving Credit Facility to $255,000 from $225,000 and extended the due date to January 18, 2015. At the same time, the Company extended the maturity date of the mezzanine debt to March 31, 2015 and increased the $500 line of credit to $1,500 with a maturity date of January 18, 2015. See Note 5, Debt.

F-30

“Your Hometown Credit Source”

           Shares

Common Stock

PRELIMINARY PROSPECTUS

Jefferies

Stephens Inc.

JMP Securities

BMO Capital Markets

          , 2012

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth the expenses payable by the Registrant in connection with the issuance and distribution of the shares of common stock being registered hereby. All of such expenses are estimates, other than the filing and listing fees payable to the Securities and Exchange Commission, the Financial Industry Regulatory Authority and the New York Stock Exchange.

Filing Fee – Securities and Exchange Commission	$	11,460
Fee – Financial Industry Regulatory Authority, Inc.		10,500
Listing Fee – New York Stock Exchange			*
Fees and Expenses of Counsel			*
Printing Expenses			*
Fees and Expenses of Accountants			*
Miscellaneous Expenses			*
Total	$		*

*  To be provided by amendment.

Item 14. Indemnification of Directors and Officers.

Section 102(b)(7) of the DGCL allows a corporation to provide in its certificate of incorporation that a director of the corporation will not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except where the director breached the duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit. Our amended and restated certificate of incorporation will provide for this limitation of liability.

Section 145 of the DGCL, or Section 145, provides that a Delaware corporation may indemnify any person who was, is or is threatened to be made, party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person is or was an officer, director, employee or agent of such corporation or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’s best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was illegal. A Delaware corporation may indemnify any persons who were or are a party to any threatened, pending or completed action or suit by or in the right of the corporation by reasons of the fact that such person is or was a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, provided such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’s best interests, provided that no indemnification is permitted without judicial approval if the officer, director, employee or agent is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses which such officer or director has actually and reasonably incurred.

Section 145 further authorizes a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his or her status as such, whether or not the corporation would otherwise have the power to indemnify him under Section 145.

II-1

Our amended and restated bylaws will provide that we must indemnify our directors and officers to the fullest extent authorized by the DGCL and must also pay expenses incurred in defending any such proceeding in advance of its final disposition upon delivery of an undertaking, by or on behalf of an indemnified person, to repay all amounts so advanced if it should be determined ultimately that such person is not entitled to be indemnified under this section or otherwise.

The indemnification rights set forth above shall not be exclusive of any other right which an indemnified person may have or hereafter acquire under any statute, provision of our amended and restated certificate of incorporation, our amended and restated bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

We expect to maintain standard policies of insurance that provide coverage (1) to our directors and officers against loss rising from claims made by reason of breach of duty or other wrongful act and (2) to us with respect to indemnification payments that we may make to such directors and officers.

The proposed form of Underwriting Agreement filed as Exhibit 1.1 to this Registration Statement provides for indemnification to our directors and officers by the underwriters against certain liabilities.

Item 15. Recent Sales of Unregistered Securities.

None.

Item 16. Exhibits and Financial Statement Schedules.

(a)   Exhibit Index

1	.1	Form of Underwriting Agreement
3	.1	Form of Amended and Restated Certificate of Incorporation of the Registrant*
3	.2	Form of Amended and Restated Bylaws of the Registrant*
5	.1	Opinion of Simpson Thacher & Bartlett LLP regarding validity of the shares of common stock registered**
5	.2	Opinion of Womble Carlyle Sandridge & Rice LLP**
10	.1	Form of Amended and Restated Shareholders Agreement*
10	.2	Fourth Amended and Restated Loan and Security Agreement, dated as of January 18, 2012, among the lenders named therein, Bank of America, N.A., as the agent, and the Registrant, Regional Finance Corporation of South Carolina, Regional Finance Corporation of Georgia, Regional Finance Corporation of Texas, Regional Finance Corporation of North Carolina, Regional Finance Corporation of Alabama and Regional Finance Corporation of Tennessee, as borrowers
10	.3.1	Senior Subordinated Loan and Security Agreement, dated as of August 25, 2010, by and among the lenders named therein, Palladium Capital Management III, L.L.C., as the agent, and the Registrant, Regional Finance Corporation of South Carolina, Regional Finance Corporation of Georgia, Regional Finance Corporation of Texas, Regional Finance Corporation of North Carolina, Regional Finance Corporation of Alabama and Regional Finance Corporation of Tennessee*
10	.3.2	First Amendment and Extension to Senior Subordinated Loan and Security Agreement dated as of January 18, 2012 the lenders named therein, Palladium Capital Management III, L.L.C., as the agent, and the Registrant, Regional Finance Corporation of South Carolina, Regional Finance Corporation of Georgia, Regional Finance Corporation of Texas, Regional Finance Corporation of North Carolina, Regional Finance Corporation of Alabama and Regional Finance Corporation of Tennessee
10	.4	Regional Management Corp. 2007 Management Incentive Plan*
10	.5	Form of Regional Management Corp. 2011 Stock Incentive Plan and Forms of Nonqualified Stock Option Agreement*
10	.6	Form of Regional Management Corp. Annual Incentive Plan*
10	.7	Option Award Agreement with Robert D. Barry, dated as of October 11, 2007*
10	.8	Option Award Agreement with Thomas F. Fortin, dated February 26, 2008*
10	.9	Option Award Agreement with Robert D. Barry, effective as of April 23, 2008*
10	.10	Option Award Agreement with C. Glynn Quattlebaum, dated as of October 11, 2007*
10	.11	Employment Agreement, dated as of March 21, 2007, between C. Glynn Quattlebaum and the Registrant; First Amendment, dated as of July 18, 2008; Second Amendment, dated effective as of January 1, 2009; Third Amendment, dated as of April 13, 2010; and Fourth Amendment, dated as of May 17, 2011*
10	.12	Employment Agreement, dated as of February 29, 2008, between the Registrant and Thomas F. Fortin; First Amendment to Employment Agreement between the Registrant and Thomas F. Fortin, dated as of July 18, 2008; Second Amendment, dated effective as of January 1, 2009; Third Amendment, dated as of April 13, 2010; and Fourth Amendment, dated as of May 17, 2011*

II-2

10	.13	Letter agreement, dated as of July 1, 2008, between the Registrant and Robert D. Barry; the letter agreement, dated as of April 13, 2010; and the letter agreement, dated as of May 17, 2011*
21	.1	Subsidiaries of the Registrant*
23	.1	Consent of McGladrey & Pullen, LLP
23	.2	Consent of Simpson Thacher & Bartlett LLP (included as part of Exhibit 5.1)**
23	.3	Consent of Roel C. Campos to be named as a director nominee*
23	.4	Consent of Alvaro G. de Molina to be named as a director nominee*
23	.5	Consent of Thomas F. Fortin to be named as a director nominee*
23	.6	Consent of Carlos Palomares to be named as a director nominee*
23	.7	Consent of Womble Carlyle Sandridge & Rice LLP (included as part of Exhibit 5.2)**
24	.1	Power of Attorney (included on signature page to this Registration Statement)*

*  Previously filed.

**  To be filed by amendment.

(b)   Financial Statement Schedule

None. Financial statement schedules have been omitted since the required information is included in our consolidated financial statements contained elsewhere in this registration statement.

ITEM 17. Undertakings.

(1)	The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.
(2)	Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(3)	The undersigned Registrant hereby undertakes that:

(A)

For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(B)

For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Greenville, South Carolina, on the 2^nd day of March, 2012.

Regional Management Corp.

By:  /s/  Thomas F. Fortin

Name:    Thomas F. Fortin

Title:  Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities indicated on the 2^nd day of March, 2012.

Signature	Title
* David Perez	Chairman of the Board of Directors
* Richard T. Dell’Aquila	Director
* Richard A. Godley	Director
* Jared L. Johnson	Director
* Erik A. Scott	Director
/s/  Thomas F. Fortin Thomas F. Fortin	Chief Executive Officer (principal executive officer)
* Robert D. Barry	Executive Vice President and Chief Financial Officer (principal financial and accounting officer)

*By:  /s/  Thomas F. Fortin

Name: Thomas F. Fortin

Title:   Attorney in Fact

II-4

EX-1.1

Exhibit 1.1

SHARES

REGIONAL MANAGEMENT CORP.

COMMON STOCK, PAR VALUE $0.10 PER SHARE

UNDERWRITING AGREEMENT

, 2012

JEFFERIES & COMPANY, INC.
As Representative of the several Underwriters
c/o JEFFERIES & COMPANY, INC.
520 Madison Avenue
New York, New York 10022

Ladies and Gentlemen:

     Introductory. Regional Management Corp., a Delaware corporation (the “Company”), proposes to issue and sell to the several underwriters named in Schedule A (the “Underwriters”) an aggregate of            shares of its common stock, par value $0.10 per share (the “Shares”); and the stockholders of the Company named in Schedule B (collectively, the “Selling Stockholders”) severally propose to sell to the Underwriters an aggregate of             Shares. The             Shares to be sold by the Company and the            Shares to be sold by the Selling Stockholders are collectively called the “Firm Shares.” In addition, the Selling Stockholders have severally granted to the Underwriters an option to purchase up to an additional            Shares, with each Selling Stockholder selling up to the amount set forth opposite such Selling Stockholder’s name in Schedule B, all as provided in Section 2. The additional Shares to be sold by the Selling Stockholders pursuant to such option are collectively called the “Optional Shares.” The Firm Shares and, if and to the extent such option is exercised, the Optional Shares are collectively called the “Offered Shares.” Jefferies & Company, Inc. (“Jefferies”) has agreed to act as Representative of the several Underwriters (in such capacity, the “Representative”) in connection with the offering and sale of the Offered Shares.

     The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1 (File No. 333-174245), which contains a form of prospectus to be used in connection with the public offering and sale of the Offered Shares. Such registration statement, as amended, including the financial statements, exhibits and schedules thereto, in the form in which it was declared effective by the Commission under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (collectively, the “Securities Act”), including any information deemed to be a part thereof at the time of effectiveness pursuant to Rule 430A under the Securities Act, is called the “Registration Statement.” Any registration statement filed by the Company pursuant to Rule 462(b) under the Securities Act is called the “Rule 462(b) Registration Statement,” and from and after the date and time of filing of the Rule 462(b) Registration Statement the term “Registration Statement” shall include the Rule 462(b) Registration Statement. Such prospectus, in the form first used by

the Underwriters to confirm sales of the Offered Shares or in the form first made available to the Underwriters by the Company to meet requests of purchasers pursuant to Rule 173 under the Securities Act, is called the “Prospectus.” As used herein, “Applicable Time” is            a.m. (New York time) on      , 2012. As used herein, “free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act, and “Time of Sale Prospectus” means the preliminary prospectus, as amended or supplemented immediately prior to the Applicable Time, together with the free writing prospectuses, if any, identified in Schedule C hereto [and the pricing information included in Schedule D hereto]. “Road Show” means a “road show” as defined in Rule 433 under the Securities Act related to the offering of the Shares contemplated hereby that is a “written communication” (as defined in Rule 405 under the Securities Act). All references in this Agreement to the Registration Statement, the 462(b) Registration Statement, any preliminary prospectus or the Prospectus, or any amendments or supplements to any of the foregoing, shall include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”).

     The Company and each of the Selling Stockholders hereby confirm their respective agreements with the Underwriters as follows:

          Section 1. Representations and Warranties of the Company

   A. Representations and Warranties of the Company. The Company hereby represents, warrants and covenants to each Underwriter, as of the date of this Agreement, as of the First Closing Date (as hereinafter defined) and as of each Option Closing Date (as hereafter defined), if any, and covenants with each Underwriter, as follows:

   (a) Compliance with Registration Requirements . The Registration Statement has been declared effective by the Commission and any Rule 462(b) Registration Statement has become effective under the Securities Act. No stop order suspending the effectiveness of the Registration Statement or any Rule 462(b) Registration Statement is in effect and no proceedings for such purpose have been instituted or are pending or, to the best knowledge of the Company, are contemplated or threatened by the Commission.

     The Time of Sale Prospectus complied, and the Prospectus will comply, when filed in all material respects with the Securities Act and, if filed by electronic transmission pursuant to EDGAR (except as may be permitted by Regulation S-T under the Securities Act), was or will be identical to the copy thereof delivered to the Underwriters for use in connection with the offer and sale of the Offered Shares. Each of the Registration Statement, any Rule 462(b) Registration Statement and any post-effective amendment thereto, at the time it became effective, the First Closing Date and any Option Closing Date, complied and will comply in all material respects with the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. As of the Applicable Time, the Time of Sale Prospectus did not, and at the First Closing Date and any Option Closing Date (as defined in Section 2), the Time of Sale Prospectus will not, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Prospectus as of its date and at the First Closing Date and any Option Closing Date, did not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties set forth in the three immediately

2

preceding sentences do not apply to statements in or omissions from the Registration Statement, any Rule 462(b) Registration Statement, or any post-effective amendment thereto, or the Prospectus or the Time of Sale Prospectus, or any amendments or supplements thereto, or any Road Show, made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by the Representative expressly for use therein, it being understood and agreed that the only such information furnished by the Representative to the Company consists of the information described in Section 8(c) below. There are no contracts or other documents required to be described in the Time of Sale Prospectus or the Prospectus or to be filed as exhibits to the Registration Statement which have not been described or filed as required.

     The Company is not an “ineligible issuer” in connection with the offering of the Offered Shares pursuant to Rule 405 under the Securities Act. Any free writing prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act. Each free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or on behalf of or used or referred to by the Company complies or will comply in all material respects with the requirements of Rule 433 under the Securities Act including timely filing with the Commission or retention where required, and legending, and each such free writing prospectus, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Offered Shares, did not, does not and will not include any information that conflicted, conflicts with or will conflict with the information contained in the Registration Statement, the Prospectus or any preliminary prospectus that has not been superseded or modified. Except for the free writing prospectuses, if any, identified in Schedule C hereto, and Road Shows, if any, furnished to the Representative before first use, the Company has not prepared, used or referred to, and will not prepare, use or refer to, any free writing prospectus to which the Representative has objected pursuant to Section 3(A)(c).

   (b) Offering Materials Furnished to Underwriters. The Company has delivered to the Representative one complete manually signed copy of the Registration Statement, each amendment thereto and any Rule 462(b) Registration Statement and of each consent of experts filed as a part thereof, and conformed copies of the Registration Statement, each amendment thereto and any Rule 462(b) Registration Statement (without exhibits) and preliminary prospectuses, the Time of Sale Prospectus, the Prospectus, as amended or supplemented, and any free writing prospectus reviewed by and to which the Representative has not objected pursuant to Section 3(A)(c), in such quantities and at such places as the Representative has reasonably requested for each of the Underwriters.

   (c) Distribution of Offering Material By the Company. The Company has not distributed and will not distribute, prior to the later of (i) the expiration or termination of the option granted to the several Underwriters in Section 2, (ii) the completion of the Underwriters’ distribution of the Offered Shares and (iii) the expiration of 25 days after the date of the Prospectus, any offering material in connection with the offering and sale of the Offered Shares other than a preliminary prospectus, the Time of Sale Prospectus, the Prospectus and any free writing prospectus reviewed by and to which the Representative has not objected pursuant to Section 3(A)(c) or the Registration Statement.

   (d) The Underwriting Agreement. This Agreement has been duly authorized, executed and delivered by the Company.

3

   (e) Authorization of the Offered Shares. The Offered Shares have been duly authorized for issuance and sale pursuant to this Agreement and, when issued and delivered by the Company upon payment therefore pursuant to this Agreement, will be validly issued, fully paid and nonassessable, and the issuance and sale of the Offered Shares is not subject to any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase the Offered Shares.

   (f) No Applicable Registration or Other Similar Rights. There are no persons with registration or other similar rights to have any equity or debt securities registered for sale under the Registration Statement or included in the offering contemplated by this Agreement, other than the Selling Stockholders with respect to the Offered Shares included in the Registration Statement, except for such rights as have been duly waived.

   (g) No Material Adverse Change. Except as otherwise set forth in the Prospectus and Time of Sale Prospectus (each, an “Applicable Prospectus” and collectively, the “Applicable Prospectuses”), subsequent to the respective dates as of which information is given in each Applicable Prospectus: (i) there has been no material adverse change, or any development that would reasonably be expected to result in a material adverse change, in the condition (financial or otherwise), or in the earnings, business, operations or prospects, whether or not arising from transactions in the ordinary course of business, of the Company and its subsidiaries, considered as one entity (any such change is called a “Material Adverse Change”); (ii) the Company and its subsidiaries, considered as one entity, have not incurred any material liability or obligation, indirect, direct or contingent, not in the ordinary course of business nor entered into any material transaction or agreement not in the ordinary course of business; and (iii) there has been no dividend or distribution of any kind declared, paid or made by the Company or, except for dividends paid to the Company or other subsidiaries, any of its subsidiaries on any class of capital stock or repurchase or redemption by the Company or any of its subsidiaries of any class of capital stock.

   (h) Independent Accountant. McGladrey & Pullen, LLP, who has expressed its opinion with respect to the financial statements (which term as used in this Agreement includes the related notes thereto) filed with the Commission as a part of the Registration Statement and included in each Applicable Prospectus, are (i) independent public accountants as required by the Securities Act, (ii) in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X and (iii) a registered public accounting firm as defined by the Public Company Accounting Oversight Board (the “PCAOB”) whose registration has not been suspended or revoked and who has not requested such registration to be withdrawn.

   (i) Preparation of the Financial Statements. The financial statements filed with the Commission as a part of the Registration Statement and included in each Applicable Prospectus present fairly the consolidated financial position of the Company and its subsidiaries as of and at the dates indicated and the results of their operations and cash flows for the periods specified. Such financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved, except as may be expressly stated in the related notes thereto. No other financial statements or supporting schedules are required to be included in the Registration Statement or any Applicable Prospectus under the Securities Act. The pro forma consolidated financial statements of the Company and its subsidiaries and the related notes thereto included under the captions “Summary—Summary Historical and Pro Forma Consolidated Financial and

4

Operating Data” and “Unaudited Pro Forma Consolidated Financial Information” and elsewhere in the Prospectus and in the Registration Statement present fairly the information contained therein, have been prepared in accordance with the Commission’s rules and guidelines with respect to pro forma financial statements and have been properly presented on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein.

   (j) Company’s Accounting System. The Company and its subsidiaries taken as a whole make and keep accurate books and records and maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Commencing on the first date of any period for which audited financial statements are included in the Registration Statement, there has not been any, and there is no, material weakness in the Company’s internal control over financial reporting, and, since December 31, 2011, there has been no change in the Company’s internal control over financial reporting that has materially and adversely affected, or is reasonably likely to materially and adversely affect, the Company’s internal control over financial reporting.

   (k) Incorporation and Good Standing of the Company and its Subsidiaries. Each of the Company and its subsidiaries has been duly incorporated or organized, as the case may be, and is validly existing as a corporation, partnership or limited liability company, as applicable, in good standing under the laws of the jurisdiction of its incorporation or organization and has the power and authority (corporate or other) to own, lease and operate its properties and to conduct its business as described in each Applicable Prospectus and, in the case of the Company, to enter into and perform its obligations under this Agreement, except, in the case of the Company’s subsidiaries, to the extent that the failure to be so qualified or be in good standing would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the condition (financial or otherwise), or on the earnings, business or prospects of the Company and its subsidiaries taken as a whole (“Material Adverse Effect”). Each of the Company and each subsidiary is duly qualified as a foreign corporation, partnership or limited liability company, as applicable, to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except to such extent as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. All of the issued and outstanding capital stock or other equity or ownership interests of each subsidiary (i) have been duly authorized and validly issued, are fully paid and nonassessable and are owned by the Company, directly or through subsidiaries, and (ii) are free and clear of any security interest, mortgage, pledge, lien, encumbrance or adverse claim, except (x) in the case of clause (ii) above, as set forth in each Applicable Prospectus and (y) in the case of subsidiaries that are not Significant Subsidiaries (as defined below), for security interests, mortgages, pledges, liens, encumbrances or adverse claims as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company does not own or control, directly or indirectly, any corporation, association or other entity other than (i) the subsidiaries listed in Exhibit 21 to

5

the Registration Statement and (ii) such other entities omitted from Exhibit 21 which, when such omitted entities are considered in the aggregate as a single subsidiary, would not constitute a “significant subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X. None of the subsidiaries of the Company other than Regional Finance Corporation of South Carolina, Regional Finance Corporation of North Carolina and Regional Finance Corporation of Texas (each a “Significant Subsidiary”, and collectively, the “Significant Subsidiaries”) is a “significant subsidiary” (as defined in Rule 405).

   (l) Capitalization and Other Capital Stock Matters. The authorized, issued and outstanding capital stock of the Company is as set forth in each Applicable Prospectus under the caption “Capitalization” (other than for subsequent issuances, if any, pursuant to employee benefit plans described in each Applicable Prospectus or upon the exercise of outstanding options described in each Applicable Prospectus). The Shares (including the Offered Shares) conform, or will conform as of the First Closing Date, in all material respects to the description thereof contained in each Applicable Prospectus. All of the issued and outstanding Shares (including the Shares owned by Selling Stockholders) have been duly authorized and validly issued, are fully paid and nonassessable and have been issued in compliance with federal and state securities laws. None of the outstanding Shares was issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company or any of its subsidiaries other than those set forth in each Applicable Prospectus. The description of the Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, set forth in each Applicable Prospectus accurately presents the information required to be shown with respect to such plans, arrangements, options and rights.

   (m) Stock Exchange Listing. The Offered Shares have been approved for listing on the New York Stock Exchange, subject only to official notice of issuance.

   (n) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required. Neither the Company nor any of its subsidiaries is in violation of its charter or by-laws, partnership agreement or operating agreement or similar organizational document, as applicable, or is in default (or, with the giving of notice or lapse of time, would be in default) (“Default”) under any indenture, mortgage, loan or credit agreement, note, contract, franchise, lease or other instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound (including, without limitation, any credit agreement, indenture, pledge agreement, security agreement or other instrument or agreement evidencing, guaranteeing, securing or relating to indebtedness of the Company or any of its subsidiaries), or to which any of the property or assets of the Company or any of its subsidiaries is subject (each, an “Existing Instrument”), except for such violations (in the case of subsidiaries) or Defaults as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company’s execution, delivery and performance of this Agreement, consummation of the transactions contemplated hereby and the application of the net proceeds in the manner and to the extent set forth in each Applicable Prospectus and the issuance and sale of the Offered Shares (i) have been duly authorized by all necessary corporate action and will not result in any violation of the provisions of the charter or by-laws or similar organizational document of the Company or any subsidiary, as applicable, (ii) will not conflict with or constitute a breach of, or Default or

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a Debt Repayment Triggering Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, or require the consent of any other party to, any Existing Instrument and (iii) will not result in any violation of any law, administrative regulation or administrative or court decree applicable to the Company or any subsidiary, except, (x) in the case of clauses (ii) or (iii) above, as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and (y) in the case of clause (i) above, solely with respect to the Company’s subsidiaries that are not Significant Subsidiaries, as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental or regulatory authority or agency, is required for the Company’s execution, delivery and performance of this Agreement and consummation of the transactions contemplated hereby and by each Applicable Prospectus, except such as have been obtained or made by the Company and are in full force and effect and such as may be required under the Securities Act, the Securities Exchange Act of 1934, as amended (the “Exchange Act”), applicable state securities or blue sky laws and from FINRA. As used herein, a “Debt Repayment Triggering Event” means any event or condition which gives, or with the giving of notice or lapse of time would give, the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries.

   (o) No Material Actions or Proceedings. Except as set forth in each Applicable Prospectus, there are no legal or governmental actions, suits or proceedings pending or, to the best of the Company’s knowledge, threatened (i) against or affecting the Company or any of its subsidiaries or (ii) which have as the subject thereof any officer or director of, or property owned or leased by the Company or any of its subsidiaries, that would reasonably be expected to have a Material Adverse Effect or adversely affect the consummation of the transactions contemplated by this Agreement. Except as would not reasonably be expected to have a Material Adverse Effect, no labor dispute with the employees of the Company or any of its subsidiaries, or with the employees of any principal supplier, manufacturer, customer or contractor of the Company, exists or, to the best of the Company’s knowledge, is threatened or imminent.

   (p) Intellectual Property Rights. Except as set forth in each Applicable Prospectus, the Company and its subsidiaries own or possess sufficient trademarks, trade names, patent rights, copyrights, domain names, licenses, approvals, trade secrets and other similar rights (collectively, “Intellectual Property Rights”) reasonably necessary to conduct their businesses as now conducted except as would not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its subsidiaries has received any notice of infringement or conflict with asserted Intellectual Property Rights of others, except as would not reasonably be expected to have a Material Adverse Effect. The Company is not a party to or bound by any options, licenses or agreements with respect to the Intellectual Property Rights of any other person or entity that are required to be set forth in the Prospectus and are not described therein. (The Time of Sale Prospectus contains in all material respects the same description of the matters set forth in the preceding sentence contained in the Prospectus.) None of the technology employed by the Company or any of its subsidiaries has been obtained or is being used by the Company or any of its subsidiaries in violation of any contractual obligation binding on the Company or any of its subsidiaries or, to the Company’s knowledge, any of its or its subsidiaries’ officers, directors or employees or otherwise in

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violation of the rights of any persons, except as would not reasonably be expected to have a Material Adverse Effect.

   (q) All Necessary Permits, etc. The Company and each subsidiary possess such valid and current certificates, authorizations or permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct their respective businesses, and neither the Company nor any subsidiary has received, or has any reason to believe that it will receive, any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such certificate, authorization or permit, except in each case as would not reasonably be expected to have a Material Adverse Effect.

   (r) Title to Properties. Except as set forth in each Applicable Prospectus, the Company and each of its subsidiaries has good and marketable title to all of the real and personal property and other assets reflected as owned in any Applicable Prospectus, in each case free and clear of any security interests, mortgages, liens, encumbrances, equities, adverse claims and other defects, except such as do not materially and adversely affect the value of such property and do not materially interfere with the use made or proposed to be made of such property by the Company or such subsidiary. Except as otherwise disclosed in each Applicable Prospectus, the real property, improvements, equipment and personal property held under lease by the Company or any subsidiary are held under valid and enforceable leases, with such exceptions as are not material and do not materially interfere with the use made or proposed to be made of such real property, improvements, equipment or personal property by the Company or such subsidiary.

   (s) Tax Law Compliance. The Company and its consolidated subsidiaries have filed all necessary federal, state and foreign income and franchise tax returns and have paid all taxes required to be paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them, except in each case as would not reasonably be expected to have a Material Adverse Effect. The Company has made adequate charges, accruals and reserves in the applicable financial statements referred to in Section 1(A)(i) above in respect of all federal, state and foreign income and franchise taxes for all periods as to which the tax liability of the Company or any of its consolidated subsidiaries has not been finally determined.

   (t) Company Not an “Investment Company”. The Company is not, and will not be, either after receipt of payment for the Offered Shares or after the application of the proceeds therefrom as described under “Use of Proceeds” in each Applicable Prospectus, an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “Investment Company Act”) and will conduct its business in a manner so that it will not become subject to the Investment Company Act.

   (u) Insurance. Each of the Company and its subsidiaries are insured by recognized, financially sound and reputable institutions with policies in such amounts and with such deductibles and covering such risks as are generally prudent and customary for their businesses, issued by issuers of recognized financial responsibilities. The Company has no reason to believe that it or any subsidiary will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not reasonably be expected to have a Material Adverse Effect. Since

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January 1, 2011, neither the Company nor any subsidiary has been denied any insurance coverage for which it has applied.

   (v) No Price Stabilization or Manipulation; Compliance with Regulation M. The Company has not taken, directly or indirectly, any action designed to or that might be reasonably expected to cause or result in the unlawful stabilization or manipulation of the price of the Shares or any other “reference security” (as defined in Rule 100 of Regulation M under the Exchange Act (“Regulation M”)) whether to facilitate the sale or resale of the Offered Shares or otherwise, and has taken no action which would directly or indirectly violate Regulation M.

   (w) Related Party Transactions. There are no business relationships or related-party transactions involving the Company or any of its subsidiaries or any other person required to be described in each Applicable Prospectus which have not been described as required. (The Time of Sale Prospectus contains in all material respects the same description of the matters set forth in the preceding sentence contained in the Prospectus.)

   (x) FINRA Matters. The information provided to the Underwriters or to counsel for the Underwriters by the Company in connection with letters, filings or other supplemental information provided to FINRA pursuant to FINRA Rule 5110 or FINRA Rule 5121 is true, complete and correct.

   (y) Parties to Lock-Up Agreements. Each of the Company’s directors and executive officers and each of the other persons and entities listed in Exhibit A has executed and delivered to Jefferies a lock-up agreement in the form of Exhibit B hereto. Exhibit A hereto contains a true, complete and correct list of all directors and executive officers of the Company. If any additional persons shall become directors or executive officers of the Company prior to the end of the Company Lock-up Period (as defined below), the Company shall cause each such person, prior to or contemporaneously with their appointment or election as a director or executive officer of the Company, to execute and deliver to Jefferies an agreement in the form attached hereto as Exhibit B.

   (z) Statistical and Market-Related Data. The statistical, demographic and market-related data included in the Registration Statement and each Applicable Prospectus are based on or derived from sources that the Company believes to be reliable and accurate in all material respects or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.

   (aa) No Unlawful Contributions or Other Payments. Neither the Company nor any of its subsidiaries nor, to the best of the Company’s knowledge, any employee or agent of the Company or any subsidiary acting on behalf of the Company or such subsidiary, has made any contribution or other payment to any official of, or candidate for, any federal, state or foreign office in violation of any law or of the character required to be disclosed in the Registration Statement and each Applicable Prospectus.

   (bb) Disclosure Controls and Procedures; Deficiencies in or Changes to Internal Control Over Financial Reporting. The Company has established and maintains disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), which (i) are designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company’s principal executive officer and its

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principal financial officer by others within those entities; and (ii) are effective in all material respects to perform the functions for which they were established.

   (cc) Compliance with Environmental Laws. Except as described in each Applicable Prospectus and except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) neither the Company nor any of its subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, “Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”), (ii) the Company and its subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their requirements, (iii) there are no pending or, to the knowledge of the Company, threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company or any of its subsidiaries and (iv) to the knowledge of the Company, there are no events or circumstances that would reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company or any of its subsidiaries relating to Hazardous Materials or any Environmental Laws.

   (dd) ERISA Compliance. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, the Company and its subsidiaries and any “employee benefit plan” (as defined under the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”)) established or maintained by the Company, its subsidiaries or their “ERISA Affiliates” (as defined below) are in compliance in all respects with ERISA. “ERISA Affiliate” means, with respect to the Company or a subsidiary, any member of any group of organizations described in Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (the “Code”) of which the Company or such subsidiary is a member. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, no “reportable event” (as defined under ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates. Except as otherwise set forth in each Applicable Prospectus or as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, no “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates, if such “employee benefit plan” were terminated, would have any “amount of unfunded benefit liabilities” (as defined under ERISA). Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, neither the Company, its subsidiaries nor any of their ERISA Affiliates has incurred or reasonably expects to incur any liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971,

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4975 or 4980B of the Code. Each “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or failure to act, which would cause the loss of such qualification.

   (ee) Brokers. Except for the underwriting discounts and commissions payable to the Underwriters as described in each Applicable Prospectus, there is no broker, finder or other party that is entitled to receive from the Company any brokerage or finder’s fee or other fee or commission as a result of any transactions contemplated by this Agreement.

   (ff) No Outstanding Loans or Other Extensions of Credit.There is no failure on the part of the Company and any of the Company’s directors or officers, in their capacities as such, to comply with the applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith.

   (gg) Compliance with Certain Laws. The Company has not been advised, and has no reason to believe, that it and each of its subsidiaries are not conducting business in compliance with all statutes, rules and regulations of governmental agencies or regulatory bodies of the United States and the states of Alabama, North Carolina, South Carolina, Tennessee and Texas insofar as such statutes, rules or regulations govern the purchase of consumer-purpose retail installment sale contracts secured by personal property (including motor vehicles), the origination of consumer-purpose direct installment loans secured by personal property or the purchase or origination of ancillary insurance products, including credit life insurance, credit accident and health insurance, involuntary unemployment insurance, collateral protection collision insurance, property insurance and auto club memberships, except where failure to be so in compliance would not reasonably be expected to have a Material Adverse Effect.

   (hh) Dividend Restrictions. Except as set forth in each Applicable Prospectus, no subsidiary of the Company is prohibited or restricted, directly or indirectly, from paying dividends to the Company, or from making any other distribution with respect to such subsidiary’s equity securities or from repaying to the Company or any other subsidiary of the Company any amounts that may from time to time become due under any loans or advances to such subsidiary from the Company or from transferring any property or assets to the Company or to any other subsidiary.

   (ii) Foreign Corrupt Practices Act. Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee, affiliate or other person acting on behalf of the Company or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that has resulted or would result in a violation of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA; and the Company and its subsidiaries and, to the knowledge of the Company, the Company’s affiliates have conducted their respective businesses in compliance with the FCPA and have instituted and maintain policies

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and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

   (jj) Money Laundering Laws. The operations of the Company and its subsidiaries are, and have been conducted at all times, in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar applicable rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.

   (kk) OFAC. Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee, affiliate or person acting on behalf of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of this offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

               Any certificate signed by any officer of the Company or any of its subsidiaries and delivered to the Representative or to counsel for the Underwriters shall be deemed a representation and warranty by the Company to each Underwriter as to the matters covered thereby.

               The Company acknowledges that the Underwriters and, for purposes of the opinions to be delivered pursuant to Section 6 hereof, counsel to the Company, counsel to the Selling Stockholders and counsel to the Underwriters, will rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to such reliance.

          B. Representations and Warranties of the Selling Stockholders. Each Selling Stockholder, severally and not jointly, represents, warrants and covenants to each Underwriter as follows:

   (a) The Underwriting Agreement. This Agreement has been duly authorized, executed and delivered by or on behalf of such Selling Stockholder.

   (b) The Power of Attorney. The Power of Attorney appointing certain individuals named therein as such Selling Stockholder’s attorneys-in-fact (each, an “Attorney-in-Fact”) to the extent set forth therein relating to the transactions contemplated hereby and by the Prospectus (the “Power of Attorney”), of such Selling Stockholder has been duly authorized, executed and delivered by such Selling Stockholder and is a valid and binding agreement of such Selling Stockholder, enforceable in accordance with its terms, except as rights to indemnification thereunder may be limited by applicable law or public policy and except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles.

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   (c) Title to Offered Shares to be Sold. Such Selling Stockholder has, and on the First Closing Date and any Option Closing Date will have, good and valid title to all of the Offered Shares which may be sold by such Selling Stockholder pursuant to this Agreement on such date free and clear of any security interest, mortgage, pledge, lien, encumbrance or other adverse claim, and the legal right and power to sell, transfer and deliver all of the Offered Shares which may be sold by such Selling Stockholder pursuant to this Agreement and to comply with its other obligations hereunder and thereunder.

   (d) Delivery of the Offered Shares to be Sold. Delivery of the Offered Shares which are sold by such Selling Stockholder upon payment therefor pursuant to this Agreement will pass good and valid title to such Offered Shares, free and clear of any security interest, mortgage, pledge, lien, encumbrance or other adverse claim, to the Underwriters.

   (e) Non-Contravention; No Further Authorizations or Approvals Required. The execution and delivery by such Selling Stockholder of, and the performance by such Selling Stockholder of its obligations under, this Agreement and the Power of Attorney will not contravene or conflict with, result in a breach of, or constitute a Default under, or require the consent of any other party to, (i) the charter or by-laws, partnership agreement, trust agreement or other organizational documents of such Selling Stockholder (if such Selling Stockholder is not an individual) (ii) any other agreement or instrument to which such Selling Stockholder is a party or by which it is bound or under which it is entitled to any right or benefit, or (iii) any provision of applicable law or any judgment, order, decree or regulation applicable to such Selling Stockholder of any court, regulatory body, administrative agency, governmental body or arbitrator having jurisdiction over such Selling Stockholder, except, with respect to clauses (ii) and (iii), as would not, individually or in the aggregate, adversely affect the ability of the Selling Stockholder to perform its obligations hereunder and under the Power of Attorney (a “Selling Stockholder Material Adverse Effect”). No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental authority or agency, is required for the consummation by such Selling Stockholder of the transactions contemplated in this Agreement, except such as have been obtained or made and are in full force and effect and such as may be required under the Securities Act, the Exchange Act, applicable state securities or blue sky laws and from FINRA.

   (f) No Registration, Pre-emptive, Co-Sale or Other Similar Rights. Such Selling Stockholder (i) does not have any registration or other similar rights to have any equity or debt securities registered for sale by the Company under the Registration Statement or included in the offering contemplated by this Agreement, except for such rights as are described in each Applicable Prospectus under “Shares Eligible for Future Sale,” (ii) does not have any preemptive right, co-sale right or right of first refusal or other similar right to purchase any of the Offered Shares that are to be sold by the Company or any of the other Selling Stockholders to the Underwriters pursuant to this Agreement, except for such rights as such Selling Stockholder has waived prior to the date hereof and as have been described in the Registration Statement and each Applicable Prospectus, and (iii) does not own any warrants, options or similar rights to acquire, and does not have any right or arrangement to acquire, any capital stock, right, warrants, options or other securities from the Company, other than those described in the Registration Statement and each Applicable Prospectus.

   (g) No Further Consents, etc. Except for such consents, approvals and waivers which have been obtained by such Selling Stockholder on or prior to the date of this Agreement, no

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consent, approval or waiver is required under any instrument or agreement to which such Selling Stockholder is a party or by which it is bound or under which it is entitled to any right or benefit, in connection with the offering, sale or purchase by the Underwriters of any of the Offered Shares which may be sold by such Selling Stockholder under this Agreement or the consummation by such Selling Stockholder of any of the other transactions contemplated hereby.

   (h) Disclosure Made by Such Selling Stockholder in the Prospectus. The description of the Selling Stockholder, the number of shares held by such Selling Stockholder and the beneficial ownership of such shares in the Registration Statement and each Applicable Prospectus under the caption “Principal and Selling Stockholders” and, with respect to Palladium Equity Partners III, L.P., the information contained in the second, third and fourth sentences under the caption “Summary—Our Sponsors” and, with respect to Parallel 2005 Equity Fund, LP, the information contained in the fifth, sixth and seventh sentences under the caption “Summary—Our Sponsors” (collectively, the “Selling Stockholder Information”) is, and on the First Closing Date and the applicable Option Closing Date will be, true, correct, and complete in all material respects and does not, and on the First Closing Date and the applicable Option Closing Date will not, contain any untrue statement of a material fact or omit to state any material fact necessary to make such statements, in light of the circumstances under which they were made, not misleading. Such Selling Stockholder confirms as accurate the number of Shares set forth opposite such Selling Stockholder’s name in each Applicable Prospectus under the caption “Principal and Selling Stockholders” (both prior to and after giving effect to the sale of the Offered Shares).

   (i) No Price Stabilization or Manipulation; Compliance with Regulation M. Such Selling Stockholder has not taken, directly or indirectly, any action designed to or that might be reasonably expected to cause or result in the unlawful stabilization or manipulation of the price of the Shares or any other reference security, whether to facilitate the sale or resale of the Offered Shares or otherwise, and has taken no action which would directly or indirectly violate any provision of Regulation M.

   (j) Distribution of Offering Materials by the Selling Stockholders. Such Selling Stockholder has not distributed and will not distribute, prior to the latest of (i) the expiration or termination of the option granted to the several Underwriters under Section 2, (ii) the completion of the Underwriters’ distribution of the Offered Shares, or (iii) the expiration of 25 days after the date of the Prospectus, any offering material in connection with the offering and sale of the Offered Shares other than a preliminary prospectus, the Time of Sale Prospectus, the Prospectus, any free writing prospectus consented to by the Representative or the Registration Statement.

   (k) Confirmation by the Selling Stockholder. Such Selling Stockholder is not prompted to sell Shares based on any information concerning the Company which is not set forth in the Registration Statement and the Applicable Prospectuses. Such Selling Stockholder (if Palladium Equity Partners III, L.P., Parallel 2005 Equity Fund, LP, Richard A. Godley or Glynn Quattlebaum) has no knowledge of any fact or condition regarding the Company and its subsidiaries that is not disclosed in the Registration Statement that would reasonably be expected to have a Material Adverse Effect.

   (l) FINRA Matters. The information provided to the Underwriters or to counsel for the Underwriters by such Selling Stockholder in connection with letters, filings or other

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supplemental information provided to FINRA pursuant to FINRA Rule 5110 or FINRA Rule 5121 is true, complete and correct.

               Any certificate signed by the Selling Stockholder and delivered to the Representative or to counsel for the Underwriters shall be deemed a representation and warranty by the Selling Stockholder to each Underwriter as to the matters covered thereby.

               Such Selling Stockholder acknowledges that the Underwriters and, for purposes of the opinion to be delivered pursuant to Section 6 hereof, counsel to the Selling Stockholder and counsel to the Underwriters, will rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to such reliance.

   Section 2. Purchase, Sale and Delivery of the Offered Shares.

   (a) The Firm Shares. Upon the terms herein set forth, (i) the Company agrees to issue and sell to the several Underwriters an aggregate of            Firm Shares and (ii) the Selling Stockholders severally agree to sell to the several Underwriters an aggregate of            Firm Shares, with each Selling Stockholder selling the number of Firm Shares set forth opposite such Selling Stockholder’s name on Schedule B. On the basis of the representations, warranties and agreements herein contained, and upon the terms but subject to the conditions herein set forth, the Underwriters agree, severally and not jointly, to purchase from the Company and the Selling Stockholders the respective number of Firm Shares set forth opposite their names on Schedule A. The purchase price per Firm Share to be paid by the several Underwriters to the Company and the Selling Stockholders shall be $  per share.

   (b) The First Closing Date. Delivery of the Firm Shares to be purchased by the Underwriters and payment therefor shall be made at the offices of White & Case LLP, 1155 Avenue of the Americas, New York, New York (or such other place as may be agreed to by the Company and the Representative) at 10:00 a.m. New York time, on      , 2012 or such other time and date not later than 1:30 p.m. New York time, on      , 2012 as the Representative shall designate by notice to the Company (the time and date of such closing are called the “First Closing Date”). The Company and the Selling Stockholders hereby acknowledge that circumstances under which the Representative may provide notice to postpone the First Closing Date as originally scheduled include, but are in no way limited to, any determination by the Company, the Selling Stockholders or the Representative to recirculate to the public copies of an amended or supplemented Prospectus or a delay as contemplated by the provisions of Section 10.

   (c) The Optional Shares; Option Closing Date. In addition, on the basis of the representations, warranties and agreements herein contained, and upon the terms but subject to the conditions herein set forth, the Selling Stockholders hereby grant an option to the several Underwriters to purchase, severally and not jointly, up to an aggregate of Optional Shares from the Selling Stockholders at the purchase price per share to be paid by the Underwriters for the Firm Shares. The option granted hereunder is for use by the Underwriters solely in covering any over-allotments in connection with the sale and distribution of the Firm Shares. The option granted hereunder may be exercised at any time and from time to time in whole or in part upon notice by the Representative to the Selling Stockholders (with a copy to the Company), which notice may be given at any time within 30 days from the date of this Agreement. Such notice shall set forth (i) the aggregate number of Optional Shares as to which the Underwriters are exercising the option, (ii) the names and

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denominations in which the Optional Shares are to be registered and (iii) the time, date and place at which such Optional Shares will be delivered (which time and date may be simultaneous with, but not earlier than, the First Closing Date; and in the event that such time and date are simultaneous with the First Closing Date, the term “First Closing Date” shall refer to the time and date of delivery of the Firm Shares and such Optional Shares). Any such time and date of delivery, if subsequent to the First Closing Date, is called an “Option Closing Date” and shall be determined by the Representative and shall not be earlier than three or later than five full business days after delivery of such notice of exercise. If any Optional Shares are to be purchased, (a) each Underwriter agrees, severally and not jointly, to purchase the number of Optional Shares (subject to such adjustments to eliminate fractional shares as the Representative may determine) that bears the same proportion to the total number of Optional Shares to be purchased as the number of Firm Shares set forth on Schedule A opposite the name of such Underwriter bears to the total number of Firm Shares and (b) each Selling Stockholder agrees severally and not jointly, to sell the number of Optional Shares (subject to such adjustments to eliminate fractional shares as the Representative may determine) that bears the same proportion to the total number of Optional Shares to be sold as the number of Optional Shares set forth in Schedule B opposite the name of such Selling Stockholder bears to the total number of Optional Shares. The Representative may cancel the option at any time prior to its expiration, to the extent not previously exercised, by giving written notice of such cancellation to the Selling Stockholders (with a copy to the Company).

   (d) Public Offering of the Offered Shares. The Representative hereby advises the Company and the Selling Stockholders that the Underwriters intend to offer for sale to the public, initially on the terms set forth in each Applicable Prospectus, their respective portions of the Offered Shares as soon after this Agreement has been executed and the Registration Statement has been declared effective as the Representative, in its sole judgment, has determined is advisable and practicable.

   (e) Payment for the Offered Shares. Payment for the Offered Shares to be sold by the Company shall be made at the First Closing Date by wire transfer of immediately available funds to the order of the Company. Payment for the Offered Shares to be sold by the Selling Stockholders shall be made at the First Closing Date (and, if applicable, at each Option Closing Date) by wire transfer of immediately available funds to the order of the Company as paying agent for such Selling Stockholders.

          It is understood that the Representative has been authorized, for its own account and the accounts of the several Underwriters, to accept delivery of and receipt for, and make payment of the purchase price for, the Firm Shares and any Optional Shares the Underwriters have agreed to purchase. Jefferies, individually and not as the Representative of the Underwriters, may (but shall not be obligated to) make payment for any Offered Shares to be purchased by any Underwriter whose funds shall not have been received by the Representative by the First Closing Date or the applicable Option Closing Date, as the case may be, for the account of such Underwriter, but any such payment shall not relieve such Underwriter from any of its obligations under this Agreement.

          Each Selling Stockholder hereby agrees that (i) it will pay all stock transfer taxes, stamp duties and other similar taxes, if any, payable upon the sale or delivery of the Offered Shares to be sold by such Selling Stockholder to the several Underwriters, or otherwise in connection with the performance of such Selling Stockholder’s obligations hereunder.

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   (f) Delivery of the Offered Shares. The Company and the Selling Stockholders shall deliver, or cause to be delivered, to the Representative for the accounts of the several Underwriters the Firm Shares to be sold by them at the First Closing Date against the irrevocable release of a wire transfer of immediately available funds for the amount of the purchase price therefor. The Company and the Selling Stockholders shall also deliver, or cause to be delivered, to the Representative for the accounts of the several Underwriters, the Optional Shares the Underwriters have agreed to purchase from them at the First Closing Date or the applicable Option Closing Date, as the case may be, against the irrevocable release of a wire transfer of immediately available funds for the amount of the purchase price therefor. Time shall be of the essence, and delivery at the time and place specified in this Agreement is a further condition to the obligations of the Underwriters. The Company and the Selling Stockholders shall deliver the Offered Shares through the facilities of The Depository Trust Company (“DTC”) unless the Representative shall otherwise instruct.

     Section 3. Additional Covenants.

               A. Covenants of the Company. The Company further covenants and agrees with each Underwriter as follows:

   (a) Delivery of Registration Statement, Time of Sale Prospectus and Prospectus. The Company shall furnish to the Representative, without charge, one signed copy of the Registration Statement, any amendments thereto and any Rule 462(b) Registration Statement (including exhibits thereto) and for delivery to each other Underwriter a conformed copy of the Registration Statement, any amendments thereto and any Rule 462(b) Registration Statement (without exhibits thereto) and shall furnish to the Representative in New York City, without charge, prior to 10:00 a.m. New York City time on the second business day succeeding the date of this Agreement and during the period mentioned in Section 3(A)(e) or 3(A)(g) below, as many copies of the Time of Sale Prospectus, the Prospectus and any supplements and amendments thereto or to the Registration Statement as the Representative may reasonably request; provided that any copies of the Registration Statement, the Time of Sale Prospectus, the Prospectus and any supplements and amendments thereto requested by the Representative more than nine months after the date hereof shall be provided at the expense of the Representative.

   (b) Representative’s Review of Proposed Amendments and Supplements. At any time prior to the expiration of nine months after the time of issue of the Prospectus, prior to amending or supplementing the Registration Statement (including any registration statement filed under Rule 462(b) under the Securities Act), any preliminary prospectus, the Time of Sale Prospectus or the Prospectus, the Company shall furnish to the Representative for review, a reasonable amount of time prior to the proposed time of filing or use thereof, a copy of each such proposed amendment or supplement, and the Company shall not file or use any such proposed amendment or supplement to which the Representative shall reasonably object by notice to the Company after having been furnished a copy a reasonable time prior to the filing, and to file with the Commission within the applicable period specified in Rule 424(b) under the Securities Act any prospectus required to be filed pursuant to such Rule in connection with sales of the Offered Shares.

   (c) Free Writing Prospectuses. The Company shall furnish to the Representative for review, a reasonable amount of time prior to the proposed time of filing or use thereof, a copy of each proposed free writing prospectus or any amendment or supplement thereto to be

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prepared by or on behalf of, used by, or referred to by the Company and the Company shall not file, use or refer to any proposed free writing prospectus or any amendment or supplement thereto to which the Representative shall reasonably object by notice to the Company after having been furnished a copy a reasonable time prior to the filing. The Company shall furnish to each Underwriter, without charge, as many copies of any free writing prospectus prepared by or on behalf of, or used by the Company, as such Underwriter may reasonably request. If at any time prior to the expiration of nine months after the time of issue of the Prospectus when a prospectus is required by the Securities Act (including, without limitation, pursuant to Rule 173(d)) to be delivered in connection with sales of the Offered Shares (but in any event if at any time through and including the First Closing Date) there occurred or occurs an event or development as a result of which any free writing prospectus prepared by or on behalf of, used by, or referred to by the Company conflicted or would conflict with the information contained in the Registration Statement or, taken together with the Time of Sale Prospectus, included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company shall promptly amend or supplement such free writing prospectus to eliminate or correct such conflict or so that the statements in such free writing prospectus, taken together with the Time of Sale Prospectus, as so amended or supplemented will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at such subsequent time, not misleading, as the case may be; provided, however, that prior to amending or supplementing any such free writing prospectus, the Company shall furnish to the Representative for review, a reasonable amount of time prior to the proposed time of filing or use thereof, a copy of such proposed amended or supplemented free writing prospectus and the Company shall not file, use or refer to any such amended or supplemented free writing prospectus to which the Representative shall reasonably object by notice to the Company after having been furnished a copy a reasonable time prior to the filing.

   (d) Filing of Underwriter Free Writing Prospectuses. The Company shall not take any action that would result in an Underwriter or the Company being required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of the Underwriter that the Underwriter otherwise would not have been required to file thereunder.

   (e) Amendments and Supplements to Time of Sale Prospectus. If the Time of Sale Prospectus is being used to solicit offers to buy the Shares at a time when the Prospectus is not yet available to prospective purchasers and any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Time of Sale Prospectus so that the Time of Sale Prospectus does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances when delivered to a prospective purchaser, not misleading, or if, in the opinion of counsel for the Underwriters and counsel for the Company, it is necessary to amend or supplement the Time of Sale Prospectus to comply with applicable law, including the Securities Act, the Company shall (subject to Sections 3(A)(b)and 3(A)(c)) forthwith prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to any dealer upon request, either amendments or supplements to the Time of Sale Prospectus so that the statements in the Time of Sale Prospectus as so amended or supplemented will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances when delivered to a

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prospective purchaser, not misleading, or so that the Time of Sale Prospectus, as amended or supplemented, will comply with applicable law including the Securities Act.

   (f) Securities Act Compliance After the date of this Agreement, the Company shall promptly advise the Representative in writing (i) of the receipt of any comments of, or requests for additional or supplemental information from, the Commission, (ii) of the time and date of any filing of any post-effective amendment to the Registration Statement, any Rule 462(b) Registration Statement or any amendment or supplement to any preliminary prospectus, the Time of Sale Prospectus, any free writing prospectus or the Prospectus, (iii) of the time and date that any post-effective amendment to the Registration Statement or any Rule 462(b) Registration Statement becomes effective and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto, any Rule 462(b) Registration Statement or any amendment or supplement to any Preliminary Prospectus, the Time of Sale Prospectus or the Prospectus or of any order preventing or suspending the use of any preliminary prospectus, the Time of Sale Prospectus, any free writing prospectus or the Prospectus, or of any proceedings to remove, suspend or terminate from listing or quotation the Shares from any securities exchange upon which they are listed for trading or included or designated for quotation, or of the threatening or initiation of any proceedings for any of such purposes. If the Commission shall enter any such stop order at any time, the Company will use its best efforts to obtain the lifting of such order as promptly as practicable. Additionally, the Company agrees that it shall comply with the provisions of Rule 424(b), Rule 433 and Rule 430A, as applicable, under the Securities Act.

   (g) Amendments and Supplements to the Prospectus and Other Securities Act Matters. If any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus so that the Prospectus does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if in the opinion of counsel for the Underwriters and counsel for the Company it is otherwise necessary to amend or supplement the Prospectus to comply with applicable law, including the Securities Act, the Company agrees (subject to Sections 3(A)(b) and 3(A)(c)) to promptly prepare, file with the Commission and furnish at its own expense to the Underwriters and to dealers, amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with applicable law including the Securities Act. Neither the Representative’s lack of objection to, nor the delivery of, any such amendment or supplement shall constitute a waiver of any of the Company’s obligations under Sections 3(A)(b) or 3(A)(c).

   (h) Blue Sky Compliance. The Company shall cooperate with the Representative and counsel for the Underwriters to qualify or register the Offered Shares for sale under (or obtain exemptions from the application of) the state securities or blue sky laws or Canadian provincial securities laws of those jurisdictions designated by the Representative, shall comply with such laws and shall continue such qualifications, registrations and exemptions in effect so long as required for the distribution of the Offered Shares; provided that the Company shall not be required to qualify as a foreign corporation or to take any action that would subject it to general service of process in any such jurisdiction where it is not presently

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qualified or where it would be subject to taxation as a foreign corporation. The Company will advise the Representative promptly of the suspension of the qualification or registration of (or any such exemption relating to) the Offered Shares for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, the Company shall use its best efforts to obtain the withdrawal thereof as promptly as practicable.

     (i) Use of Proceeds. The Company shall apply the net proceeds from the sale of the Offered Shares sold by it in the manner described under the caption “Use of Proceeds” in each Applicable Prospectus.

     (j) Transfer Agent. The Company shall engage and maintain, at its expense, a registrar and transfer agent for the Shares.

     (k) Earnings Statement. As soon as practicable, but in any event no later than twelve months after the date of this Agreement, the Company will make generally available to its security holders and to the Representative an earnings statement (which need not be audited) covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the date of this Agreement which shall satisfy the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder.

     (l) Exchange Act Compliance. Until such time as the Underwriters are no longer required to deliver a Prospectus in order to confirm sales of the Offered Shares, the Company shall file all documents required to be filed with the Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act in the manner and within the time periods required by the Exchange Act.

     (m) Listing. The Company will use its best efforts to list, subject to notice of issuance, the Shares on the New York Stock Exchange and to maintain the listing of the Shares on the New York Stock Exchange.

     (n) Agreement Not to Offer or Sell Additional Shares. During the period commencing on and including the date hereof and ending on and including the 180th day following the date of the Prospectus (as the same may be extended as described below, the “Lock-up Period”), the Company will not, without the prior written consent of Jefferies (which consent may be withheld at the sole discretion of Jefferies), directly or indirectly, sell (including, without limitation, any short sale), offer, contract or grant any option to sell, pledge, transfer or establish an open “put equivalent position” within the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or transfer, or announce the offering of, or file any registration statement under the Securities Act in respect of, any Shares, options, rights or warrants to acquire Shares or securities exchangeable or exercisable for or convertible into Shares (other than as contemplated by this Agreement with respect to the Offered Shares) or publicly announce the intention to do any of the foregoing; provided, however, that (i) the Company may issue Shares or options to purchase Shares, or issue Shares upon exercise of options, pursuant to any stock option, stock bonus or other stock plan or arrangement described in each Applicable Prospectus and (ii) the Company may issue Shares in connection with the acquisition of the assets of, or a majority or controlling portion of the equity of, or a joint venture with another entity in connection with the acquisition by the

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Company or any of its subsidiaries of such entity if (x) the aggregate number of shares issued pursuant to this clause (ii), considered individually and together with all such previous acquisitions or joint ventures, if any, announced during the 180-day restricted period shall not exceed 10.0% of the Shares issued and outstanding as of the date of such acquisition agreement or joint venture agreement, as the case may be, and (y) each person receiving shares pursuant to this clause (ii) enters into an agreement in the form of Exhibit B hereto for the balance of the Lock-up Period. Notwithstanding the foregoing, if (i) during the last 17 days of the Lock-up Period, the Company issues an earnings release or material news or a material event relating to the Company occurs or (ii) prior to the expiration of the Lock-up Period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the Lock-up Period, then in each case the Lock-up Period will be extended until the expiration of the 18-day period beginning on the date of the issuance of the earnings release or the occurrence of the material news or material event, as applicable, unless Jefferies waives, in writing, such extension (which waiver may be withheld at the sole discretion of Jefferies). The Company will provide the Representative with prior notice of any such announcement that gives rise to an extension of the Lock-up Period.

     (o) No Stabilization or Manipulation; Compliance with Regulation M. The Company will not take, directly or indirectly, any action designed to or that might be reasonably expected to cause or result in the unlawful stabilization or manipulation of the price of the Shares or any other reference security, whether to facilitate the sale or resale of the Offered Shares or otherwise, and the Company will, and shall cause each of its affiliates to, comply with all applicable provisions of Regulation M.

     (p) Existing Lock-Up Agreements. The Company will direct the transfer agent to place stop transfer restrictions upon any such securities of the Company that are bound by “lock-up” agreements entered into by the Company’s securityholders, officers and directors pursuant to Section 6(k)

     (q) Lock-Up Agreement Release or Waiver. If Jefferies & Company, Inc. in their sole discretion, agree to release or waive the restrictions set forth in the lock-up agreement for an officer or director of the Company and provides the Company with notice of the impending release or waiver at least three business days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit C hereto through a major news service at least two business days before the effective date of the release or waiver.

     B. Covenants of the Selling Stockholders. Each Selling Stockholder further covenants and agrees with each Underwriter:

     (a) No Stabilization or Manipulation; Compliance with Regulation M. Such Selling Stockholder will not take, directly or indirectly, any action designed to or that might be reasonably expected to cause or result in the unlawful stabilization or manipulation of the price of the Shares or any other reference security, whether to facilitate the sale or resale of the Offered Shares or otherwise, and such Selling Stockholder will, and shall cause each of its affiliates to, comply with all applicable provisions of Regulation M.

     (b) Delivery of Forms W-8 and W-9. To deliver to the Representative prior to the First Closing Date a properly completed and executed United States Department of the Treasury

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Form W-8 (if the Selling Stockholder is a non-United States person) or Form W-9 (if the Selling Stockholder is a United States Person).

     C. Waiver. Jefferies, on behalf of the several Underwriters, may, in its sole discretion, waive in writing the performance by the Company or any Selling Stockholder of any one or more of the foregoing covenants or extend the time for their performance.

     Section 4. Payment of Expenses. The Company agrees to pay all costs, fees and expenses incurred in connection with the performance of the Company’s and the Selling Stockholders’ respective obligations hereunder and in connection with the transactions contemplated hereby, including without limitation (i) all expenses incident to the issuance and delivery of the Offered Shares (including all printing and engraving costs), (ii) all fees and expenses of the registrar and transfer agent of the Shares, (iii) all necessary issue, transfer and other stamp taxes in connection with the issuance and sale of the Offered Shares to the Underwriters, (iv) all fees and expenses of the Company’s counsel, independent public or certified public accountants and other advisors, (v) all costs and expenses incurred in connection with the preparation, printing, filing, shipping and distribution of the Registration Statement (including financial statements, exhibits, schedules, consents and certificates of experts), the Time of Sale Prospectus, the Prospectus, any free writing prospectus prepared by or on behalf of, used by, or referred to by the Company, and each preliminary prospectus, and all amendments and supplements thereto, and this Agreement, (vi) all filing fees, attorneys’ fees and expenses incurred by the Company or the Underwriters in connection with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Offered Shares for offer and sale under the state securities or blue sky laws or the provincial securities laws of Canada, and, if requested by the Representative, preparing and printing a “Blue Sky Survey” or memorandum and a “Canadian wrapper”, and any supplements thereto, advising the Underwriters of such qualifications, registrations, determinations and exemptions, provided that the aggregate attorneys’ fees and expenses pursuant to this clause (vi) shall not exceed $10,000 (vii) the filing fees incident to, and the reasonable fees and expenses of counsel for the Underwriters in connection with, FINRA’s review, if any, and approval of the Underwriters’ participation in the offering and distribution of the Offered Shares, (viii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Shares, including, without limitation, expenses associated with the preparation or dissemination of any electronic road show, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives, employees and officers of the Company and any such consultants, and the cost of any aircraft chartered in order to transport representatives of the Company and the Underwriters in connection with the road show, (ix) the fees and expenses associated with including the Offered Shares on the New York Stock Exchange, (x) fees and expenses of counsel and other advisors for such Selling Stockholders, (xi) expenses and taxes incident to the sale and delivery of the Offered Shares to be sold by such Selling Stockholders to the Underwriters hereunder and (xii) all other fees, costs and expenses of the nature referred to in Item 13 of Part II of the Registration Statement. Except as provided in this Section 4, Section 7, Section 8 and Section 9 hereof, the Underwriters shall pay their own expenses, including the fees and disbursements of their counsel.

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          This Section 4 shall not affect or modify any separate, valid agreement relating to the allocation of payment of expenses between the Company, on the one hand, and the Selling Stockholders, on the other hand.

     Section 5. Covenant of the Underwriters. Each Underwriter severally and not jointly, covenants with the Company (i) that, unless it obtains the prior consent of the Company and the Representative, it has not and will not use a free writing prospectus that contains “issuer information,” as defined in Rule 433, other than issuer information that is included (including through incorporation by reference) in a prospectus or free writing prospectus previously filed that relates to the Offered Shares, provided that “issuer information,” as used in this Section 6(b), shall be deemed to include information prepared by or on behalf of such Underwriter on the basis of or derived from issuer information, and (ii) not to take any action that would result in the Company being required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of such Underwriter that otherwise would not be required to be filed by the Company thereunder, but for the action of the Underwriter.

     Section 6. Conditions of the Obligations of the Underwriters. The obligations of the several Underwriters to purchase and pay for the Offered Shares as provided herein on the First Closing Date and, with respect to the Optional Shares, each Option Closing Date, shall be subject to the accuracy of the representations and warranties on the part of the Company and the Selling Stockholders set forth in Sections 1(A) and 1(B) hereof as of the date hereof and as of the First Closing Date as though then made and, with respect to the Optional Shares, as of each Option Closing Date as though then made, to the timely performance by the Company and the Selling Stockholders of their respective covenants and other obligations hereunder, and to each of the following additional conditions:

     (a) Accountant’s Comfort Letter. On the date hereof, the Representative shall have received from McGladrey & Pullen, LLP, independent registered public accounting firm for the Company, (i) a letter dated the date hereof addressed to the Underwriters, in form and substance satisfactory to the Representative, containing statements and information of the type ordinarily included in accountant’s “comfort letter” to underwriters, delivered according to Statement of Auditing Standards No. 72 (or any successor bulletin), with respect to the audited and unaudited financial statements and certain financial information contained in the Registration Statement, the Time of Sale Prospectus, each free writing prospectus, if any, and the Prospectus, and (ii) confirming that they are (A) independent public or certified public accountants as required by the Securities Act and (B) in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X.

     (b) Compliance with Registration Requirements; No Stop Order. For the period from and after effectiveness of this Agreement and prior to the First Closing Date and, with respect to the Optional Shares, each Option Closing Date:

          (i) the Company shall have filed the Prospectus with the Commission (including the information required by Rule 430A promulgated under the Securities Act) in the manner and within the time period required by Rule 424(b) under the Securities Act; or the Company shall have filed a post-effective amendment to the Registration Statement containing the information required by such Rule 430A, and such post-effective amendment shall have become effective; and

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          (ii) no stop order suspending the effectiveness of the Registration Statement, any Rule 462(b) Registration Statement, or any post-effective amendment to the Registration Statement, shall be in effect and no proceedings for such purpose shall have been instituted or threatened by the Commission.

     (c) No Material Adverse Change. For the period from and after the date of this Agreement and through and including the First Closing Date and, with respect to the Optional Shares, each Option Closing Date in the judgment of the Representative there shall not have occurred any Material Adverse Change.

     (d) Opinion and Negative Assurance Statement of Counsel for the Company. On each of the First Closing Date and each Option Closing Date the Representative shall have received the opinion (which shall include certain opinions with respect to certain individual Selling Stockholders) and negative assurance statement of Simpson Thacher & Bartlett LLP, counsel for the Company, dated as of such Closing Date, substantially in the form agreed to with counsel to the Underwriters.

     (e) Opinion of Regulatory Counsel for the Company. On each of the First Closing Date and each Option Closing Date the Representative shall have received the opinion of Hudson Cook, LLP, regulatory counsel for the Company, dated as of such Closing Date, substantially in the form agreed to with counsel to the Underwriters.

     (f) Opinion and Negative Assurance Statement of Counsel for the Underwriters. On each of the First Closing Date and each Option Closing Date the Representative shall have received the opinion and negative assurance statement of White & Case LLP, counsel for the Underwriters, in form and substance satisfactory to the Underwriters, dated as of such Closing Date.

     (g) Officers’ Certificate. On each of the First Closing Date and each Option Closing Date the Representative shall have received a written certificate executed by the Chief Executive Officer or President of the Company and the Chief Financial Officer of the Company, dated as of such Closing Date, to the effect set forth in subsection (b)(ii) of this Section 6, and further to the effect that:

          (i) for the period from and including the date of this Agreement through and including such Closing Date, there has not occurred any Material Adverse Change;

          (ii) the representations, warranties and covenants of the Company set forth in Section 1(A) of this Agreement are true and correct with the same force and effect as though expressly made on and as of such Closing Date; and

          (iii) the Company has complied in all material respects with all the agreements hereunder and satisfied all the conditions on its part to be performed or satisfied hereunder at or prior to such Closing Date.

     (h) Bring-down Comfort Letter. On each of the First Closing Date and each Option Closing Date the Representative shall have received from McGladrey & Pullen, LLP, independent registered public accounting firm for the Company, a letter dated such date, in form and substance satisfactory to the Representative, to the effect that they reaffirm the statements made in the letter furnished by them pursuant to subsection (a) of this Section 6, except that the specified date referred to therein for the carrying out of procedures shall be no

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more than three business days prior to the First Closing Date or the applicable Option Closing Date, as the case may be.

     (i) Chief Financial Officer’s Certificate. The Representative shall have received on each of the First Closing Date and each Option Closing Date a certificate of Robert D. Barry, Executive Vice President and Chief Financial Officer, substantially in the form agreed to with counsel to the Underwriters.

     (j) Opinion of Counsel for the Selling Stockholders. On each of the First Closing Date and each Option Closing Date the Representative shall have received from (i) Jones Day, counsel for Parallel 2005 Equity Fund, LP and (ii) Simpson Thacher & Bartlett LLP, counsel for Palladium Equity Partners III, L.P., their written opinion, as counsel to each of the Selling Stockholders for whom they are acting as counsel, dated as of such First Closing Date or Option Closing Date, substantially in the form agreed to with counsel to the Underwriters.

     (k) Selling Stockholders’ Certificate. On each of the First Closing Date and each Option Closing Date the Representative shall receive a written certificate executed by the Attorney in Fact of each Selling Stockholder, dated as of such Closing Date, to the effect that:

   (i) the representations, warranties and covenants of such Selling Stockholder set forth in Section 1(B) of this Agreement are true and correct with the same force and effect as though expressly made by such Selling Stockholder on and as of such Closing Date; and

   (ii) such Selling Stockholder has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to such Closing Date.

     (l) Selling Stockholders’ Documents. On the date hereof, the Company and the Selling Stockholders shall have furnished for review by the Representative copies of the Powers of Attorney executed by each of the Selling Stockholders and such further information, certificates and documents as the Representative may reasonably request.

     (m) Lock-Up Agreement from Certain Securityholders of the Company. On or prior to the date hereof, the Company shall have furnished to the Representative an agreement in the form of Exhibit B hereto from the persons listed on Exhibit A hereto, and such agreement shall be in full force and effect on each of the First Closing Date and each Option Closing Date.

     (n) Rule 462(b) Registration Statement. In the event that a Rule 462(b) Registration Statement is filed in connection with the offering contemplated by this Agreement, such Rule 462(b) Registration Statement shall have been filed with the Commission on the date of this Agreement and shall have become effective automatically upon such filing.

     (o) Bring-Down Certificates Evidencing Qualification to do Business as a Foreign Corporation. On or before each of the First Closing Date and each Option Closing Date, the Company shall have furnished to the Representative a bring-down certificate evidencing the Company’s qualification to do business as a foreign corporation in the state of South Carolina.

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     (p) Additional Documents. On or before each of the First Closing Date and each Option Closing Date, the Representative and counsel for the Underwriters shall have received such information, documents and opinions as they may reasonably request for the purposes of enabling them to pass upon the issuance and sale of the Offered Shares as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Offered Shares as contemplated herein and in connection with the other transactions contemplated by this Agreement shall be satisfactory in form and substance to the Representative and counsel for the Underwriters.

          If any condition specified in this Section 6 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Representative by notice to the Company and the Selling Stockholders at any time on or prior to the First Closing Date and, with respect to the Optional Shares, at any time on or prior to the applicable Option Closing Date, which termination shall be without liability on the part of any party to any other party, except that Section 4, Section 6 and Section 8 shall at all times be effective and shall survive such termination.

     Section 7. Reimbursement of Underwriters’ Expenses. If this Agreement is terminated by the Representative pursuant to Section 6, Section 10, Section 11 (other than pursuant to clauses (i)(b), (ii) and (iii) thereof), or Section 18, or if the sale to the Underwriters of the Offered Shares on the First Closing Date is not consummated because of any refusal, inability or failure on the part of the Company or the Selling Stockholders to perform any agreement herein or to comply with any provision hereof, the Company agrees to reimburse the Representative and the other Underwriters (or such Underwriters as have terminated this Agreement with respect to themselves), severally, upon demand for all out-of-pocket expenses that shall have been reasonably incurred by the Representative and the Underwriters in connection with the proposed purchase and the offering and sale of the Offered Shares, including but not limited to fees and disbursements of counsel, printing expenses, travel expenses, postage, facsimile and telephone charges.

     Section 8. Indemnification.

     (a) Indemnification of the Underwriters by the Company. The Company agrees to indemnify and hold harmless each Underwriter, each of its directors, officers and employees, and each person, if any, who controls any Underwriter within the meaning of the Securities Act or the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which such Underwriter or such director, officer, employee or controlling person may become subject, under the Securities Act, the Exchange Act, other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, or any amendment thereto, including any information deemed to be a part thereof pursuant to Rule 430A under the Securities Act, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading; or (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus, the Time of Sale Prospectus, any free writing prospectus, any Road Show that the Company has used, referred to or filed, or is required to file, pursuant to Rule 433(d) of the

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Securities Act or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and to reimburse each Underwriter and each such director, officer, employee and controlling person for any and all expenses (including the reasonable fees and disbursements of counsel chosen by the Representative) as such expenses are reasonably incurred by such Underwriter or such director, officer, employee or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the foregoing indemnity agreement shall not apply to any loss, claim, damage, liability or expense (i) to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company by the Representative expressly for use in the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, any such Road Show, any such free writing prospectus or the Prospectus (or any amendment or supplement thereto), it being understood and agreed that the only such information furnished by the Representative to the Company consists of the information described in subsection (c) below or (ii) arising out of a free writing prospectus used by any Underwriter in violation of its covenant in Section 5. The indemnity agreement set forth in this Section 8(a) shall be in addition to any liabilities that the Company may otherwise have.

     (b) Indemnification of the Underwriters by the Selling Stockholders. Each Selling Stockholder agrees, severally and not jointly, to indemnify and hold harmless each Underwriter, each of its directors and employees, and each person, if any, who controls any Underwriter within the meaning of the Securities Act or the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which such Underwriter or such director, employee or controlling person may become subject, under the Securities Act, the Exchange Act, other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, or any amendment thereto, including any information deemed to be a part thereof pursuant to Rule 430A under the Securities Act, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading; or (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus, the Time of Sale Prospectus, any free writing prospectus, any Road Show that the Company has used, referred to or filed, or is required to file, pursuant to Rule 433(d) of the Securities Act or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and to reimburse each Underwriter and each such officer, employee and controlling person for any and all expenses (including the fees and disbursements of counsel chosen by the Representative) as such expenses are reasonably incurred by such Underwriter or such officer, employee or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the foregoing indemnity agreement shall only apply to the extent that any loss, claim, damage, liability or expense arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in connection with the “Selling Stockholder

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Information.” The indemnity agreement set forth in this Section 8(b) shall be in addition to any liabilities that the Selling Stockholders may otherwise have.

     (c) Indemnification of the Company, its Directors and Officers and the Selling Stockholders by the Underwriters. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, each of its directors, director nominees, each of its officers who signed the Registration Statement, the Selling Stockholders (including each of their respective directors, director nominees and officers) and each person, if any, who controls the Company or any Selling Stockholder within the meaning of the Securities Act or the Exchange Act, against any loss, claim, damage, liability or expense, as incurred, to which the Company, or any such director, director nominee, officer, Selling Stockholder (or its directors or officers) or controlling person may become subject, under the Securities Act, the Exchange Act, or other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of such Underwriter), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, or any amendment thereto, including any information deemed to be a part thereof pursuant to Rule 430A under the Securities Act, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading; or (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus, the Time of Sale Prospectus, any free writing prospectus, any Road Show that the Company has used or filed, or is required to file, pursuant to Rule 433(d) of the Securities Act or the Prospectus (or such amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, such preliminary prospectus, the Time of Sale Prospectus, such free writing prospectus, such Road Show, or the Prospectus (or such amendment or supplement thereto), in reliance upon and in conformity with written information furnished to the Company and the Selling Stockholders by the Representative expressly for use therein; and to reimburse the Company, or any such director, director nominee, officer, Selling Stockholder (or its directors or officers) or controlling person for any legal and other expense reasonably incurred by the Company, or any such director, director nominee, officer, Selling Stockholder or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action. Each of the Company and each of the Selling Stockholders, hereby acknowledges that the only information that the Representative and the Underwriters have furnished to the Company and the Selling Stockholders expressly for use in the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, any Road Show, any free writing prospectus that the Company has used, referred to or filed, or is required to file, pursuant to Rule 433(d) of the Securities Act or the Prospectus (or any amendment or supplement thereto) are the information contained in the fourth paragraph relating to market making under the caption “Underwriting (Conflicts of Interest),” the concession and reallowance figures appearing in the first paragraph under the caption “Underwriting (Conflicts of Interest)—Commission and Expenses,” the information contained in the first paragraph under the caption “Underwriting (Conflicts of Interest)—Stabilization” relating to stabilization transactions and the information in the first paragraph under the caption “Underwriting (Conflicts of Interest)—Electronic Distribution” relating to

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electronic distribution. The indemnity agreement set forth in this Section 8(c) shall be in addition to any liabilities that each Underwriter may otherwise have.

     (d) Notifications and Other Indemnification Procedures. Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof, but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party (i) for contribution, (ii) otherwise than under the indemnity agreement contained in this Section 8 or (iii) to the extent it is not prejudiced as a proximate result of such failure. In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that a conflict may arise between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select one separate counsel (in addition to any local counsel) to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying party’s election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 8 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the reasonable fees and expenses of more than one separate counsel (together with local counsel), representing the indemnified parties who are parties to such action), which counsel (together with any local counsel) for the indemnified parties shall be selected by the Representative (in the case of counsel for the indemnified parties referred to in Section 8(a) above), by the Selling Stockholders (in the case of counsel for the indemnified parties referred to in Section 8(b) above) or by the Company (in the case of counsel for the indemnified parties referred to in Section 8(c) above), (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action or (iii) the indemnifying party has authorized in writing the employment of counsel for the indemnified party at the expense of the indemnifying party, in each of which cases the reasonable fees and expenses of counsel shall be at the expense of the indemnifying party and shall be paid as they are incurred.

     (e) Settlements. The indemnifying party under this Section 8 shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any

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time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for reasonable fees and expenses of counsel as contemplated by Section 8(d) hereof, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 60 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement and (iii) such indemnified party shall have given the indemnifying party at least 30 days’ prior notice of its intention to settle. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity was or could have been sought hereunder by such indemnified party, unless such settlement, compromise or consent includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding.

     Section 9. Contribution. If the indemnification provided for in Section 8 is for any reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any losses, claims, damages, liabilities or expenses referred to therein (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Selling Stockholders, on the one hand, and the Underwriters, on the other hand, from the offering and sale of the Offered Shares pursuant to this Agreement or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Selling Stockholders, on the one hand, and the Underwriters, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Selling Stockholders, on the one hand, and the Underwriters, on the other hand, in connection with the offering of the Offered Shares pursuant to this Agreement shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Offered Shares pursuant to this Agreement (meaning after the deduction of underwriting discounts and commissions but before the deduction of any other expenses) received by the Company and the Selling Stockholders, and the total underwriting discounts and commissions received by the Underwriters, in each case as set forth on the front cover page of the Prospectus bear to the aggregate initial public offering price of the Offered Shares as set forth on such cover. The relative fault of the Company and the Selling Stockholders, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Selling Stockholders, on the one hand, or the Underwriters, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

          The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 8(d), any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The

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provisions set forth in Section 8(d) with respect to notice of commencement of any action shall apply if a claim for contribution is to be made under this Section 9; provided, however, that no additional notice shall be required with respect to any action for which notice has been given under Section 8(d) for purposes of indemnification.

          The Company, the Selling Stockholders and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 9.

          Notwithstanding the provisions of Section 8 or this Section 9, (i) no Underwriter shall liable for, or be required to contribute, any amount in excess of the underwriting discounts and commissions received by such Underwriter in connection with the Offered Shares underwritten by it and distributed to the public, and (ii) no Selling Stockholder shall be liable for, or required to contribute, any amount in excess of the net proceeds from the offering (meaning after the deduction of underwriting discounts and commissions but before the deduction of any other expenses) received by such Selling Stockholder, in each case, pursuant to Sections 8 or 9. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to this Section 9 are several, and not joint, in proportion to their respective underwriting commitments as set forth opposite their respective names on Schedule A. For purposes of this Section 9, each officer and employee of an Underwriter and each person, if any, who controls an Underwriter within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as such Underwriter, and each director and director nominee of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as the Company and each person, if any, who controls a Selling Stockholder within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as such Selling Stockholder.

     Section 10. Default of One or More of the Several Underwriters. If, on the First Closing Date or the applicable Option Closing Date, as the case may be, any one or more of the several Underwriters shall fail or refuse to purchase Offered Shares that it or they have agreed to purchase hereunder on such date, and the aggregate number of Offered Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase does not exceed 10% of the aggregate number of the Offered Shares to be purchased on such date, the Representative may make arrangements satisfactory (i) to the Company for the purchase of the Firm Shares and (ii) the Selling Stockholders holding a majority of the Optional Shares for the purchase of such Optional Shares, by other persons, including any of the Underwriters, but if no such arrangements are made by such Closing Date, the other Underwriters shall be obligated, severally and not jointly, in the proportions that the number of Firm Shares set forth opposite their respective names on Schedule A bears to the aggregate number of Firm Shares set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as may be specified by the Representative with the consent of the non-defaulting Underwriters, to purchase the Offered Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date. If, on the First Closing Date or the applicable Option Closing Date, as the case may be, any one or

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more of the Underwriters shall fail or refuse to purchase Offered Shares and the aggregate number of Offered Shares with respect to which such default occurs exceeds 10% of the aggregate number of Offered Shares to be purchased on such date, and arrangements satisfactory to the Representative and the Company for the purchase of such Offered Shares are not made within 48 hours after such default, this Agreement shall terminate without liability of any party to any other party except that the provisions of Section 4, Section 7, Section 8 and Section 9 shall at all times be effective and shall survive such termination. In any such case either the Representative or the Company shall have the right to postpone the First Closing Date or the applicable Option Closing Date, as the case may be, but in no event for longer than seven days in order that the required changes, if any, to the Registration Statement and the Prospectus or any other documents or arrangements may be effected.

          As used in this Agreement, the term “Underwriter” shall be deemed to include any person substituted for a defaulting Underwriter under this Section 10. Any action taken under this Section 10 shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.

     Section 11. Termination of This Agreement. Prior to the purchase of the Firm Shares by the Underwriters on the First Closing Date this Agreement may be terminated by the Representative by notice given to the Company and the Selling Stockholders if at any time (i)(a) trading or quotation in any of the Company’s securities shall have been suspended or limited by the Commission or by the New York Stock Exchange, or (b) trading in securities generally on the Nasdaq Stock Market or the New York Stock Exchange shall have been suspended or limited, or minimum or maximum prices shall have been generally established on either of such stock exchanges by the Commission or FINRA; (ii) a general banking moratorium shall have been declared by any of federal, New York or Delaware authorities; (iii) there shall have occurred any outbreak or escalation of national or international hostilities or any crisis or calamity, or any change in the United States or international financial markets, or any substantial change or development involving a prospective substantial change in United States’ or international political, financial or economic conditions, as in the judgment of the Representative is material and adverse and makes it impracticable to market the Offered Shares in the manner and on the terms described in the Time of Sale Prospectus or the Prospectus or to enforce contracts for the sale of securities; (iv) in the judgment of the Representative there shall have occurred any Material Adverse Change; or (v) the Company shall have sustained a loss by strike, fire, flood, earthquake, accident or other calamity of such character as in the judgment of the Representative may interfere materially with the conduct of the business and operations of the Company regardless of whether or not such loss shall have been insured. Any termination pursuant to this Section 11 shall be without liability on the part of (a) the Company or the Selling Stockholders to any Underwriter, except that the Company and the Selling Stockholders shall be obligated to reimburse the expenses of the Representative and the Underwriters pursuant to Sections 4 and 7 hereof, (b) any Underwriter to the Company or the Selling Stockholders, or (c) of any party hereto to any other party except that the provisions of Section 8 and Section 9 shall at all times be effective and shall survive such termination.

     Section 12. No Advisory or Fiduciary Relationship. The Company acknowledges and agrees that (a) the purchase and sale of the Offered Shares pursuant to this Agreement, including the determination of the public offering price of the Offered Shares and any related discounts and commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and the several Underwriters, on the other hand, (b) in connection

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with the offering contemplated hereby and the process leading to such transaction each Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of the Company, or its stockholders, creditors, employees or any other party, (c) no Underwriter has assumed or will assume an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company on other matters) and no Underwriter has any obligation to the Company with respect to the offering contemplated hereby except the obligations expressly set forth in this Agreement, (d) the Underwriters and their respective affiliates may be engaged in a broad range of transactions which involve interests that differ from those of the Company, and (e) the Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the offering contemplated hereby and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.

     Section 13. Representations and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties and other statements of the Company, of its officers, of the Selling Stockholders and of the several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or any of its or their partners, officers or directors or any controlling person, or the Selling Stockholders, as the case may be, and, anything herein to the contrary notwithstanding, will survive delivery of and payment for the Offered Shares sold hereunder and any termination of this Agreement.

     Section 14. Notices. All communications hereunder shall be in writing and shall be mailed, hand delivered or telecopied and confirmed to the parties hereto as follows:

If to the Representative:

Jefferies & Company, Inc.
520 Madison Avenue
New York, New York 10022
Facsimile: (212) 284-2280
Attention: General Counsel

with a copy to:

White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Facsimile: (212) 354-8113
Attention: Colin Diamond, Esq.

If to the Company:

Regional Management Corp.
509 West Butler Road
Greenville, SC 29607
Facsimile: (864) 422-8035
Attention: Thomas F. Fortin

with a copy to:

Simpson Thacher & Bartlett LLP

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425 Lexington Avenue
New York, New York 10017
Facsimile: (212) 445-2502
Attention: Lesley Peng, Esq.

If to Parallel 2005 Equity Fund, LP:

c/o Parallel Investment Partners, LP
2100 McKinney Avenue, Suite 1200
Dallas, Texas 75201
Facsimile: (214) 740-3630
Attention: F. Barron Fletcher, III

with a copy to:

Jones Day
2727 N. Harwood Street
Dallas, Texas 77201
Facsimile: (214) 220-3939
Attention: Charles T. Haag

If to Palladium Equity Partners III, L.P.

1270 Avenue of the Americas, 22nd Floor
New York, New York, 10020
Facsimile: (212) 218-3155
Attention: David Perez and Erik A. Scott

with a copy to:

Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Facsimile: (212) 445-2502
Attention: Lesley Peng, Esq.

If to Connected Capital Venture V, LP:

Alan Shor
Retail Connection, L.P.
2525 McKinney St., Suit 700
Dallas, Texas 75201

If to the Other Selling Stockholders:

Richard A. Godley, Sr.
2824 Knighton Chapel Road
Fountain Inn, South Carolina 29644

with a copy to:

Wyche, P.A.
44 East Camperdown Way
Greenville, South Carolina 29601-3512
Facsimile: (864) 298-3927
Attention: Eric K. Graban

Any party hereto may change the address for receipt of communications by giving written notice to the others.

     Section 15. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto, including any substitute Underwriters pursuant to Section 10 hereof, and to the benefit of the employees, officers, directors, director nominees, managers and

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controlling persons referred to in Section 8 and Section 9, and in each case their respective successors, and personal representatives, and no other person will have any right or obligation hereunder. The term “successors” shall not include any purchaser of the Offered Shares as such from any of the Underwriters merely by reason of such purchase.

     Section 16. Partial Unenforceability. The invalidity or unenforceability of any Section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other Section, paragraph or provision hereof. If any Section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.

     Section 17. Governing Law Provisions. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to agreements made and to be performed in such state. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of the United States of America located in the Borough of Manhattan in the City of New York or the courts of the State of New York in each case located in the Borough of Manhattan in the City of New York (collectively, the “Specified Courts”), and each party irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any such court (a “Related Judgment”), as to which such jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit, action or other proceeding brought in any such court has been brought in an inconvenient forum. Each party not located in the United States irrevocably appoints CT Corporation System, which currently maintains a New York City office at 111 Eighth Avenue, 13th Floor, New York, NY 10011, United States of America, as its agent to receive service of process or other legal summons for purposes of any such suit, action or proceeding that may be instituted in any state or federal court in the Borough of Manhattan in the City of New York.

     Section 18. Failure of One or More of the Selling Stockholders to Sell and Deliver Offered Shares. If one or more of the Selling Stockholders shall fail to sell and deliver to the Underwriters the Offered Shares to be sold and delivered by such Selling Stockholders at the First Closing Date pursuant to this Agreement, then the Underwriters may at their option, by written notice from the Representative to the Company and the Selling Stockholders, either (i) terminate this Agreement without any liability on the part of any Underwriter or, except as provided in Sections 4, 7, 8 and 9 hereof, the Company or the other Selling Stockholders, or (ii) purchase the shares which the Company and other Selling Stockholders have agreed to sell and deliver in accordance with the terms hereof. If one or more of the Selling Stockholders shall fail to sell and deliver to the Underwriters the Offered Shares to be sold and delivered by such Selling Stockholders pursuant to this Agreement at the First Closing Date or the applicable Option Closing Date, then the Underwriters shall have the right, by written notice from the Representative to the Company and the Selling Stockholders, to postpone the First Closing Date or the applicable Option Closing Date, as the case may be, but in no event for longer than seven days in order that the required changes,

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if any, to the Registration Statement and the Prospectus or any other documents or arrangements may be effected.

     Section 19. General Provisions. This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof. This Agreement may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit. The Section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement.

          Each of the parties hereto acknowledges that he, she or it was represented by counsel during negotiations regarding the provisions hereof, including, without limitation, the indemnification provisions of Section 8 and the contribution provisions of Section 9, and believes that he, she or it is fully informed regarding said provisions. Each of the parties hereto further acknowledges that the provisions of Sections 8 and 9 hereto fairly allocate the risks in light of the ability of the parties to investigate the Company, its affairs and its business in order to assure that adequate disclosure has been made in the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, each Road Show, each free writing prospectus and the Prospectus (and any amendments and supplements thereto), as required by the Securities Act and the Exchange Act.

36

          If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to the Representative and the Company the enclosed copies hereof, whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms.

Very truly yours,

REGIONAL MANAGEMENT CORP.

By:

PARALLEL 2005 EQUITY FUND, LP
By:
	Name:
	Title:

PALLADIUM EQUITY PARTNERS III, L.P.
By:	Palladium Capital Management III, L.L.C.,
	its Advisor
By:
	Name:
	Title:

THE OTHER SELLING STOCKHOLDERS NAMED IN SCHEDULE B TO THIS AGREEMENT

By:
	(Attorney-in-fact)

37

          The foregoing Underwriting Agreement is hereby confirmed and accepted by the Representative in New York, New York as of the date first above written.

JEFFERIES & COMPANY, INC.
Acting as Representative of the
several Underwriters named in
the attached Schedule A.

By JEFFERIES & COMPANY, INC.

By:                                                             

38

SCHEDULE A

	Number of
	Firm Shares
Underwriters	to be Purchased
Jefferies & Company, Inc.
Stephens Inc.
BMO Capital Markets Corp.
JPM Securities LLC
Total

SCHEDULE B

		Maximum
	Number of	Number of
	Firm Shares	Optional Shares
Selling Stockholder	to be Sold	to be Sold
Palladium Equity Partners III, L.P.
Parallel 2005 Equity Fund, LP
Jerry L. Shirley
The Richard A. Godley, Sr. Revocable Trust
C. Glynn and Sherri Quattlebaum
Brenda F. Kinlaw
Denise Godley
William T. Godley
Vanessa Bailey Godley
Jesse W. Geddings
Connected Capital Venture V, LP
Total:

EX-10.2

Exhibit 10.2

EXECUTION VERSION

FOURTH AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT

Dated as of January 18, 2012

Among

THE FINANCIAL INSTITUTIONS NAMED HEREIN

as the Lenders

and

BANK OF AMERICA, N.A.

as the Agent

and

REGIONAL MANAGEMENT CORP.,
REGIONAL FINANCE CORPORATION OF SOUTH CAROLINA,
REGIONAL FINANCE CORPORATION OF GEORGIA,
REGIONAL FINANCE CORPORATION OF TEXAS,
REGIONAL FINANCE CORPORATION OF NORTH CAROLINA,
REGIONAL FINANCE CORPORATION OF ALABAMA, and
REGIONAL FINANCE CORPORATION OF TENNESSEE

as the Borrowers

NEWYORK/FOURTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (REGIONAL)/141113.16

FOURTH AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT

     This Fourth Amended and Restated Loan and Security Agreement (“Agreement”) is made and entered into as of January 18, 2012, among the financial institutions listed on the signature pages hereof (such financial institutions, together with their respective successors and assigns, are referred to hereinafter each individually as a “Lender” and collectively as the “Lenders”), Bank of America, N.A., a national banking association (“Bank of America”), having an address at 335 Madison Avenue, New York, New York 10017 (Fax: (212) 503-7340), as agent for the Lenders (in its capacity as agent, the “Agent”), and Regional Management Corp., a Delaware corporation, formerly known as Regional Management Corp., a South Carolina corporation (“Regional”), Regional Finance Corporation of South Carolina, a South Carolina corporation (“RFCSC”), Regional Finance Corporation of Georgia, a Georgia corporation (“RFCG”), Regional Finance Corporation of Texas, a Texas corporation (“RFCTX”), Regional Finance Corporation of North Carolina, a North Carolina corporation (“RFCNC”), Regional Finance Corporation of Alabama, an Alabama corporation (“RFCA”) and Regional Finance Corporation of Tennessee, a Tennessee corporation (“RFCTN”; together with Regional, RFCSC, RFCG, RFCTX, RFCNC, RFCA and RFCTN are herein individually referred to as a “Borrower” and collectively referred to as the “Borrowers”), whose chief executive offices are located at 509 West Butler Road, Greenville, South Carolina 29607 (with a mailing address of Post Office Box 776, Mauldin, South Carolina 29662 (Fax: (864) 422-8035 with a copy to (212) 218-5155 and (214) 740-3630).

RECITALS

     A. The Borrowers, the lenders party thereto (the “Original Lenders”), and Bank of America, as agent for the Original Lenders, are parties to that certain Third Amended and Restated Loan and Security Agreement, dated as of March 21, 2007, as heretofore amended or otherwise modified (the “Existing Loan Agreement”), whereby Bank of America, as agent for the Original Lenders, and the Original Lenders agreed to make revolving loans, letters of credit and other financial accommodations available to the Borrowers.

     B. The Borrowers, the Agent, and the Lenders have agreed to enter into this Agreement in order to amend and restate the Existing Loan Agreement and related documents in their entireties on the terms and conditions set forth herein.

     C. On August 23, 2011, Regional Management Corp., a South Carolina corporation, reincorporated in Delaware, and, as such reincorporated entity, confirms, reaffirms, ratifies all of its obligations under the Existing Loan Agreement and related documents.

     D. The Borrowers have agreed to continue to secure all of their obligations under the Loan Documents by granting to Agent, for the benefit of Agent and Lenders, a security interest in and lien upon all of their existing and after-acquired personal property constituting Collateral hereunder.

     E. It is the intent of the parties hereto that this Agreement (i) shall re-evidence the Borrowers’ indebtedness to the Lenders under the Existing Loan Agreement, (ii) is entered into in substitution for, and not in payment of, the obligations of the Borrowers under the Existing

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Loan Agreement, and (iii) is in no way intended to constitute a novation of the Borrowers’ indebtedness which was evidenced by the Existing Loan Agreement.

     NOW THEREFORE, in consideration of the mutual covenants contained herein, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Existing Loan Agreement is hereby amended and restated to read in its entirety as provided for in this Agreement, and the parties further agree as follows:

SECTION ONE DEFINITIONS; INTERPRETATION OF THIS AGREEMENT

     1.1 Terms Defined. As used in this Agreement, the listed terms are defined as follows:

     1^st Community Asset Purchase Agreement shall mean that certain Asset Purchase Agreement dated on or about the date hereof, among RFCA, as buyer, 1^st Community Credit Corporation and Superior Financial Services, LLC, as sellers, and Cadence Bank, N.A., as parent.

     1^st Community Acquisition shall mean the acquisition by RCFA of the assets and assumption of certain liabilities of the sellers pursuant to the 1^st Community Asset Purchase Agreement.

     Accounting Change means changes in GAAP, or the accounting principles required by the promulgation of any rule, regulation, pronouncement, or opinion by the Financial Accounting Standards Board, the American Institute of Certified Public Accountants or, if applicable, the Securities and Exchange Commission.

     ACH Transactions shall mean any cash management or related services including the automatic clearing house transfer of funds by Bank of America for the account of Borrower pursuant to agreement or overdrafts.

     Adjusted Net Income shall mean, with respect to any fiscal period of Borrowers, the Net Income before provision for income taxes for such fiscal period (to the extent taxes are not already added back in the calculation of Net Income).

     Adjusted Tangible Assets shall mean all assets except: (a) trademarks, tradenames, franchises, goodwill, and other similar intangibles; (b) assets located and notes and receivables due from obligors domiciled outside the United States of America, Puerto Rico, or Canada; and (c) accounts, notes, and other receivables due from Affiliates or employees of Borrowers.

     Adjusted Tangible Net Worth shall mean the remainder of (a) net book value (after deducting related depreciation, obsolescence, amortization, valuation, and other proper reserves) at which the Adjusted Tangible Assets of Borrowers would be shown on a balance sheet at such date, but excluding any amounts arising from write-ups of assets, minus (b) the amount at which its liabilities (other than capital stock, surplus, and retained earnings) would be shown on such balance sheet, and including as liabilities all reserves for contingencies and other potential liabilities, as determined in accordance with GAAP, and as adjusted pursuant to Paragraph 8.11.

     Advance shall mean the proceeds of the Loan advanced from time to time by Lenders to Borrowers in accordance with the terms of this Agreement.

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     Advance Rate shall mean eighty-five percent (85%); provided, however, that the Advance Rate, effective as of the first day of each month, shall be (a) eighty-four percent (84%) when the Collateral Adjustment Percent calculated as of such date is equal to or greater than fifteen percent (15%) but less than sixteen percent (16%), (b) eighty-three percent (83%) when the Collateral Adjustment Percent calculated as of such date is equal to or greater than sixteen percent (16%) but less than seventeen percent (17%), (c) eighty-two percent (82%) when the Collateral Adjustment Percent calculated as of such date is equal to or greater than seventeen percent (17%) but less than eighteen percent (18%), (d) eighty-one percent (81%) when the Collateral Adjustment Percent calculated as of such date is equal to or greater than eighteen percent (18%) but less than nineteen percent (19%) and (e) eighty percent (80%) when the Collateral Adjustment Percent calculated as of such date is equal to or greater than nineteen percent (19%) but less than twenty percent (20%).

     Affiliate shall mean, as to any Person, (a) any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person; (b) any other Person who beneficially owns or holds, directly or indirectly, ten percent or more of any class of voting stock of such Person; or (c) any other Person, ten percent or more of any class of the voting stock (or if such other Person is not a corporation, ten percent or more of the equity interest) of which is beneficially owned or held, directly or indirectly, by such Person. The term control (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the Person in question.

     Agent shall mean Bank of America, N.A., solely in its capacity as agent for the Lenders, and any successor agent.

     Agent Advances shall have the meaning specified in subparagraph 2.2(i).

     Agent’s Expenses shall have the meaning specified in subparagraph 13.1.

     Agent’s Liens shall mean the Liens in the Collateral granted to the Agent, for the ratable benefit of the Lenders, Bank of America and the Agent pursuant to this Agreement and the other Loan Documents.

     Agent-Related Persons shall mean the Agent, together with its Affiliates, and the officers, directors, employees, agents and attorneys-in-fact of the Agent and such Affiliates.

     Agreement shall mean this Fourth Amended and Restated Loan and Security Agreement, as the same may be amended, supplemented or otherwise modified in accordance with the terms hereof.

     Applicable Margin shall mean:

     (i) prior to the consummation of the Approved IPO: with respect to Base Rate Revolving Loans and LIBOR Revolving Loans, the margins set forth below, as determined by the Borrowing Base Ratio for the last calendar month:

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	Borrowing	Base Rate			LIBOR
	Base	Revolver			Revolver
Level	Ratio	Loans			Loans
I	> 2.75 to 1.00		2.50	%		3.50	%
II	< 2.75 to 1.00		2.25	%		3.25	%

Until February 1, 2012, margins shall be determined as if Level II were applicable. Thereafter, the margins shall be subject to increase or decrease upon determination and confirmation by Agent of the Borrowing Base Ratio provided by Borrower in the financial statements delivered pursuant to Section 9.1 hereof for the preceding calendar month, which change shall be effective on the first day of the calendar month following receipt such financial statements. If, by the first day of a month, the financial statements due in the preceding calendar month have not been received, then the margins shall be determined as if Level I were applicable, from such day until the first day of the calendar month following actual receipt; and

     (ii) upon and after the consummation of the Approved IPO, with respect to Base Rate Revolving Loans, 2.00%, and with respect to LIBOR Revolving Loans, 3.00%.

     With respect to the determination of the Applicable Margin prior to the consummation of the IPO, if, as a result of any restatement of or other adjustment to the financial statements of the Borrowers or for any other reason, the Borrowers or the Lenders determine that (i) the Leverage Ratio as calculated by the Borrowers as of any applicable date was inaccurate and (ii) a proper calculation of the Borrowing Base Ratio would have resulted in higher pricing for such period, the Borrowers shall immediately and retroactively be obligated to pay to the Agent for the account of the applicable Lenders, promptly on demand by the Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to the Borrowers under the Bankruptcy Code of the United States, automatically and without further action by the Agent, any Lender or the L/C Issuer), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period. This paragraph shall not limit the rights of the Agent, any Lender or the L/C Issuer, as the case may be, under this Agreement. The Borrowers’ obligations under this paragraph shall survive the termination of the Aggregate Commitment and the repayment of all other Obligations hereunder.

     Approved IPO shall have the meaning ascribed to it in Section 8.18(a) hereof.

     Assigned Contracts shall mean, collectively, all of the Borrowers’ rights and remedies under, and all moneys and claims for money due or to become due to the Borrowers, including without limitation, under the 1^st Community Asset Purchase Agreement, and any and all amendments, supplements, extensions, renewals, and other modifications thereof including all rights and claims of the Borrowers now or hereafter existing: (a) under any insurance, indemnities, warranties, and guaranties provided for or arising out of or in connection with any of the foregoing agreements; (b) for any damages arising out of or for breach or default under or in connection with any of the foregoing contracts; (c) to all other amounts from time to time paid or

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payable under or in connection with any of the foregoing agreements; or (d) to exercise or enforce any and all covenants, remedies, powers, and privileges thereunder.

     Assignee shall have the meaning specified in subparagraph 11.2(a).

     Assignment and Acceptance shall have the meaning specified in subparagraph 11.2(a).

     Attorney Costs shall mean and include all reasonable fees, expenses and disbursements of any law firm or other counsel engaged by the Agent, the reasonable allocated costs of internal legal services of the Agent and the reasonable expenses of internal counsel to the Agent.

     Availability shall mean, as of the date of determination, an amount, less the sum of the Bank Borrowing Reserve and the Bank Product Reserve and less the aggregate undrawn face amount of all outstanding Letters of Credit which the Agent has caused to be issued or obtained for the Borrowers’ accounts, equal to an amount determined by multiplying (i) the Advance Rate by (ii) the remainder of (x) the aggregate amount of all presently due and future, unpaid, noncancellable installment payments to be made under all of Borrowers’ Eligible Contracts, minus (y) the sum of all properly calculated, unearned finance charges, unearned acquisition/initial charges, unearned maintenance fees, unearned discounts and dealer reserves included therein. Notwithstanding the foregoing, for the purpose of calculating Availability, (i) the maximum amount of Mortgage Loans, which have an amount financed of $15,000.00 or more, outstanding at any time shall not exceed fifteen percent (15%) of all Contracts then outstanding, (ii) the maximum amount of Contracts outstanding at any time which are secured by a mobile home shall not exceed $400,000.00 and (iii) the maximum amount of Contracts outstanding at any time which have an annual percentage rate of seventeen percent (17%) or less and an original amount financed of more than $15,000.00 shall not exceed five percent (5%) of all Contracts then outstanding.

     Bank Borrowing Reserve shall mean the amount that a Borrower has, at the time of calculation, borrowed from any financial institution if the terms of the applicable credit agreement with the financial institution require such Borrower to maintain any Excess Availability under this Agreement or otherwise condition the borrowing on the existence or continuation of this Agreement.

     Bank of America shall mean Bank of America, N.A. and any successors or assigns thereof.

     Bank Product Obligations shall mean all debts, liabilities and obligations now owed or hereafter arising from or in connection with Bank Products.

     Bank Product Reserves shall mean all reserves for the Bank Products then provided or outstanding which the Agent from time to time establishes in its reasonable discretion, or which the Agent establishes at the direction of one or more Lenders if and for so long as Hypothetical Availability is 10% or less of the sum of (i) the aggregate outstanding amount of all Revolving Loans and Pending Revolving Loans, plus (ii) the aggregate undrawn face amount of all outstanding Letters of Credit which the Agent has caused to be issued or obtained for the Borrowers’ accounts.

     Bank Products shall mean any one or more of credit cards services, ACH Transactions, Hedge Agreements and Cash Management Services extended by either (i) Bank of America or

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any affiliate of Bank of America in reliance on Bank of America’s agreement to indemnify such affiliate, or (ii) in Agent’s sole, but reasonable discretion, other Lenders.

     Base Rate for any day, a per annum rate equal to the greater of (a) the Prime Rate for such day; (b) the Federal Funds Rate for such day, plus 0.50%; or (c) LIBOR for a 30 day interest period as determined on such day, plus 1.0%.

     Base Rate Revolving Loan shall mean a Revolving Loan during any period in which it bears interest at the Base Rate.

     Borrower and Borrowers shall have the respective meaning ascribed thereto in the preamble to this Agreement.

     Borrowing shall mean a borrowing hereunder consisting of Revolving Loans made on the same day by Lenders to Borrowers, or by Bank of America in the case of a Borrowing funded by Non-Ratable Loans, or by the Agent in the case of a Borrowing consisting of an Agent Advance, or the issuance of Letters of Credit hereunder.

     Borrowing Base shall mean the sum of the Adjusted Tangible Net Worth of Borrowers, plus all Subordinated Debt of Borrowers.

     Borrowing Base Certificate shall have the meaning set forth in Paragraph 5.2(e).

     Bulk Purchase shall mean a purchase of Contracts from any one seller, in a single transaction or as part of an integrated series of transactions.

     Business Day shall mean (a) any day that is not a Saturday, Sunday, or a day on which banks in Charlotte, North Carolina or New York, New York, are required or permitted to be closed, and (b) with respect to all notices, determinations, fundings and payments in connection with the LIBOR Rate or LIBOR Revolving Loans, any day that is a Business Day pursuant to clause (a) above and that is also a day on which trading is carried on by and between banks in the London interbank market.

     Capital Adequacy Regulation shall mean any guideline, request or directive of any central bank or other Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each case, regarding capital adequacy of any bank or of any corporation controlling a bank.

     Cash Management Services means any services provided to Borrowers in connection with operating, collections, payroll, trust, or other depository or disbursement accounts, including automated clearinghouse, e-payable, electronic funds transfer, wire transfer, controlled disbursement, overdraft, depository, information reporting, lockbox and stop payment services.

     Certificate of Title means the certificate of title or other evidence of ownership of any vehicle issued by the appropriate Division of Motor Vehicles or its counterpart in the jurisdiction in which the applicable Contract Obligor resides.

     Change in Control shall mean:

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     (i) prior to consummation of the Approved IPO: as of any date of determination, any of the following: (a) Parallel and Palladium, taken together as a whole, ceases to own and control, beneficially and of record, directly or indirectly, at least 51% of the voting equity of Regional; (b) Regional ceases to own and control, beneficially and of record, directly or indirectly, 100% of the voting stock of any of the other Borrowers; or (c) any holder of voting equity of any Borrower (other than Regional) is not a borrower or guarantor under this Agreement; and

     (ii) upon and after the consummation of the Approved IPO: excluding Pre-IPO Stock Holders, at any time and for any reason whatsoever, (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) that becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of 30% or more of the equity securities of Regional entitled to vote for members of the board of directors or equivalent governing body of Regional on a fully-diluted basis (and taking into account all such securities that such “person” or “group” has the right to acquire pursuant to any option right), (b) Regional ceases to own and control 100% of the issued and outstanding voting stock of any of the other Borrowers, or (c) any holder of voting equity of any Borrower (other than Regional) is not a borrower or guarantor under this Agreement.

     Closing Date shall mean the date of the execution and delivery of this Agreement.

     Code shall mean the Uniform Commercial Code as adopted and in force in the state of New York as from time to time in effect.

     Collateral shall mean:

          (a) all present and future Contracts (including, without limitation, Assigned Contracts) and all payments thereunder in whatever form, including cash, checks, notes, drafts, chattel paper (including, without limitation, all tangible and electronic chattel paper), and other instruments for the payment of money, together with any guaranties and security therefor, and all of each Borrower’s books and records relating thereto (including, without limitation, all computer records, computer programs, and computer source codes);

          (b) Security Documents relating to the Contracts (including, without limitation, Assigned Contracts), together with each Borrower’s rights in the Property covered thereby and any policies of insurance insuring such Property;

          (c) any assets of any Borrower in which any Lender receives a security interest or which thereafter come into any Lender’s possession, custody, or control;

          (d) all proceeds of insurance including, without limitation, property, casualty, and title insurance, affecting the Contracts (including, without limitation, Assigned Contracts);

          (e) all proceeds, property, property rights, privileges and benefits arising out of, from the enforcement of, or in connection with the Contracts (including, without limitation, Assigned Contracts) and Security Documents, the property rights and the policies of insurance referred to above, all credit balances in favor of any Borrower on any Lender’s books, and all

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other general intangibles relating to or arising out of the Contracts (including, without limitation, Assigned Contracts);

          (f) all deposit accounts into which proceeds of the Contracts (including, without limitation, Assigned Contracts) are deposited; and

          (g) all equity interests in any Borrower’s Subsidiaries (but not to exceed 65% of the equity interests of any Subsidiaries organized or formed under the laws of a jurisdiction other than the United States (or any state thereof) or the District of Columbia).

          Notwithstanding anything contained in this Agreement to the contrary (except as provided in the next sentence), in no event shall the Collateral include, and no Borrower shall be deemed to have granted a security interest in, any of such Borrower’s right, title or interest in any license (including but not limited to any license related to such Borrower’s consumer lending activities), contract, agreement, permit, letter of credit right or asset, to the extent, but only to the extent, that such a grant would, under the terms of such license, contract, agreement, permit, letter of credit right or the documentation governing such asset, be prohibited by or result in a breach or termination of the terms of, or constitute a default under, such license, contract, agreement, permit, letter of credit right or the documentation or the applicable law, rules or regulations governing such license, contract, agreement, permit, letter of credit right or asset (other than to the extent that any such term (x) has been waived by the other parties to such license, contract, agreement, permit, letter of credit right or documentation governing such asset or (y) would be rendered ineffective under the Code (including Sections 9-406, 9-407, 9-408, 9-409 or other applicable provisions of the Code or the uniform commercial code as in effect in any relevant jurisdiction) or any other applicable law (including the Bankruptcy Code) or principles of equity; provided, that (A) immediately upon the ineffectiveness, lapse or termination of any such provision, the Collateral shall include, and such Borrower shall be deemed to have granted a security interest in, all such right, title and interest as if such provision had never been in effect and (B) the foregoing exclusion shall in no way be construed so as to limit, impair or otherwise affect the Agent’s unconditional continuing security interest in and Liens upon any rights or interests of a Borrower in or to monies due or to become due under any such license, contract, agreement, permit, letter of credit right or the documentation governing such asset. Notwithstanding the foregoing, the Collateral shall include all Contracts (including, without limitation, Assigned Contracts).

     Collateral Adjustment Percent shall mean, calculated as of the first day of each month, the sum of the Past Due Percent, the Repossession Percent and the Net Charge-Off Percent.

     Collateral Assignment shall mean that certain Assignment of Contract as Collateral Security dated as of the date hereof executed and delivered by RCFA to Agent, to and for the benefit of Lenders, assigning the 1^st Community Asset Purchase Agreement, as the same may be amended, restated or otherwise modified from time to time.

     Collection Account shall have the meaning ascribed to such term in subparagraph 5.2(a) herein.

     Collection Account Agreement shall have the meaning ascribed to such term in subparagraph 5.2(a) herein.

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     Commitment shall mean, at any time with respect to a Lender, the principal amount set forth beside such Lender’s name under the heading “Commitment” on the signature pages of this Agreement or any amendment to this Agreement, or on the signature page of the Assignment and Acceptance pursuant to which such Lender became a Lender hereunder in accordance with the provisions of Paragraph 11.2, as such Commitment may be adjusted from time to time in accordance with the provisions of Paragraph 11.2, and “Commitments” means, collectively, the aggregate amount of the commitments of all of the Lenders.

     Consulting Agreements shall mean, collectively, (i) Consulting Agreement dated as of March 21, 2007 between Richard A. Godley, Sr. and Regional, (ii) Consulting Agreement dated as of March 21, 2007 between Brenda F. Kinlaw and Regional and (c) Consulting Agreement dated as of March 21, 2007 between Jerry L. Shirley and Regional, as each may be amended, modified, restated, replaced or supplemented from time to time in accordance with Paragraph 8.14.

     Contract Debtor shall mean each Person who is obligated to a Borrower to perform any duty under or to make any payment pursuant to the terms of a Contract.

     Contracts shall mean all of each Borrower’s right, title, and interest in and to each presently existing and hereafter arising loan account, account, contract right, Instrument, note, document, chattel paper, general intangible, and all other forms of obligations owing to each Borrower, all rights of each Borrower to receive payment thereof, together with all guarantees or other rights of each Borrower obtained in connection therewith, and any collateral therefor.

     Conversion/Continuation Date shall mean the date on which a Loan is converted into, or continued as, a Base Rate Revolving Loan or a LIBOR Revolving Loan, as the case may be.

     Daily Balances shall mean the amount determined by taking the aggregate amount of all Advances owed at the beginning of a given day, adding any new Advances made or incurred on such date, and subtracting any payments or collections which are deemed to be paid on that date under the provisions of this Agreement.

     Debt shall mean, with respect to any Person, all liabilities, obligations and indebtedness, whether or not contingent, (i) in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments, (ii) representing the balance deferred and unpaid of the purchase price of any property or services (except any such balance that constitutes an account payable to a trade creditor created, incurred, assumed or guaranteed by such Person in the ordinary course of business of such Person in connection with obtaining goods, material or services that is not overdue by more that ninety (90) days, unless being contested in good faith), (iii) all obligations as lessee under leases which have been, or should be, in accordance with GAAP recorded as capital leases (subject to the last sentence of this definition), (iv) all reimbursement and other obligations with respect to letters of credit, bankers’ acceptances and surety bonds, whether or not matured, (v) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person, and (vi) all obligations of such Person under any Hedge Agreements. Notwithstanding anything to the contrary contained in this Agreement or in any other Loan Document, any operating lease of Regional or any of its subsidiaries that was recorded as an operating lease in accordance with GAAP, but which, because of a change in GAAP is subsequently required to be

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recorded as a capital lease, shall be deemed to be an operating lease for purposes of this Agreement and any other Loan Document.

     Default shall mean an event or condition the occurrence of which would, with a lapse of time or the giving of notice or both, become an Event of Default.

     Default Rate shall mean a fluctuating per annum interest rate at all times equal to the sum of (a) the otherwise applicable Interest Rate plus (b) two percent (2.0%). Each Default Rate shall be adjusted simultaneously with any change in the applicable Interest Rate.

     Defaulting Lender shall have the meaning specified in subparagraph 2.2(g)(ii).

     Distribution shall mean, in respect of any corporation: (a) payment or making of any dividend or other distribution of property in respect to the capital stock of such corporation, other than distributions in capital stock of the same class; or (b) the redemption or other acquisition of any capital stock of such corporation.

     Dollar and $ shall mean dollars in the lawful currency of the United States.

     Eligible Assignee shall mean (a) a commercial bank, commercial finance company or other asset based lender, having total assets in excess of $1,000,000,000.00; (b) any Lender listed on the signature page of this Agreement; (c) any Affiliate of any Lender; and (d) if an Event of Default exists, any Person reasonably acceptable to the Agent.

     Eligible Contracts shall mean only such Contracts which satisfy all of the following requirements, as determined by Agent in its sole and absolute discretion (and such other Contracts as Agent may allow as Eligible Contracts in its sole and absolute discretion):

          (a) have been validly assigned to Agent and strictly comply with all of such Borrower’s warranties and representations contained herein and Agent has received a first priority security interest in and lien upon such Contract;

          (b) with respect to which the Contract Debtor is a resident of the continental United States;

          (c) with respect to which the Contract Debtor is not more than 59 days contractually delinquent in making a payment scheduled thereunder;

          (d) neither Borrower nor the Contract Debtor is otherwise in default under the terms of the Contract (e.g., the Property which is the subject to the related Security Documents is not then subject to or in the process of being repossessed);

          (e) are not subject to any defense, counterclaim, offset, discount, or allowance;

          (f) are secured by Property located solely in the continental United States;

          (g) the terms of the Contract and Security Documents and all related documents and instruments comply in all respects with all applicable laws;

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          (h) all documents relating to the Contract, including those between any Borrower and the Contract Debtor, have been executed, are satisfactory to Agent, and originals are to be readily available to Agent in the files of Borrowers;

          (i) the Contract Debtor is not an Affiliate or employee of any Borrower;

          (j) the creditworthiness of the Contract Debtor is acceptable to Agent. Without limiting the generality of the foregoing, the Contract Debtor’s creditworthiness and the terms of the Contract shall conform to Borrowers’ credit guidelines;

          (k) the Contract meets all of the criteria set forth in Borrower’s credit guidelines. Borrowers’ credit guidelines shall be written and shall state in detail the credit criteria used by Borrowers in determining the creditworthiness of Contract Debtors and the required structure and collateral for the Contract for both Contracts originated by Borrowers and/or originated by third parties and purchased by Borrowers. The guidelines shall be reasonably satisfactory to Agent. Borrowers shall not change the guidelines without prior notice to and the written consent of Agent;

          (l) the Contract Debtor is not the subject of a bankruptcy or insolvency proceedings;

          (m) the collateral securing the Contract has not been repossessed by, or otherwise delivered to, any Borrower or its agent;

          (n) (i) with respect to a Large Loan Contract, it has not been subject to two (2) or more payment extensions within any twelve month period and (ii) with respect to a Small Loan Contract it has not been subject to any payment extension;

          (o) all amounts due under a Contract shall be payable in equal monthly payments and shall not include any balloon payment at maturity;

          (p) such Contract does not represent a type of loan commonly called a “pay day loan” in which any Borrower holds a personal check from the Contract Debtor for payment of such loan;

          (q) such Contract, if an automobile purchase financing contract or loan, has an original term of not more than 72 months for any such Contract; provided, that no more than 10% of the aggregate value of all Eligible Contracts may have an original term of more than 60 months;

          (r) such Contract, if an automobile purchase financing contract or loan, the Borrower shall have obtained a Certificate of Title reflecting it as the owner of any vehicle subject to the Contract within 120 days following execution of such Contract, and such Contract is secured by a first priority, perfected interest in such vehicle;

          (s) if the Contract includes sums representing the financing of “extended warranty plans,” such plans are (i) in compliance with all applicable laws, including any special insurance laws relating thereto, and (ii) underwritten by (A) a major automobile manufacturer, or an affiliate thereof, or (B) an independent and financially sound insurance company;

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          (t) such Contract, if an automobile purchase financing contract or loan, has a cash advance component of less than $27,500.00 or if such cash advance component is greater $27,500.00, then no more than 10% of the aggregate value of all Eligible Contracts shall be comprised of those cash advance components greater than $27,500.00; and

          (u) such Contract, if purchased by a Borrower, is fully paid and the seller thereof retains no rights whatsoever thereto.

     ERISA means the Employee Retirement Income Security Act of 1974, as amended and supplemented from time to time.

     ERISA Affiliate means any trade or business (whether or not incorporated) under common control with any Borrower or guarantor within the meaning of Section 414(b) or (c) of the IRS Code (and Sections 414(m) and (o) of the IRS Code for purposes of provisions relating to Section 412 of the IRS Code).

     Event of Default shall mean any event or condition described in Paragraph 10.1.

     Excess Availability shall mean as of the date of determination the remainder of (a) the lesser of (i) Borrowers’ Availability and (ii) the Total Credit Facility, minus (b) the unpaid amount of Loans then outstanding.

     Excluded Taxes shall mean (1) taxes imposed on or measured by the overall net income or gross receipts of the Agent or a Lender, franchise taxes, or any similar taxes assessed pursuant to the laws of the jurisdiction in which the Agent or such Lender is organized, the jurisdiction in which such Agent’s or Lender’s Lending Office or principal executive office is located or any jurisdiction in which the Agent or such Lender is engaged in a trade or business or, in each case, any subdivision thereof or therein and (2) any Taxes imposed on any “withholdable payment” payable to such recipient as a result of the failure of such recipient to satisfy the applicable requirements as set forth in FATCA (or any amended or successor version of FATCA that is substantively comparable) after December 31, 2012.

     Existing Loan Agreement shall have the meaning set forth in the Recitals hereto.

     FATCA shall mean Sections 1471 through 1474 of the IRS Code, as of the date of this Agreement, and any current or future Treasury regulations or official interpretations thereof.

     Federal Funds Rate (a) the weighted average of interest rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on the applicable Business Day (or on the preceding Business Day, if the applicable day is not a Business Day), as published by the Federal Reserve Bank of New York on the next Business Day; or (b) if no such rate is published on the next Business Day, the average rate (rounded up, if necessary, to the nearest 1/8 of 1%) charged to Bank of America on the applicable day on such transactions, as determined by Agent.

     Federal Reserve Board shall mean the Board of Governors of the Federal Reserve System or any successor thereto.

     Fee Letters shall mean those certain letter agreements dated the date hereof with respect to certain fees payable to Agent and/or Lenders.

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     Fiscal Year shall mean each fiscal year of a Borrower, each such fiscal year ending on December 31.

     Foreign Lender shall mean any Lender that is organized under the laws of a jurisdiction other than that in which the Borrowers are resident for tax purposes. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

     Foreign Plan means any employee benefit plan or arrangement (a) maintained or contributed to by any Borrower or Subsidiary that is not subject to the laws of the United States; or (b) mandated by a government other than the United States for employees of any Borrower or Subsidiary.

     Funding Date shall mean the date on which a Borrowing occurs.

     GAAP shall mean generally accepted accounting principles in the United States of America consistently applied.

     Governmental Authority shall mean any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

     Gross Contract Payments shall mean, as of the date of determination, with respect to a Contract the outstanding balance thereof including all unearned interest, fees, and charges owing by the Contract Debtor.

     Guarantor shall mean, individually and collectively, any Person guaranteeing the Obligations of Borrowers including, without limitation, Credit Recovery Associates, Upstate Motor Company and Regional Finance Company of Oklahoma, LLC.

     Guaranty shall mean the guaranty of any Person guaranteeing payment and/or performance of the Obligations.

     Hedge Agreement shall mean any and all transactions, agreements or documents now existing or hereafter entered into, which provides for an interest rate, credit, commodity or equity swap, cap, floor, collar, forward foreign exchange transaction, currency swap, cross currency rate swap, currency option, or any combination of, or option with respect to, these or similar transactions, for the purpose of hedging any Borrower’s exposure to fluctuations in interest or exchange rates, loan, credit exchange, security or currency valuations or commodity prices.

     Hypothetical Availability shall mean an amount, as of any date of determination, equal to the difference obtained by subtracting: (a) the sum of (i) the aggregate outstanding amount of all Revolving Loans and Pending Revolving Loans, plus (ii) the aggregate undrawn face amount of all outstanding Letters of Credit which the Agent has caused to be issued or obtained for the Borrowers’ accounts, plus (iii) the sum of the Bank Borrowing Reserve and the Bank Product Reserve, from (b) the product obtained by multiplying the Advance Rate by the aggregate amount of all Eligible Contracts as of such date.

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     Instruments shall have the same meaning as given to that term in the Code, and shall include all negotiable instruments, notes secured by mortgages or trust deeds, and any other writing which evidences a right to the payment of money and is not itself a security agreement or lease, and is of a type which is, in the ordinary course of business, transferred by delivery with any necessary endorsement or assignment.

     Indemnified Taxes shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by the Borrowers under this Agreement and (b) Other Taxes.

     Intercreditor Agreement shall mean the Intercreditor and Subordination Agreement dated as of August 25, 2010, among the Replacement Subordinated Debt Agent, the lenders party to the Replacement Subordinated Loan and Security Agreement, the Borrowers and the Agent, as the same may be amended, modified, restated, replaced or supplemented from time to time.

     Interest Period shall mean, as to any LIBOR Revolving Loan, the period commencing on the Funding Date of such Loan or on the Conversion/Continuation Date on which the Loan is converted into or continued as a LIBOR Revolving Loan, and ending on the date one, two, three, four or six months thereafter as selected by the Borrower in its Notice of Borrowing or Notice of Conversion/Continuation; provided that:

          (a) if any Interest Period would otherwise end on a day that is not a Business Day, that Interest Period shall be extended to the following Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the preceding Business Day;

          (b) any Interest Period pertaining to a LIBOR Revolving Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period;

          (c) no Interest Period for any LIBOR Revolving Loan shall extend beyond the Maturity Date.

     Interest Rate shall mean each or any of the interest rates, including the Default Rate, set forth in Paragraph 2.5.

     IPO has the meaning set forth in Paragraph 8.18(a).

     IRS Code shall mean the Internal Revenue Code of 1986, as amended from time to time, and any successor statute, and regulations promulgated thereunder.

     Large Loan Contract shall mean a Contract which is not a Small Loan Contract.

     Lender and Lenders shall have the meanings specified in the introductory paragraph hereof and shall include the Agent to the extent of any Agent Advance outstanding and Bank of America to the extent of any Non-Ratable Loan outstanding; provided that no such Agent Advance or Non-Ratable Loan shall be taken into account in determining any Lender’s Pro Rata Share.

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     Lending Office shall mean the office or offices of any Lender specified as its “Lending Office” or “Domestic Lending Office” or “LIBOR Lending Office” or such other office or offices as any Lender may from time to time notify Borrowers.

     Letter of Credit Fee shall have the meaning specified in Paragraph 2.19.

     Letter of Credit Issuer shall mean Bank of America and any Affiliate of Bank of America that issues any Letter of Credit pursuant to this Agreement.

     Letters of Credit shall have the meaning specified in subparagraph 2.18(a).

     LIBOR Rate shall mean, for any Interest Period, with respect to LIBOR Revolving Loans comprising part of the same Borrowing, the rate of interest per annum (rounded upward to the next 1/8th of 1.0%) determined by Agent as follows:

LIBOR Rate	=	LIBOR
		1.00 — Eurodollar Reserve Percentage

     Where,

     “Eurodollar Reserve Percentage” shall mean for any day for any Interest Period the maximum reserve percentage (expressed as a decimal, rounded upward to the next 1/100th of 1.0%) in effect on such day (whether or not applicable to any Lender) under regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”); and

     “LIBOR” shall mean for any Interest Period with respect to a LIBOR Loan, the per annum rate of interest (rounded up, if necessary, to the nearest 1/8th of 1%), determined by Agent at approximately 11:00 a.m. (London time) two Business Days prior to commencement of such Interest Period, for a term comparable to such Interest Period, equal to (a) the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source designated by Agent); or (b) if BBA LIBOR is not available for any reason, the interest rate at which Dollar deposits in the approximate amount of the LIBOR Loan would be offered by Agent’s London branch to major banks in the London interbank Eurodollar market.

     LIBOR Revolving Loan shall mean a Revolving Loan during any period in which it bears interest at the LIBOR Rate.

     Lien shall mean any mortgage, lien, pledge, charge, conditional sale or other title retention agreement, security interest, attachment, levy or other encumbrance of any kind, in any case whether consensual or non-consensual. Such term shall include the filing of any UCC financing statements naming any Borrower as “debtor” if such filing is made by, or is authorized or permitted by, such Borrower.

     Loan shall mean all indebtedness and loans owed by Borrowers to Agent and Lenders arising under this Agreement, the Notes and the Letters of Credit.

     Loan Account shall have the meaning specified in subparagraph 13.17(g).

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     Loan Documents shall mean this Agreement, the Notes, the Letters of Credit and the applications therefor, the Guaranties, the Pledges, the Collateral Assignment, the Fee Letters and all other agreements, instruments, and documents heretofore, now or hereafter evidencing, securing, guaranteeing or otherwise relating to the Obligations, the Collateral, the security interest in the Collateral, or any other aspect of the transactions contemplated by this Agreement.

     Majority Lenders shall mean at any date of determination (a) Lenders whose Pro Rata Shares aggregate more than sixty-six and two-thirds percent (66-2/3%) as such percentage is determined under the definition of Pro Rata Share set forth herein; or (b) in the event there are only two (2) Lenders under this Agreement, both Lenders.

     Management Agreement shall mean the Parallel Financial Advisory Services/Transaction Fee Letter dated as of March 21, 2007, among Parallel, Palladium Capital and Regional, as may be amended from time to time in accordance with Paragraph 8.14.

     Management Incentive Plan shall mean each of the Management Incentive Plan of Regional, dated as of March 21, 2007, and the Regional Management Corp. 2011 Stock Incentive Plan, as each may be amended, modified, restated, replaced or supplemented from time to time in accordance with Paragraph 8.14.

     Maturity Date shall have the meaning specified in Paragraph 3.1.

     Mortgage Loan shall mean a Large Loan Contract which is secured by real property.

     Multiemployer Plan means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which any Borrower, guarantor or ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

     Net Balance shall mean, as of the date of determination, the Gross Contract Payments of Contract less all unearned interest, fees, and charges owing by the Contract Debtor.

     Net Charge-Offs shall mean the aggregate amount of all unpaid payments due under Contracts which have been charged off by the Borrowers during such period, as reduced by the amount of all cash recoveries with respect to Contracts which had been charged off during previous periods or during such period.

     Net Charge-Off Percent shall mean the annualized percent, calculated as of the first day of each month, equal to (a) the aggregate amount of all Net Charge-Offs during each of the six (6) months immediately preceding the date of calculation, multiplied by two, divided by (b) the aggregate amount of the Net Balances owing under all Contracts outstanding as of the last day of each of the previous six (6) months divided by six. For example, if the Borrowers charged off $10,000.00 each month for six (6) months and if the aggregate Net Balances outstanding at the end of the previous six (6) months was $1,000,000.00 for four (4) months and $1,200,000.00 for two (2) months, the Net Charge-Off Percent would be eleven and two-tenths percent (11.2%) ($120,000.00 (being $60,000.00 multiplied by 2)/$1,066,667.00).

     Net Income shall mean, with respect to any fiscal period of Borrowers, Borrowers’ and their Subsidiaries’ consolidated net income (excluding any net income of Subsidiaries that are not Guarantors), as determined in accordance with GAAP and reported on the financial

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statements for such period, but excluding any and all of the following included in such determination of net income (without duplication): (a) gain or loss arising from the sale of capital assets, such as property, plant and equipment; (b) gain or loss arising from any write-up or write-down in the book value of any asset in the ordinary course of business (excluding Contracts); (c) earnings or losses of any corporation acquired by any Borrower in any manner, to the extent realized by such other corporation prior to the date of acquisition; (d) earnings of any business entity in which any Borrower has an ownership interest or of any Subsidiary that is not also a Guarantor unless (and only to the extent) such earnings shall actually have been received by any Borrower in the form of cash distributions; (e) earnings or losses of any Person to which assets of any Borrower shall have been sold, transferred, or disposed of, or into which any Borrower shall have been merged or which has been a party with Borrower to any consolidation or other form of reorganization, prior to the date of such transaction; (f) gain or loss arising from the acquisition of any debt or equity security of any Borrower or from cancellation or forgiveness of debt; (g) gain or loss arising from extraordinary items, as determined in accordance with GAAP, or from any other one-time or nonrecurring transaction; (h) non-cash gain or loss; (i) any actual taxes paid by or on behalf of any Borrower or its Subsidiaries; (j) any net income or gain or loss (without duplication) (i) from the disposition of any discontinued operations, including but not limited to Upstate Motor Company and (ii) from the discontinued operations of Upstate Motor Company incurred prior to the date such discontinued operations are sold; (k) restructuring charges approved by Agent in its reasonable discretion; and (l) amortization of intangibles, including but not limited to financing costs, goodwill and the effects of purchase accounting.

     Non-Ratable Loans shall have the meaning specified in subparagraph 2.2(h).

     Notes shall mean, collectively, all promissory notes executed and delivered by Borrowers to Lender pursuant to this Agreement, as the same may be amended, extended, increased, supplemented or otherwise modified from time to time.

     Notice of Borrowing shall have the meaning specified in subparagraph 2.2(b)(1).

     Notice of Conversion/Continuation shall have the meaning specified in subparagraph 2.6(b).

     Obligations shall mean all present and future loans, advances, liabilities, obligations, covenants, duties, and debts owing by Borrowers to Agent and/or any Lender arising under or pursuant to this Agreement or any of the other Loan Documents, whether or not evidenced by any note, or other instrument or document, whether arising from an extension of credit, opening of a letter of credit, acceptance, loan, guaranty, indemnification or otherwise, whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, as principal or guarantor, and including all principal, interest, charges, expenses, fees, attorneys’ fees, filing fees and any other sums chargeable to Borrowers hereunder or under any of the other Loan Documents. “Obligations” includes, without limitation, (a) all debts, liabilities, and obligations now or hereafter arising from or in connection with the Letters of Credit and (b) all Bank Product Obligations.

     Other Loss Reserve Percent shall mean, calculated as of the first day of each month, the percent obtained by dividing (i) the sum of (A) the aggregate amount of Net Charge Offs for all Contracts other than Small Loan Contracts and live check Contracts, and (B) all Contracts, with

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respect to which any payment due thereunder is 180 or more days delinquent, as determined on a contractual basis, and were secured by a Lien on Property which has been repossessed for 120 days or more, during each of the twelve (12) months immediately preceding the date of calculation, by (ii) the average aggregate amount of the Net Balance owing under such Contracts outstanding as of the last day of each of the previous twelve (12) months. For example, $10,000.00 of the above Contracts were charged off each month for twelve (12) months and if the aggregate Net Balance outstanding at the end of the previous twelve (12) months was $2,000,000.00 for eight (8) months and $2,500,000.00 for four (4) months ($120,000.00/$2,166,667.00 (being $26,000,000.00 divided by 12)), the Other Loss Reserve Percent would be 5.54%.

     Other Taxes shall mean any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies (but excluding any tax, charge or levy that constitutes Excluded Taxes) which arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any other Loan Documents.

     Palladium shall mean Palladium Equity Partners III, L.P., a Delaware limited partnership, and any Affiliates or Related Funds thereof.

     Palladium Capital shall mean Palladium Capital Management III, L.L.C., a Delaware limited liability company and any Affiliates or Related Funds thereof.

     Parallel shall mean Parallel Investment Partners, LP, a Delaware limited partnership, and any Affiliates or Related Funds thereof.

     Participant shall mean any Person who shall have been granted the right by any Lender to participate in the financing provided by such Lender under this Agreement, and who shall have entered into a participation agreement in form and substance satisfactory to such Lender.

     Past Due Percent shall mean the percent, calculated as of the first day of each month, equal to (a) the aggregate amount of Gross Contract Payments owing under all Contracts (excluding Contracts charged-off), as to which any portion of an installment due thereunder is thirty (30) days or more past due as determined on a contractual basis as of the last day of each of the three (3) months immediately preceding the date of calculation, divided by (b) the aggregate amount of Gross Contract Payments owing under all Contracts (excluding Contracts charged-off) as of the last day of each of the three (3) months immediately preceding the date of calculation. For example, if, as of the last day of the previous three months the Gross Contract Payments were $1,000,000.00, $1,250,000.00 and $1,500,000.00 and on the same date the amount of Gross Contract Payments that were more than thirty (30) days past due was $100,000.00, $150,000.00 and $150,000.00, the Past Due Percent would be ten and two-thirds percent (10-2/3%) ($400,000.00/$3,750,000.00).

     Patriot Act shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001), as amended and in effect from time to time.

     PBGC means the Pension Benefit Guaranty Corporation.

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     Pending Revolving Loans shall mean, at any time, the aggregate principal amount of all Revolving Loans requested in any Notice(s) of Borrowing received by Agent which have not yet been advanced.

     Pension Plan means any employee pension benefit plan (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by any Borrower, guarantor or ERISA Affiliate or to which the any Borrower, guarantor or ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the preceding five plan years.

     Permitted Debt shall have the meaning ascribed to such term in Paragraph 8.6 hereof.

     Permitted Liens shall mean the following Liens (a) Liens, whether presently existing or created hereafter, pursuant to the Loan Documents or Liens in favor of Agent; (b) Liens for taxes or assessments or other governmental charges or levies not yet due and payable or which are being contested in accordance with Paragraph 8.1, (c) workers’, mechanics’, suppliers’, carriers’, warehousemen’s or other similar Liens (i) arising in the ordinary course of business or (ii) securing obligations being contested in accordance with Paragraph 8.1, (d) Liens arising in respect of leases and subleases, (e) landlord’s liens arising by operation of law, (f) purchase money Liens on assets acquired by any Borrower or any of its Subsidiaries in the ordinary course of its business to secure the purchase price of such asset or Debt incurred solely for the purpose of financing the acquisition of such asset, (g) deposits and pledges of cash securing (i) obligations incurred in respect of workers’ compensation, unemployment insurance, social security or other forms of governmental insurance or benefits, (ii) the performance of bids, tenders, leases, contracts (other than for the repayment of borrowed money) and statutory obligations or (iii) obligations on surety, appeal or performance bonds, (h) easements, zoning restrictions, licenses, covenants and similar encumbrances on real property and minor irregularities in the title thereto that do not (i) secure obligations for the payment of money or (ii) materially impair the value of such property or its use in the normal conduct of business, (i) liens in favor of collecting banks arising from the endorsement of negotiable instruments for deposit or collection in the ordinary course of business, (j) the title of a lessor or sublessor to lease property under any lease, (k) Liens with respect to capitalized lease obligations, and (l) Liens described on Schedule 7.9 and (m) Liens contemplated by the Intercreditor Agreement.

     Permitted Refinancings shall mean, with respect to any Debt, any refinancing thereof; provided, however, that (i) no Event of Default shall have occurred and be continuing or would arise therefrom, (ii) any such refinancing Debt shall (a) not be on financial and other terms that are materially more onerous in the aggregate than the Debt being refinanced and shall not have defaults, rights or remedies materially more burdensome in the aggregate to the obligor than the Debt being refinanced, (b) not have a stated maturity or Weighted Average Life to Maturity that is shorter than the Debt being refinanced, (c) be at least as subordinate to the Obligations as the Debt being refinanced (and unsecured if the refinanced Debt is unsecured), and (d) be in a principal amount that does not exceed the principal amount so refinanced, plus all accrued and unpaid interest thereon, plus the stated amount of any premium and other payments required to be paid in connection with such refinancing pursuant to the terms of the Debt being refinanced, plus the amount of reasonable expenses of Borrowers or any of its Subsidiaries incurred in connection with such refinancing, and (iii) the sole obligors and/or guarantors on such Debt shall not include any Person other than the obligors and/or guarantors on such Debt being refinanced.

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     Person shall mean any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, or any other entity.

     Plan means any employee benefit plan (as such term is defined in Section 3(3) of ERISA) established by a Borrower or guarantor or, with respect to any such plan that is subject to Section 412 of the IRS Code or Title IV of ERISA, an ERISA Affiliate.

     Pledge shall mean a pledge agreement executed by any Borrower or Guarantor, as security for payment and/or performance of the Obligations.

     Pre-IPO Stock Holders means any and all of (i) Palladium, (ii) Parallel, (iii) an employee benefit plan (or trust forming a part thereof) maintained by (A) Regional or (B) any corporation or other Person of which a majority of its voting power of its voting equity securities or equity interest is owned, directly or indirectly, by Regional, or (iv) any “group” (as such term is used for purposes of Section 13(d) or 14(d) of the Exchange Act) that includes Palladium or Parallel, or any Person with more than 50% of the combined voting power of the then outstanding voting securities of which are owned by Palladium, Parallel or any such group.

     Prime Rate means the rate of interest announced by Bank of America from time to time as its prime rate. Such rate is set by Bank of America on the basis of various factors, including its costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

     Pro Rata Share shall mean, with respect to a Lender, a fraction (expressed as a percentage), the numerator of which is the amount of such Lender’s Commitment and the denominator of which is the sum of the amounts of all of the Lenders’ Commitments, or if no Commitments are outstanding or the Commitments have expired, a fraction (expressed as a percentage), the numerator of which is the amount of Obligations owed to such Lender and the denominator of which is the aggregate amount of the Obligations owed to the Lenders, in each case giving effect to a Lender’s participation in Non-Ratable Loans and Agent Advances.

     Property shall mean the personal and any real property described in the Security Documents which secure the obligations of a Contract Debtor under a Contract.

     Regional Holdings shall mean Regional Holdings LLC, a Delaware limited liability company.

     Register shall have the meaning specified in Paragraph 11.2(c).

     Related Fund shall mean with respect to any Person, an Affiliate of such Person, or a fund or account managed by such Person or an Affiliate of such Person.

     Replacement Subordinated Debt shall mean the Debt of the Borrowers pursuant to the Replacement Subordinated Debt Documents.

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     Replacement Subordinated Debt Agent shall mean Palladium Capital Management III, L.L.C. in its capacity as agent for the holders of the Replacement Subordinated Debt, and any successor agent.

     Replacement Subordinated Debt Documents shall mean the Replacement Subordinated Loan and Security Agreement, the Replacement Subordinated Notes and any other documents, instruments or agreements that from time to time evidence the Replacement Subordinated Debt or secure or support payment or performance thereof, as each of the foregoing may be amended, modified, restated, replaced or supplemented from time to time.

     Replacement Subordinated Loan and Security Agreement shall mean the Senior Subordinated Loan and Security Agreement, dated as of August 25, 2010, as amended on January 18, 2012, among the Replacement Subordinated Debt Agent, the Borrowers and the lenders from time to time party thereto, as the same may be amended, modified, restated, replaced or supplemented from time to time.

     Replacement Subordinated Notes shall mean the promissory notes issued by the Borrowers from time to time pursuant to the Replacement Subordinated Loan and Security Agreement, as the same may be amended, modified, restated, replaced or supplemented from time to time.

     Repossession Percent shall mean the percent, calculated as of the first day of each month, equal to (a) the repossession value of all property which the Borrowers have repossessed and which, as of the last day of the month immediately preceding the date of calculation, was reflected as an asset on the Borrowers’ books divided by (b) the Net Balance owing under all Contracts (excluding Contracts charged-off) outstanding as of the last day of that month. For example, if ten (10) properties having a total repossession value of $50,000.00 had at any time been repossessed by Borrowers and were reflected as assets on the books of Borrowers at the end of the month and the Net Balance was $2,000,000.00 at the end of such month, the Repossession Percent would be two and one-half percent (2-1/2%) ($50,000.00/$2,000,000.00).

     Required Lenders shall mean at any time (a) Lenders whose Pro Rata Shares aggregate more than fifty-one percent (51%) as such percentage is determined under the definition of Pro Rata Share set forth herein; or (b) in the event there are only two (2) Lenders under this Agreement, either Lender; or (c) in the event Bank of America’s Pro Rata Share exceeds fifty-one percent (51%), any two Lenders.

     Requirement of Law shall mean, as to any Person, any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon the Person or any of its property or to which the Person or any of its property is subject.

     Revolving Loans shall have the meaning specified in Paragraph 2.2 and includes each Agent Advance and Non-Ratable Loan.

     RMC Reinsurance shall mean RMC Reinsurance, Ltd., a Turks and Caicos Islands company.

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     Security Documents shall mean all security agreements, chattel mortgages, deeds of trust, mortgages, or other security instruments or agreements of every type and nature securing the obligations of a Contract Debtor under a Contract.

     Settlement and Settlement Date shall have the meanings specified in subparagraph 2.2(j)(i).

     Small Contracts Reserve Percent shall mean, calculated as of the first day of each month, the percent obtained by dividing (i) sum of (A) the aggregate amount of Net Charge Offs for Small Loan Contracts and live check Contracts, (B) to the extent non-duplicative of (A), Small Loan Contracts and live check Contracts with respect to which any payment due thereunder is 180 or more days delinquent, as determined on a contractual basis, (C) all Contracts which were secured by a Lien on Property which has been repossessed for 120 days or more, during each of the eight (8) months immediately preceding the date of calculation, by (ii) the average aggregate amount of the Net Balance owing under such Contracts outstanding as of the last day of each of the previous eight (8) months. For example, if $1,000.00 of the above Contracts were charged off each month for eight (8) months and if the average aggregate Net Balance outstanding at the end of the previous eight (8) months was $2,000,000.00 for four (4) months and $2,500,000.00 for four (4) months ($8,000.00/$2,250,000.00 (being $18,000,000.00 divided by 8)), the Small Contract Loss Reserve Percent would be 0.356%.

     Small Loan Contract shall mean a Contract which has an original amount financed of $2,500 or less.

     Subordinated Debt shall mean all Debt of Borrowers, including, but not limited to, the Replacement Subordinated Debt, incurred both prior to and after the Closing Date, which at all times during the term of this Agreement is (a) subordinated to Borrowers’ Obligations hereunder pursuant to a written subordination agreement or in subordination provisions in the documents governing such Debt, the terms of which are satisfactory to Required Lenders in their reasonable discretion as of the date of such subordination agreement or as of the date such documents governing such Debt are entered into; or (b) subordinated, in a manner reasonably satisfactory to Required Lenders as of the date such Debt is incurred, to Borrowers’ Obligations hereunder.

     Subsidiary shall mean, with respect to any Person, any corporation or other entity of which such Person owns, directly or indirectly, more than 50% of the capital stock of such corporation or equity interests in such other entity having by the terms thereof ordinary voting power to elect a majority of the board of directors, board of managers or similar body of such corporation or entity.

     Super-Majority Lenders shall mean at any time Lenders whose Pro Rata Shares aggregate more than seventy-five percent (75%) as such percentage is determined under the definition of Pro Rata Share set forth herein.

     Supporting Letter of Credit shall have the meaning specified in subparagraph 2.18(i).

     Taxes shall mean any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto.

     Total Credit Facility shall mean $255,000,000.00

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     Unused Letter of Credit Subfacility shall mean an amount equal to $500,000.00 minus the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit plus (b) the aggregate unpaid reimbursement obligations with respect to all Letters of Credit.

     Unused Line Fee shall have the meaning specified in Paragraph 2.8.

     Weighted Average Life to Maturity shall mean, when applied to any Debt at any date, the number of years obtained by dividing (a) then outstanding principal amount of such Debt into (b) the sum of the total of the product obtained by multiplying (i) the amount of each scheduled installment, sinking fund, serial maturity or other required payment of principal including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment.

     1.2 Interpretive Provisions.

          (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

          (b) The words “hereof,” “herein,” “hereunder” and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; and Subparagraph, Paragraph, Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

          (c) (i) The term “documents” includes any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced.

               (ii) The term “including” is not limiting and means “including without limitation.”

               (iii) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each mean “to but excluding” and the word “through” means “to and including.”

          (d) Unless otherwise expressly provided herein, (i) references to agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document, and (ii) references to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting the statute or regulation.

          (e) This Agreement and other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and shall each be performed in accordance with their terms.

          (f) This Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to the Agent, the Borrowers and the other parties, and are the products of all parties. Accordingly, they shall not be construed against the Lenders or the Agent merely because of the Agent’s or the Lenders’ involvement in their preparation.

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          (g) In the event that any Accounting Change shall occur and such change results in a change in the method of calculation of any financial covenants, standards or terms in this Agreement, then, upon the request of Regional or the Agent, the Borrowers, the Lenders and the Agent shall negotiate in good faith to amend such financial covenant, standard, or term to preserve the original intent thereof in light of such Accounting Change with the desired result that the criteria for evaluating the Borrowers’ financial condition shall be the same after such Accounting Change as if such Accounting Change had not been made. Until such time as such an amendment shall have been executed and delivered by the Borrowers, the Administrative Agent, and the applicable Lenders, (A) all financial covenants, standards, and terms in this Agreement shall continue to be calculated or construed as if such Accounting Change had not occurred and (B) the Borrowers shall provide to the Administrative Agent and the applicable Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such financial covenant, standard, or term made before, and after giving effect to, such Accounting Change.

SECTION TWO — LOANS AND LETTERS OF CREDIT AND TERMS OF PAYMENT

     2.1 Total Facility. Subject to all of the terms and conditions of this Agreement, Lenders severally agree to make available a total credit facility of up to the Total Credit Facility for Borrowers’ use from time to time during the term of this Agreement. The Total Credit Facility shall be composed of a revolving line of credit consisting of Revolving Loans and Letters of Credit up to the Availability, as described in Paragraph 2.2.

     2.2 Revolving Loans.

          (a) Amounts. Subject to the satisfaction of the conditions precedent set forth in Section Six and so long as no Default or Event of Default then exists, each Lender severally, but not jointly, agrees, upon Borrowers’ request from time to time on any Business Day during the period from the date hereof to the Maturity Date, to make revolving loans (the “Revolving Loans”) to Borrowers, in amounts not to exceed (except for Bank of America with respect to Non-Ratable Loans and except for the Agent with respect to Agent Advances) such Lender’s Pro Rata Share of the Borrowers’ Availability. The Lenders, however, in their unanimous discretion, may elect to make Revolving Loans in excess of the Availability on one or more occasions, but if they do so, neither the Agent nor the Lenders shall be deemed thereby to have changed the limits of the Total Credit Facility or the Availability or to be obligated to exceed such limits on any other occasion. If the sum of outstanding Revolving Loans and the aggregate amount of Pending Revolving Loans, together with all outstanding indebtedness owing by Borrowers under all outstanding Letters of Credit, exceeds the Availability, Lenders may refuse to make or otherwise restrict the making of Revolving Loans as Lenders determine until such excess has been eliminated, subject to the Agent’s authority, in its sole discretion, to make Agent Advances pursuant to the terms of subparagraph 2.2(i).

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          (b) Procedure for Borrowing.

               (i) Each Borrowing shall be made upon any Borrower’s irrevocable written notice delivered to Agent in the form of a Notice of Borrowing in the form attached hereto as Exhibit “A”, which notice must be received by Agent prior to 11:00 a.m. (New York, New York time) (i) three Business Days prior to the requested Funding Date, in the case of LIBOR Revolving Loans and (ii) no later than 11:00 a.m. (New York, New York time) on the requested Funding Date, in the case of Base Rate Revolving Loans, specifying:

                    (A) the amount of the Borrowing (which, in the case of a Borrowing of LIBOR Revolving Loans, shall be in an amount not less than $5,000,000.00 or in an amount that is in an integral multiple of $1,000,000.00 in excess thereof);

                    (B) the requested Funding Date, which shall be a Business Day;

                    (C) whether the Revolving Loans requested are to be Base Rate Revolving Loans or LIBOR Revolving Loans (and if not specified, it shall be deemed a request for Base Rate Revolving Loans); and

                    (D) the duration of the Interest Period if the requested Revolving Loans are to be LIBOR Revolving Loans. If the Notice of Borrowing fails to specify the duration of the Interest Period for any Borrowing comprised of LIBOR Revolving Loans, such Interest Period shall be three months.

               (ii) After giving effect to any Borrowing, there may not be more than five (5) different Interest Periods in effect.

               (iii) With respect to any request for Base Rate Revolving Loans, in lieu of delivering the above-described Notice of Borrowing, a Borrower may give Agent telephonic notice of such request by the required time, with such telephonic notice to be confirmed in writing within 24 hours of the giving of such notice but Agent shall be entitled to rely on the telephonic notice in making such Revolving Loans, regardless of whether any such confirmation is received by Agent.

               (iv) No Borrower shall have the right to request a LIBOR Revolving Loan while an Event of Default has occurred and is continuing.

          (c) Reliance upon Authority. Prior to any change with respect to any of the information contained in the following clauses (i) and (ii), Borrowers shall deliver to Agent a writing setting forth (i) the account of Borrowers to which Agent is authorized to transfer the proceeds of the Revolving Loans requested pursuant to this Paragraph 2.2, and (ii) the names of the persons authorized to request Revolving Loans on behalf of Borrowers, and shall provide Agent with a specimen signature of each such person. Agent shall be entitled to rely conclusively on such person’s authority to request Revolving Loans on behalf of Borrowers, the proceeds of which are to be transferred to any of the accounts specified by Borrowers pursuant to the immediately preceding sentence, until Agent receives written notice to the contrary. Agent shall have no duty to verify the identity of any individual representing himself as one of the persons authorized by Borrowers to make such requests on its behalf. Each Borrower agrees that each notice, election, representation and warranty, covenant, agreement and undertaking made on its behalf by such authorized Person shall be deemed for all purposes to have been made by such

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Borrower and shall be binding upon and enforceable against such Borrower to the same extent as if the same had been made directly by such Borrower.

          (d) No Liability. Agent shall not incur any liability to Borrowers as a result of acting upon any notice referred to in subparagraphs 2.2(b) and (c), which notice Agent believes in good faith to have been given by any person duly authorized by Borrowers to request Revolving Loans on its behalf or for otherwise acting in good faith under this Paragraph 2.2, and the crediting of Revolving Loans to Borrowers’ deposit accounts, or transmittal to such Person as Borrowers shall direct, shall conclusively establish the obligation of Borrowers to repay such Revolving Loans as provided herein.

          (e) Notice Irrevocable. Any Notice of Borrowing (or telephonic notice in lieu thereof) made pursuant to subparagraph 2.2(b) shall be irrevocable and Borrowers shall be bound to borrow the funds requested therein in accordance therewith.

          (f) Agent’s Election. Promptly after receipt of a Notice of Borrowing (or telephonic notice in lieu thereof) pursuant to subparagraph 2.2(b), Agent shall elect, in its discretion, (i) to have the terms of subparagraph 2.2(g) apply to such requested Borrowing, or (ii) to request Bank of America to make a Non-Ratable Loan pursuant to the terms of subparagraph 2.2(h) in the amount of the requested Borrowing; provided, however, that if Bank of America declines in its sole discretion to make a Non-Ratable Loan pursuant to subparagraph 2.2(h), Agent shall elect to have the terms of subparagraph 2.2(g) apply to such requested Borrowing.

          (g) Making of Revolving Loans.

               (i) In the event that Agent shall elect to have the terms of this subparagraph 2.2(g) apply to a requested Borrowing as described in subparagraph 2.2(f), or in the case of any request by a Borrower for a Borrowing of LIBOR Revolving Loans, then promptly after receipt of a Notice of Borrowing or telephonic notice pursuant to subparagraph 2.2(b), Agent shall notify Lenders by telecopy, telephone or other similar form of transmission, of the requested Borrowing. Each Lender shall make the amount of such Lender’s Pro Rata Share of the requested Borrowing available to Agent in immediately available funds, to such account of Agent as Agent may designate, not later than 2:00 p.m. (New York, New York time) on the Funding Date applicable thereto. After Agent’s receipt of the proceeds of such Revolving Loans, Agent shall make the proceeds of such Revolving Loans available to Borrowers on the applicable Funding Date by transferring same day funds equal to the proceeds of such Revolving Loans received by Agent to the account of Borrowers, designated in writing by Borrowers and acceptable to Agent; provided, however, that the amount of Revolving Loans so made on any date shall in no event exceed the Excess Availability on such date.

               (ii) Unless Agent receives notice from a Lender at least one Business Day prior to the date of any Borrowing that such Lender will not make available as and when required hereunder to Agent for the account of Borrowers the amount of that Lender’s Pro Rata Share of the Borrowing, Agent may assume that each Lender has made such amount available to Agent in immediately available funds on the Funding Date and Agent may (but shall not be so required), in reliance upon such assumption, make available to Borrowers on such date a corresponding amount. If and to the extent any Lender shall not have made its full amount available to Agent in immediately available funds and Agent in such circumstances has made available to Borrowers such amount, that Lender shall on the Business Day following such

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Funding Date make such amount available to Agent, together with interest at the Federal Funds Rate for each day during such period. A notice by Agent submitted to any Lender with respect to amounts owing under this subparagraph shall be conclusive, absent manifest error. If such amount is so made available, such payment to Agent shall constitute such Lender’s Revolving Loan for all purposes of this Agreement. If such amount is not made available to Agent on the Business Day following the Funding Date, Agent will notify Borrowers of such failure to fund and, upon demand by Agent, Borrowers shall pay such amount to Agent for Agent’s account, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the Interest Rate applicable at the time to the Revolving Loans comprising such Borrowing. The failure of any Lender to make any Revolving Loan on any Funding Date (any such Lender, prior to the cure of such failure, being hereinafter referred to as a “Defaulting Lender”) shall not relieve any other Lender of any obligation hereunder to make a Revolving Loan on such Funding Date, but no Lender shall be responsible for the failure of any other Lender to make the Revolving Loan to be made by such other Lender on any Funding Date.

               (iii) Agent shall not be obligated to transfer to a Defaulting Lender any payments made by Borrowers to Agent for the Defaulting Lender’s benefit; nor shall a Defaulting Lender be entitled to the sharing of any payments hereunder. Amounts payable to a Defaulting Lender shall instead be paid to or retained by Agent. Agent may hold and, in its discretion, re-lend to Borrowers the amount of all such payments received or retained by it for the account of such Defaulting Lender. Any amounts so re-lent to Borrowers shall bear interest at the rate applicable to Base Rate Revolving Loans and for all other purposes of this Agreement shall be treated as if they were Revolving Loans, provided, however, that for purposes of voting or consenting to matters with respect to the Loan Documents and determining Pro Rata Shares, such Defaulting Lender shall be deemed not to be a “Lender”. Until a Defaulting Lender cures its failure to fund its Pro Rata Share of any Borrowing (A) such Defaulting Lender shall not be entitled to any portion of the Unused Line Fee or the Letter of Credit Fee, and (B) the Unused Line Fee and Letter of Credit Fee shall accrue in favor of the Lenders which have funded their respective Pro Rata Shares of such requested Borrowing and shall be allocated among such performing Lenders ratably based upon their relative Commitments. This Paragraph shall remain effective with respect to such Lender until such time as the Defaulting Lender shall no longer be in default of any of its obligations under this Agreement. The terms of this Paragraph shall not be construed to increase or otherwise affect the Commitment of any Lender, or relieve or excuse the performance by Borrowers of their duties and obligations hereunder.

          (h) Making of Non-Ratable Loans.

               (i) In the event Agent shall elect, with the consent of Bank of America, to have the terms of this subparagraph 2.2(h) apply to a requested Borrowing as described in subparagraph 2.2(f), Bank of America shall make a Revolving Loan in the amount of such Borrowing (any such Revolving Loan made solely by Bank of America pursuant to this subparagraph 2.2(h) being referred to as a “Non-Ratable Loan” and such Revolving Loans being referred to collectively as “Non-Ratable Loans”) available to Borrowers on the Funding Date applicable thereto by transferring same day funds to an account of Borrowers, designated in writing by Borrowers and acceptable to Agent. Each Non-Ratable Loan shall be subject to all the terms and conditions applicable to other Revolving Loans except that all payments thereon shall be payable to Bank of America solely for its own account (and for the account of the holder of any participation interest with respect to such Revolving Loan). Agent shall not request Bank of America to make any Non-Ratable Loan if (A) Agent shall have received written notice from

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any Lender that one or more of the applicable conditions precedent set forth in Section Six will not be satisfied on the requested Funding Date for the applicable Borrowing, or (B) the requested Borrowing would exceed the Excess Availability on such Funding Date. Agent shall not otherwise be required to determine whether the applicable conditions precedent set forth in Section Six have been satisfied or the requested Borrowing would exceed the Excess Availability on the Funding Date applicable thereto prior to making, in its sole discretion, any Non-Ratable Loan.

               (ii) The Non-Ratable Loans shall be secured by the Agent’s Liens in and to the Collateral, shall constitute Revolving Loans and Obligations hereunder, and shall bear interest at the rate applicable to the Base Rate Revolving Loans from time to time.

          (i) Agent Advances.

               (i) Subject to the limitations set forth in the provisos contained in this subparagraph 2.2(i)(i), Agent is hereby authorized by Borrowers and Lenders, from time to time in Agent’s sole discretion, (A) after the occurrence of a Default or an Event of Default, or (B) at any time that any of the other applicable conditions precedent set forth in Section Six have not been satisfied, to make Base Rate Revolving Loans to Borrowers on behalf of Lenders which Agent, in its reasonable business judgment, deems necessary or desirable (1) to preserve or protect the Collateral, or any portion thereof, (2) to enhance the likelihood of, or maximize the amount of, repayment of the Loans and other Obligations, or (3) to pay any other amount chargeable to Borrowers pursuant to the terms of this Agreement, including costs, fees and expenses as described in Paragraph 13.1 (any of the advances described in this subparagraph 2.2(i)(i) being hereinafter referred to as “Agent Advances”); provided, however, that Required Lenders may at any time revoke Agent’s authorization contained in this subparagraph 2.2(i) to make Agent Advances, any such revocation to be in writing and to become effective prospectively upon Agent’s receipt thereof; provided further, however, that (a) if the Pro Rata Share of the Required Lenders revoking such authorization does not exceed fifty-one percent (51%), such revocation shall become effective 120 days after Agent’s receipt thereof, or (b) if the Default or Event of Default would require consent of all Lenders to waive or amend, such authorization may be revoked by any Lender effective 120 days after Agent’s receipt thereof; and provided further, however, that no such Agent Advance shall cause the Loan (including such Agent Advance) to exceed the Total Credit Facility.

               (ii) The Agent Advances shall be repayable on demand and secured by the Agent’s Liens in and to the Collateral, shall constitute Revolving Loans and Obligations hereunder, and shall bear interest at the rate applicable to Base Rate Revolving Loans from time to time. Agent shall notify each Lender in writing of each such Agent Advance.

          (j) Settlement. It is agreed that each Lender’s funded portion of the Revolving Loans is intended by Lenders to be equal at all times to such Lender’s Pro Rata Share of the outstanding Revolving Loans. Notwithstanding such agreement, Agent, Bank of America and the other Lenders agree (which agreement shall not be for the benefit of or enforceable by Borrowers) that in order to facilitate the administration of this Agreement and the other Loan Documents, settlement among them as to the Revolving Loans, the Non-Ratable Loans and the Agent Advances shall take place on a periodic basis in accordance with the following provisions:

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               (i) Agent shall request settlement (“Settlement”) with Lenders on at least a weekly basis, or on a more frequent basis if so determined by Agent, (A) on behalf of Bank of America, with respect to each outstanding Non-Ratable Loan, (B) for itself, with respect to each Agent Advance, and (C) with respect to collections received, in each case, by notifying Lenders of such requested Settlement by telecopy, telephone or other similar form of transmission, of such requested Settlement, no later than 12:00 p.m., noon (New York, New York time) on the date of such requested Settlement (the “Settlement Date”). Each Lender (other than Bank of America in the case of Non-Ratable Loans, and Agent in the case of Agent Advances) shall make the amount of such Lender’s Pro Rata Share of the outstanding principal amount of the Non-Ratable Loans and Agent Advances with respect to which Settlement is requested available to Agent, to such account of Agent as Agent may designate, not later than 3:00 p.m. (New York, New York time), on the Settlement Date applicable thereto, which may occur before or after the occurrence or during the continuation of a Default or an Event of Default and whether or not the applicable conditions precedent set forth in Section Six have then been satisfied. Such amounts made available to Agent shall be applied against the amounts of the applicable Non-Ratable Loan or Agent Advance and, together with the portion of such Non-Ratable Loan or Agent Advance representing Bank of America’s Pro Rata Share thereof, shall constitute Revolving Loans of such Lenders. If any such amount is not made available to Agent by any Lender on the Settlement Date applicable thereto, Agent shall (A) on behalf of Bank of America, with respect to each outstanding Non-Ratable Loan, and (B) for itself, with respect to each Agent Advance, be entitled to recover such amount on demand from such Lender together with interest thereon at the Federal Funds Rate for the first three (3) days from and after the Settlement Date and thereafter at the Interest Rate then applicable to the Revolving Loans.

               (ii) Notwithstanding the foregoing, not more than one (1) Business Day after demand is made by Agent (whether before or after the occurrence of a Default or an Event of Default and regardless of whether Agent has requested a Settlement with respect to a Non-Ratable Loan or Agent Advance), each other Lender (A) shall irrevocably and unconditionally purchase and receive from Bank of America or the Agent, as applicable, without recourse or warranty, an undivided interest and participation in such Non-Ratable Loan or Agent Advance equal to such Lender’s Pro Rata Share of such Non-Ratable Loan or Agent Advance and (B) if Settlement has not previously occurred with respect to such Non-Ratable Loans or Agent Advances, upon demand by Bank of America or Agent, as applicable, shall pay to Bank of America or Agent, as applicable, as the purchase price of such participation an amount equal to one hundred percent (100%) of such Lender’s Pro Rata Share of such Non-Ratable Loans or Agent Advances. If such amount is not in fact made available to Agent by any Lender, Agent shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Federal Funds Rate for the first three (3) days from and after such demand and thereafter at the Interest Rate then applicable to Base Rate Revolving Loans.

               (iii) From and after the date, if any, on which any Lender purchases an undivided interest and participation in any Non-Ratable Loan or Agent Advance pursuant to clause (ii) preceding, Agent shall promptly distribute to such Lender, such Lender’s Pro Rata Share of all payments of principal and interest and all proceeds of Collateral received by the Agent in respect of such Non-Ratable Loan or Agent Advance.

               (iv) Between Settlement Dates, Agent, to the extent no Agent Advances are outstanding, may pay over to Bank of America any payments received by Agent, which in accordance with the terms of this Agreement would be applied to the reduction of the

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Base Rate Revolving Loans, for application to Bank of America’s Base Rate Revolving Loans including Non-Ratable Loans. If, as of any Settlement Date, collections received since the then immediately preceding Settlement Date have been applied to Bank of America’s Revolving Loans (other than to Non-Ratable Loans or Agent Advances in which such Lender has not yet funded its purchase of a participation pursuant to subparagraph 2.2(j)(ii) above), as provided for in the previous sentence, Bank of America shall pay to Agent for the accounts of the Lenders, to be applied to the outstanding Revolving Loans of such Lenders, an amount such that each Lender shall, upon receipt of such amount, have, as of such Settlement Date, its Pro Rata Share of the Revolving Loans. During the period between Settlement Dates, Bank of America with respect to Non-Ratable Loans, Agent with respect to Agent Advances, and each Lender with respect to the Revolving Loans other than Non-Ratable Loans and Agent Advances, shall be entitled to interest at the applicable rate or rates payable under this Agreement on the actual average daily amount of funds employed by Bank of America, Agent and the other Lenders.

          (k) Notation. Agent shall record on its books the principal amount of the Revolving Loans owing to each Lender, including the Non-Ratable Loans owing to Bank of America, and the Agent Advances owing to Agent, from time to time. In addition, each Lender is authorized, at such Lender’s option, to note the date and amount of each payment or prepayment of principal of such Lender’s Revolving Loans in its books and records, including computer records, such books and records constituting presumptive evidence, absent manifest error, of the accuracy of the information contained therein.

          (l) Lenders’ Failure to Perform. All Revolving Loans (other than Non-Ratable Loans and Agent Advances) shall be made by Lenders simultaneously and in accordance with their Pro Rata Shares. It is understood that (i) no Lender shall be responsible for any failure by any other Lender to perform its obligation to make any Revolving Loans hereunder, nor shall any Commitment of any Lender be increased or decreased as a result of any failure by any other Lender to perform its obligation to make any Revolving Loans hereunder, (ii) no failure by any Lender to perform its obligation to make any Revolving Loans hereunder shall excuse any other Lender from its obligation to make any Revolving Loans hereunder, and (iii) the obligations of each Lender hereunder shall be several, not joint and several.

          (m) Loans under Existing Loan Agreement. The Borrowers acknowledge and agree that as of the Closing Date immediately prior to the execution of this Agreement, (i) the outstanding principal amount of Revolving Loans under the Existing Loan Agreement equals $206,219,200.37 (as of close of business January 17, 2012) and that such Revolving Loans are continued as Revolving Loans hereunder, and (ii) there are no Letters of Credit outstanding under the Existing Loan Agreement. All Commitments (as defined in the Existing Loan Agreement) under the Existing Loan Agreement shall hereinafter be assigned or re-allocated among the Commitments hereunder, and after giving effect hereto, the percentages of the Commitments are as set forth on the signature pages of this Agreement. Notwithstanding anything set forth herein to the contrary, in order to effect the continuation of the outstanding Loans contemplated by the preceding sentence, the amount to be funded on the Closing Date by each Lender hereunder in respect of its Commitments shall be reduced by the principal amount of such Lender’s Loans under the Existing Loan Agreement outstanding on the Closing Date.

     2.3 Books and Records; Monthly Statements. Each Borrower agrees that Agent’s and each Lender’s books and records showing the Obligations and the transactions pursuant to this Agreement and the other Loan Documents shall be admissible in any action or proceeding

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arising therefrom, and shall constitute rebuttably presumptive proof thereof, irrespective of whether any Obligation is also evidenced by a promissory note or other instrument. Agent will provide to Borrowers a monthly statement of Loans, payments, and other transactions pursuant to this Agreement. Such statement shall be deemed correct, accurate, and binding on Borrowers and an account stated (except for reversals and reapplications of payments made as provided in Paragraph 2.4 and corrections of errors discovered by Agent), unless Borrowers notify Agent in writing to the contrary within thirty (30) days after such statement is rendered. In the event a timely written notice of objections is given by Borrowers, only the items to which exception is expressly made will be considered to be disputed by Borrowers.

     2.4 Apportionment Application and Reversal of Payments. Principal and interest payments shall be apportioned ratably among Lenders (according to the unpaid principal balance of the Loans to which such payments relate held by each Lender) and payments of the fees shall, as applicable, be apportioned ratably among Lenders. All payments shall be remitted to Agent and all such payments not relating to principal or interest of specific Loans, or not constituting payment of specific fees, and all proceeds of Collateral received by Agent, shall be applied, ratably, subject to the provisions of this Agreement, first, to pay any fees, indemnities or expense reimbursements (excluding, however, any such amounts relating to Bank Products) then due to Agent from Borrowers; second, to pay any fees or expense reimbursements then due to Lenders from the Borrowers; third, to pay interest due in respect of all Revolving Loans, including Non-Ratable Loans and Agent Advances; fourth, to pay or prepay principal of the Non-Ratable Loans and Agent Advances; fifth, to pay or prepay principal of the Revolving Loans (other than Non-Ratable Loans and Agent Advances) and unpaid reimbursement obligations in respect of Letters of Credit; and sixth, to the payment of any other Obligation (including any amounts relating to Bank Products) due to Agent or any Lender by Borrowers. Notwithstanding anything to the contrary contained in this Agreement, unless so directed by Borrowers, or unless an Event of Default has occurred and is continuing, neither Agent nor any Lender shall apply any payments which it receives to any LIBOR Revolving Loan, except (a) on the expiration date of the Interest Period applicable to any such LIBOR Revolving Loan, or (b) in the event, and only to the extent, that there are no outstanding Base Rate Revolving Loans. Agent shall promptly distribute to each Lender, pursuant to the applicable wire transfer instructions received from each Lender in writing, such funds as it may be entitled to receive, subject to a Settlement delay as provided for in subparagraph 2.2(j). Agent and Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Obligations.

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     2.5 Interest.

          (a) Interest Rates. All outstanding Obligations (other than Bank Product Obligations) shall bear interest on the unpaid principal amount thereof (including, to the extent permitted by law, on interest thereon not paid when due) from the date made until paid in full in cash at a rate determined by reference to the Base Rate or the LIBOR Rate and subparagraphs 2.5(a)(i) or (ii), as applicable, but not to exceed the Maximum Rate described in Paragraph 2.7. Subject to the provisions of Paragraph 2.6, any of the Loans may be converted into, or continued as, Base Rate Revolving Loans or LIBOR Revolving Loans in the manner provided in Paragraph 2.6. If at any time Loans are outstanding with respect to which notice has not been delivered to Agent in accordance with the terms of this Agreement specifying the basis for determining the interest rate applicable thereto, then those Loans shall be Base Rate Revolving Loans and shall bear interest at a rate determined by reference to the Base Rate until notice to the contrary has been given to Agent and such notice has become effective. Except as otherwise provided herein, the outstanding Obligations (other than Bank Product Obligations) shall bear interest as follows:

               (i) For all Revolving Loans and such other Obligations which are not LIBOR Revolving Loans, then at a fluctuating per annum rate equal to the Base Rate plus the Applicable Margin; and

               (ii) For all Revolving Loans and such other Obligations which are LIBOR Revolving Loans, then at a per annum rate equal to the LIBOR Rate (but no less than 1.00%) plus the Applicable Margin.

Each change in the Base Rate shall be reflected in the interest rate described in clause (i) above as of the effective date(s) thereof, as provided in the definition of “Base Rate” in Paragraph 1.1 above. All interest charges shall be computed on the basis of a year of 360 days and actual days elapsed (which results in more interest being paid than if computed on the basis of a 365-day year). Interest accrued on all Loans will be payable in arrears on the last day of each month for such month and on the Maturity Date and each Borrower expressly authorizes Agent to charge the Loan Account for the purpose of paying such interest as provided in Paragraph 2.10(d).

          (b) Default Rate. If any Event of Default occurs and is continuing, then, while any such Event of Default is outstanding, all of the Obligations (other than Bank Product Obligations) shall bear interest at the Default Rate applicable thereto.

          (c) Bank Product Obligations. Notwithstanding anything to the contrary contained herein, all Bank Product Obligations shall bear interest, if any, at the applicable rate(s) set forth in such Hedge Agreements or such other agreements and documents governing the Bank Products.

     2.6 Conversion and Continuation Elections.

          (a) Borrowers may, upon irrevocable written notice to Agent in accordance with subparagraph 2.6(b):

               (i) elect, as of any Business Day, in the case of Base Rate Revolving Loans to convert any such Loans (or any part thereof in an amount not less than $5,000,000.00, or that is in an integral multiple of $1,000,000.00 in excess thereof) into LIBOR Revolving Loans; or

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               (ii) elect, as of the last day of the applicable Interest Period, to continue any LIBOR Revolving Loans having Interest Periods expiring on such day (or any part thereof in an amount not less than $5,000,000.00, or that is in an integral multiple of $1,000,000.00 in excess thereof);

provided, that if at any time the aggregate amount of LIBOR Revolving Loans in respect of any Borrowing is reduced, by payment, prepayment, or conversion of part thereof to be less than $5,000,000.00, such LIBOR Revolving Loans shall automatically convert into Base Rate Revolving Loans, and on and after such date the right of Borrowers to continue such Loans as, and convert such Loans into, LIBOR Revolving Loans, as the case may be, shall terminate, and provided further that if the notice shall fail to specify the duration of the Interest Period, such Interest Period shall be one month.

          (b) Borrowers shall deliver a Notice of Conversion/Continuation in the form attached hereto as Exhibit “B”, to be received by Agent not later than 11:00 a.m. (New York, New York time) at least three Business Days in advance of the Conversion/Continuation Date, if the Loans are to be converted into or continued as LIBOR Revolving Loans and specifying: (i) the proposed Conversion/Continuation Date; (ii) the aggregate amount of Loans to be converted or renewed; (iii) the type of Loans resulting from the proposed conversion or continuation; and (iv) the duration of the requested Interest Period.

          (c) If, upon the expiration of any Interest Period applicable to LIBOR Revolving Loans, Borrowers have failed to select timely a new Interest Period to be applicable to LIBOR Revolving Loans or if any Default or Event of Default then exists, Borrowers shall be deemed to have elected to convert such LIBOR Revolving Loans into Base Rate Revolving Loans effective as of the expiration date of such Interest Period.

          (d) Agent will promptly notify each Lender of its receipt of a Notice of Conversion/Continuation. All conversions and continuations shall be made ratably according to the respective outstanding principal amounts of the Loans with respect to which the notice was given held by each Lender.

          (e) During the existence of a Default or Event of Default, Borrowers may not elect to have a Loan converted into or continued as a LIBOR Revolving Loan.

          (f) After giving effect to any conversion or continuation of Loans, there may not be more than five (5) different Interest Periods in effect.

     2.7 Maximum Interest Rate. In no event shall any interest rate provided for hereunder exceed the maximum rate permissible for corporate borrowers under applicable law for loans of the type provided for hereunder (the “Maximum Rate”). If, in any month, any interest rate, absent such limitation, would have exceeded the Maximum Rate, then the interest rate for that month shall be the Maximum Rate, and, if in future months, that interest rate would otherwise be less than the Maximum Rate, then that interest rate shall remain at the Maximum Rate until such time as the amount of interest paid hereunder equals the amount of interest which would have been paid if the same had not been limited by the Maximum Rate. In the event that, upon payment in full of the Obligations under this Agreement, the total amount of interest paid or accrued under the terms of this Agreement is less than the total amount of interest which would, but for this Paragraph 2.7, have been paid or accrued if the interest rates otherwise set forth in

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this Agreement had at all times been in effect, then Borrowers shall, to the extent permitted by applicable law, pay Agent, for the account of Lenders, an amount equal to the difference between (a) the lesser of (i) the amount of interest which would have been charged if the Maximum Rate had, at all times, been in effect or (ii) the amount of interest which would have accrued had the interest rates otherwise set forth in this Agreement, at all times, been in effect and (b) the amount of interest actually paid or accrued under this Agreement. In the event that a court determines that Agent and/or any Lender has received interest and other charges hereunder in excess of the Maximum Rate, such excess shall be deemed received on account of, and shall automatically be applied to reduce, the Obligations other than interest, in the inverse order of maturity, and if there are no Obligations outstanding, the Agent and/or such Lender shall refund to Borrowers such excess.

     2.8 Unused Line Fee. Borrowers agree to pay, on the fifteenth day of each month and on the Maturity Date, to Agent, for the account of Lenders, in accordance with their respective Pro Rata Shares, an unused line fee (the “Unused Line Fee”) equal to one-half of one percent (0.50%) per annum on the average closing daily amount by which the Total Credit Facility exceeded the sum of the average daily outstanding amount of Revolving Loans and the average daily undrawn face amount of outstanding Letters of Credit during the immediately preceding month or shorter period if calculated on the Maturity Date. The Unused Line Fee shall be computed on the basis of a 360-day year for the actual number of days elapsed. All payments received by Agent shall be deemed to be credited to Borrowers’ Loan Account immediately upon receipt for purposes of calculating the Unused Line Fee pursuant to this Paragraph 2.8.

     2.9 Payment of Revolving Loans. Borrowers shall repay the outstanding principal balance of the Revolving Loans, plus all accrued but unpaid interest thereon, on the Maturity Date. Borrowers may prepay Revolving Loans at any time, and reborrow subject to the terms of this Agreement; provided, however, that with respect to any LIBOR Revolving Loans prepaid by Borrowers prior to the expiration date of the Interest Period applicable thereto, Borrowers agree to pay to Agent for the account of Lenders the amounts described in Paragraph 2.14. In addition, and without limiting the generality of the foregoing, Borrowers shall pay to Agent, for the account of Lenders, the amount, without duplication, by which the sum of outstanding Revolving Loans and the aggregate amount of Pending Revolving Loans exceeds the Availability with any such amount to be payable immediately without notice or demand.

     2.10 Payments by Borrowers.

          (a) All payments to be made by Borrowers shall be made without set-off, recoupment or counterclaim. Except as otherwise expressly provided herein, all payments by Borrowers shall be made to Agent for the account of Lenders, at Agent’s address and shall be made in Dollars and in immediately available funds, no later than 11:00 a.m. (New York, New York time) on the date specified herein. Any payment received by Agent later than 11:00 a.m. (New York, New York time) shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue.

          (b) Subject to the provisions set forth in the definition of “Interest Period” herein, whenever any payment is due on a day other than a Business Day, such payment shall be made on the following Business Day, and such extension of time shall in such case be included in the computation of interest or fees, as the case may be.

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          (c) Unless Agent receives notice from Borrower prior to the date on which any payment is due to the Lenders that Borrowers will not make such payment in full as and when required, Agent may assume that Borrowers have made such payment in full to Agent on such date in immediately available funds and Agent may (but shall not be so required), in reliance upon such assumption, distribute to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent Borrowers have not made such payment in full to Agent, each Lender shall repay to Agent on demand such amount distributed to such Lender, together with interest thereon at the Federal Funds Rate for each day from the date such amount is distributed to such Lender until the date repaid.

          (d) All payments of principal, interest, reimbursement obligations in connection with Letters of Credit and any related credit support for Letters of Credit, fees, premiums and other sums payable hereunder, including all reimbursement for expenses pursuant to Paragraph 13.1, may, at the option of Agent, in its sole discretion, subject only to the terms of this subparagraph 2.10(d), be paid from the proceeds of Revolving Loans made hereunder, whether made following a request by Borrowers pursuant to Paragraph 2.2 or a deemed request as provided in this subparagraph 2.10(d). Each Borrower hereby irrevocably authorizes Agent to charge the Loan Account for the purpose of paying principal, interest, reimbursement obligations in connection with Letters of Credit and any related credit support for Letters of Credit, fees, premiums and other sums payable hereunder, including reimbursing expenses pursuant to Paragraph 13.1, and agrees that all such amounts charged shall constitute Revolving Loans (including Non-Ratable Loans and Agent Advances) and that all such Revolving Loans so made shall be deemed to have been requested by Borrowers pursuant to Paragraph 2.2.

     2.11 Taxes.

          (a) Any and all payments by Borrowers to Agent and each Lender under this Agreement and any other Loan Document shall be made free and clear of, and without deduction or withholding for, any Taxes, unless otherwise required by applicable law. In addition, Borrowers shall pay all Other Taxes.

          (b) SUBJECT TO PARAGRAPH 12.9, BORROWERS AGREE TO INDEMNIFY AND HOLD HARMLESS AGENT AND EACH LENDER FOR THE FULL AMOUNT OF INDEMNIFIED TAXES (INCLUDING ANY INDEMNIFIED TAXES IMPOSED BY ANY JURISDICTION ON AMOUNTS PAYABLE UNDER THIS PARAGRAPH) PAID BY AGENT OR ANY LENDER AND ANY LIABILITY (INCLUDING PENALTIES, INTEREST, ADDITIONS TO TAX AND EXPENSES) ARISING THEREFROM OR WITH RESPECT THERETO, WHETHER OR NOT SUCH INDEMNIFIED TAXES WERE CORRECTLY OR LEGALLY ASSERTED. PAYMENT UNDER THIS INDEMNIFICATION SHALL BE MADE WITHIN 30 DAYS AFTER THE DATE AGENT OR SUCH LENDER MAKES WRITTEN DEMAND THEREFOR.

          (c) If Borrowers shall be required by law to deduct or withhold any Taxes or Other Taxes from or in respect of any sum payable hereunder to Agent or any Lender, then:

               (i) If such Taxes or Other Taxes are Indemnified Taxes and subject to Paragraph 12.9, the sum payable shall be increased as necessary so that after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Paragraph) Agent or such Lender, as the case may be, receives an

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amount equal to the sum it would have received had no such deductions or withholdings been made;

               (ii) Borrowers shall make such deductions and withholdings;

               (iii) Borrowers shall pay the full amount deducted or withheld to the relevant taxing authority or other authority in accordance with applicable law; and

               (iv) Borrowers shall also pay to each Lender or Agent for the account of such Lender, at the time interest is paid, all additional amounts which the respective Lender specifies as necessary to preserve the after-tax yield such Lender would have received if such Taxes or Other Taxes had not been imposed.

          (d) Within 30 days after the date of any payment by Borrowers of Indemnified Taxes, Borrowers shall furnish Agent the original or a certified copy of a receipt evidencing payment thereof, or other evidence of payment reasonably satisfactory to Agent.

          (e) If Borrowers are required to pay additional amounts to Agent or any Lender pursuant to subparagraph (c) of this Paragraph, if any Lender requests compensation under Paragraph 2.13 or if any Lender gives a notice pursuant to Paragraph 2.12., then such Lender shall use reasonable efforts (consistent with legal and regulatory restrictions) to change the jurisdiction of its Lending Office so as to eliminate any such additional payment by Borrowers which may thereafter accrue, if such change in the judgment of such Lender is not otherwise disadvantageous to such Lender.

     2.12 Illegality.

          (a) If any Lender determines that the introduction of any Requirement of Law after the Closing Date, or any change in any Requirement of Law after the Closing Date, or in the interpretation or administration of any Requirement of Law after the Closing Date, has made it unlawful, or that any central bank or other Governmental Authority after the Closing Date has asserted that it is unlawful, for any Lender or its applicable Lending Office to make LIBOR Revolving Loans, then, on notice thereof by such Lender to Borrowers through Agent, any obligation of such Lender to make LIBOR Revolving Loans shall be suspended until such Lender notifies Agent and Borrowers that the circumstances giving rise to such determination no longer exist.

          (b) If any Lender determines that it is unlawful to maintain any LIBOR Revolving Loan, Borrowers shall, upon their receipt of notice of such fact and demand from such Lender (with a copy to Agent), prepay in full such LIBOR Revolving Loans of such Lender then outstanding, together with interest accrued thereon and amounts required under Paragraph 2.14, either on the last day of the Interest Period thereof, if such Lender may lawfully continue to maintain such LIBOR Revolving Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such LIBOR Revolving Loan. If Borrowers are required to so prepay any LIBOR Revolving Loan, then concurrently with such prepayment, Borrowers shall borrow from the affected Lender, in the amount of such repayment, a Base Rate Revolving Loan.

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     2.13 Increased Costs and Reduction of Return.

          (a) If any Lender determines that, due to either (i) the introduction of or any change in the interpretation of any law or regulation after the Closing Date or (ii) the compliance by such Lender with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law) after the Closing Date, there shall be any increase in the cost to such Lender of agreeing to make or making, funding or maintaining any LIBOR Revolving Loans, then Borrowers shall be liable for, and shall from time to time, upon demand (with a copy of such demand to be sent to the Agent), pay to Agent for the account of such Lender, additional amounts as are sufficient to compensate such Lender for increased costs.

          (b) If any Lender shall have determined that (i) the introduction of any Capital Adequacy Regulation after the Closing Date, (ii) any change in any Capital Adequacy Regulation after the Closing Date, (iii) any change in the interpretation or administration of any Capital Adequacy Regulation after the Closing Date by any central bank or other Governmental Authority charged with the interpretation or administration thereof, or (iv) compliance by such Lender or any corporation controlling such Lender with any Capital Adequacy Regulation, affects or would affect the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender and (taking into consideration such Lender’s or such corporation’s policies with respect to capital adequacy and such Lender’s desired return on capital) determines that amount of such capital is increased as a consequence of its lending commitment, loans, credits or obligations under this Agreement then, upon demand of such Lender to Borrowers through Agent, Borrowers shall pay to such Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate such Lender for such increase.

     2.14 Funding Losses. Borrowers shall reimburse each Lender and hold each Lender harmless from any loss or expense which such Lender may sustain or incur as a consequence of:

          (a) the failure of Borrowers to make on a timely basis any payment of principal of any LIBOR Revolving Loan;

          (b) the failure of Borrowers to borrow, continue or convert a Loan after Borrowers have given (or is deemed to have given) a Notice of Borrowing or a Notice of Conversion/Continuation; or

          (c) the prepayment or other payment (including after acceleration thereof) of any LIBOR Revolving Loan on a day that is not the last day of the relevant Interest Period;

including any such loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its LIBOR Revolving Loans or from fees payable to terminate the deposits from which such funds were obtained.

     2.15 Inability to Determine Rates. If Agent determines that for any reason adequate and reasonable means do not exist for determining the LIBOR Rate for any requested Interest Period with respect to a proposed LIBOR Revolving Loan, or that the LIBOR Rate for any requested Interest Period with respect to a proposed LIBOR Revolving Loan does not adequately and fairly reflect the cost to Lenders of funding such Loan, Agent will promptly so notify

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Borrower and each Lender. Thereafter, the obligation of Lenders to make or maintain LIBOR Revolving Loans hereunder shall be suspended until Agent revokes such notice in writing. Upon receipt of such notice, Borrowers may revoke any Notice of Borrowing or Notice of Conversion/Continuation then submitted by it. If Borrowers do not revoke such Notice, Lenders shall make, convert or continue the Loans, as proposed by Borrowers, in the amount specified in the applicable notice submitted by Borrowers, but such Loans shall be made, converted or continued as Base Rate Revolving Loans instead of LIBOR Revolving Loans.

     2.16 Certificates of Lenders. Any Lender, when claiming reimbursement or compensation under this Section Two, shall deliver to Borrowers (with a copy to Agent) a certificate setting forth in reasonable detail the amount payable to such Lender hereunder and such certificate shall be conclusive and binding on Borrowers in the absence of manifest error.

     2.17 Survival. The agreements and obligations of Borrowers in this Section Two shall survive the payment of all other Obligations.

     2.18 Letters of Credit.

          (a) Issuance. Subject to the terms and conditions of this Agreement, the Letter of Credit Issuer shall, upon the Borrowers’ request from time to time, cause stand-by letters of credit to be issued for the Borrowers’ account (the “Letters of Credit”). The Letter of Credit Issuer will not cause to be opened any Letter of Credit if: (i) the maximum face amount of the requested Letter of Credit would exceed the Unused Letter of Credit Subfacility at such time; (ii) the maximum face amount of the requested Letter of Credit, and all commissions, fees, and charges due from Borrowers to Letter of Credit Issuer in connection with the opening thereof, would cause the Borrowers’ remaining Excess Availability to be less than zero at such time or would exceed the Total Credit Facility at such time; or (iii) the expiration date of the Letter of Credit would exceed the Maturity Date or be greater than twelve (12) months from the date of issuance. All payments made and expenses incurred by the Letter of Credit Issuer pursuant to or in connection with the Letters of Credit will, at the Agent’s discretion, be charged to the Borrowers’ Loan Account as Base Rate Revolving Loans.

          (b) Other Conditions. In addition to being subject to the satisfaction of the applicable conditions precedent contained in Section Six, the obligation of the Letter of Credit Issuer to cause to be issued any Letter of Credit is subject to the following conditions precedent having been satisfied in a manner satisfactory to the Agent:

               (i) The Borrowers shall have delivered to the Letter of Credit Issuer, at such times and in such manner as such Letter of Credit Issuer may prescribe, an application in form and substance satisfactory to the Letter of Credit Issuer for the issuance of the Letter of Credit and such other documents as may be reasonably required pursuant to the terms thereof, and the form and terms of the proposed Letter of Credit shall be satisfactory to the Agent and Letter of Credit Issuer; and

               (ii) As of the date of issuance, no order of any court, arbitrator or Governmental Authority shall purport by its terms to enjoin or restrain money center banks generally from issuing letters of credit of the type and in the amount of the proposed Letter of Credit, and no law, rule or regulation applicable to money center banks generally and no request or directive (whether or not having the force of law) from any Governmental Authority with

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jurisdiction over money center banks generally shall prohibit, or request that the Letter of Credit Issuer refrain from, the issuance of letters of credit generally or the issuance of such Letters of Credit.

          (c) Issuance of Letters of Credit.

               (i) Request for Issuance. The Borrowers shall give the Agent two (2) Business Days’ prior written notice of the Borrowers’ request for the issuance of a Letter of Credit. Such notice shall be irrevocable and shall specify the original face amount of the Letter of Credit requested, the effective date (which date shall be a Business Day) of issuance of such requested Letter of Credit, whether such Letter of Credit may be drawn in a single or in partial draws, the date on which such requested Letter of Credit is to expire (which date shall be a Business Day), the purpose for which such Letter of Credit is to be issued, and the beneficiary of the requested Letter of Credit. The Borrower shall attach to such notice the proposed form of the Letter of Credit that the Agent is requested to cause to be issued.

               (ii) Responsibilities of the Agent; Issuance. Agent shall determine, as of the Business Day immediately preceding the requested effective date of issuance of the Letter of Credit set forth in the notice from Borrowers pursuant to subparagraph 2.18(c)(1), (A) the amount of the applicable Unused Letter of Credit Subfacility and (B) the Availability and Excess Availability as of such date. If (i) the undrawn amount of the requested Letter of Credit is not greater than the Unused Letter of Credit Subfacility and (ii) the amount of such requested Letter of Credit and all commissions, fees, and charges due from Borrowers in connection with the opening thereof would not exceed the Excess Availability, Agent shall, so long as the other conditions hereof and of Section Six are met, cause the requested Letter of Credit to be issued on such requested effective date of issuance.

               (iii) Notice of Issuance. On each Settlement Date, Agent shall give notice to each Lender of the issuance of all Letters of Credit issued since the last Settlement Date.

               (iv) No Extensions or Amendment. The Agent shall not be obligated to cause any Letter of Credit to be extended or amended unless (A) the requirements of this Paragraph 2.18 are met as though a new Letter of Credit were being requested and issued, and (B) the Agent consents to such extension or amendment, which it may withhold in its sole and absolute discretion.

          (d) Payments Pursuant to Letters of Credit.

               (i) Payment of Letter of Credit Obligations. The Borrowers agree to reimburse the Letter of Credit Issuer for any draw under any Letter of Credit immediately upon demand, and to pay the issuer of the Letter of Credit (or the Agent, for the account of such issuer) the amount of all other obligations and other amounts payable to such issuer under or in connection with any Letter of Credit immediately when due, irrespective of any claim, setoff, defense or other right which the Borrowers may have at any time against such issuer or any other Person.

               (ii) Revolving Loans to Satisfy Reimbursement Obligations. In the event that the issuer of any Letter of Credit honors a draw under such Letter of Credit and the

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Borrowers shall not have repaid such amount to the issuer of such Letter of Credit pursuant to subparagraph 2.18(d)(i), such drawing shall constitute a request by the Borrowers to the Agent for a Borrowing of a Base Rate Revolving Loan in the amount of such drawing. The Funding Date with respect to such Borrowing shall be the date of such drawing.

          (e) Participations.

               (i) Purchase of Participations. Immediately upon issuance of any Letter of Credit in accordance with subparagraph 2.18(c), each Lender shall be deemed to have irrevocably and unconditionally purchased and received without recourse or warranty, an undivided interest and participation equal to such Lender’s Pro Rata Share of the face amount of such Letter of Credit (including all obligations of Borrowers with respect thereto, and any security therefor or guaranty pertaining thereto).

               (ii) Sharing of Reimbursement Obligation Payments. Whenever Agent receives a payment from Borrowers on account of reimbursement obligations in respect of a Letter of Credit as to which the Agent has previously received for the account of the Letter of Credit Issuer thereof payment from a Lender pursuant to subparagraph 2.18(d)(ii), Agent shall promptly pay to such Lender such Lender’s Pro Rata Share of such payment from Borrowers in Dollars. Each such payment shall be made by Agent on the Business Day on which Agent receives immediately available funds paid to such Person pursuant to the immediately preceding sentence, if received prior to 3:00 p.m. (New York, New York time) on such Business Day and otherwise on the next succeeding Business Day.

               (iii) Documentation. Upon the request of any Lender, Agent shall furnish to such Lender copies of any Letter of Credit, reimbursement agreements executed in connection therewith, applications for any Letter of Credit, and such other documentation as may reasonably be requested by such Lender.

               (iv) Obligations Irrevocable. The obligations of each Lender to make payments to Agent with respect to any Letter of Credit or with respect to their participation therein or with respect to the Revolving Loans made as a result of a drawing under a Letter of Credit and the obligations of Borrower for whose account the Letter of Credit was issued to make payments to Agent, for the account of Lenders, shall be irrevocable, not subject to any qualification or exception whatsoever, including any of the following circumstances:

                    (1) any lack of validity or enforceability of this Agreement or any of the other Loan Documents;

                    (2) the existence of any claim, setoff, defense or other right which Borrowers may have at any time against a beneficiary named in a Letter of Credit or any transferee of any Letter of Credit (or any Person for whom any such transferee may be acting), any Lender, Agent, the issuer of such Letter of Credit, or any other Person, whether in connection with this Agreement, any Letter of Credit, the transactions contemplated herein or any unrelated transactions (including any underlying transactions between Borrowers or any other Person and the beneficiary named in any Letter of Credit);

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

                    (4) the surrender or impairment of any security for the performance or observance of any of the terms of any of the Loan Documents;

                    (5) the occurrence of any Default or Event of Default; or

                    (6) the failure of Borrowers to satisfy the applicable conditions precedent set forth in Section Six.

          (f) Recovery or Avoidance of Payments. In the event any payment by or on behalf of Borrowers received by Agent with respect to any Letter of Credit and distributed by Agent to Lenders on account of their respective participations therein is thereafter set aside, avoided or recovered from Agent in connection with any receivership, liquidation or bankruptcy proceeding, Lenders shall, upon demand by Agent, pay to Agent their respective Pro Rata Shares of such amount set aside, avoided or recovered, together with interest at the rate required to be paid by Agent upon the amount required to be repaid by it.

          (g) Compensation for Letters of Credit. The Borrowers agree to pay to the Agent, for the account of the Lenders, in accordance with their respective Pro Rata Shares, with respect to each Letter of Credit, the Letter of Credit Fee specified in, and in accordance with the terms of, Paragraph 2.19.

          (h) Indemnification; Exoneration; Power of Attorney.

               (i) INDEMNIFICATION. IN ADDITION TO AMOUNTS PAYABLE AS ELSEWHERE PROVIDED IN THIS PARAGRAPH 2.18, THE BORROWERS HEREBY AGREE TO PROTECT, INDEMNIFY, PAY AND SAVE THE LENDERS AND THE AGENT HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, LIABILITIES, DAMAGES, LOSSES, COSTS, CHARGES AND EXPENSES (INCLUDING ANY REASONABLE ATTORNEYS’ FEES) WHICH ANY LENDER OR THE AGENT MAY INCUR OR BE SUBJECT TO AS A CONSEQUENCE, DIRECT OR INDIRECT, OF THE ISSUANCE OF ANY LETTER OF CREDIT OR THE PROVISION OF ANY CREDIT SUPPORT OR ENHANCEMENT IN CONNECTION THEREWITH UNLESS RESULTING FROM SUCH LENDER’S OR THE AGENT’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. THE AGREEMENT IN THIS SUBPARAGRAPH 2.18(H)(I) SHALL SURVIVE PAYMENT OF ALL OBLIGATIONS AND THE TERMINATION OF THIS AGREEMENT.

               (ii) Assumption of Risk by the Borrowers. As among the Borrowers, the Lenders and the Agent, the Borrowers assume all risks (except the risk of gross negligence or willful misconduct by any Lender or the Agent) of the acts and omissions of, or misuse of any of the Letters of Credit by, the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, the Lenders and the Agent, when acting in good faith and without gross negligence or willful misconduct, shall not be responsible for: (A) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any Person in connection with the application for and issuance of and presentation of drafts with

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respect to any of the Letters of Credit, even if it should prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (B) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (C) the failure of the beneficiary of any Letter of Credit to comply duly with conditions required in order to draw upon such Letter of Credit; (D) errors, omissions, interruptions, or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (E) errors in interpretation of technical terms; (F) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit or of the proceeds thereof; (G) the misapplication by the beneficiary of any Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (H) any consequences arising from causes beyond the control of the Agent or the Lenders, including, without limitation, any act or omission, whether rightful or wrongful, of any present or future de jure or de facto Public Authority. None of the foregoing shall affect, impair or prevent the vesting of any rights or power of the Agent or any Lender under this Paragraph 2.18.

               (iii) Exoneration. In furtherance and extension, and not in limitation, of the specific provisions set forth above, any action taken or omitted by the Agent or any Lender under or in connection with any of the Letters of Credit or any related certificates, if taken or omitted in the absence of gross negligence or willful misconduct, shall not put the Agent or any Lender under any resulting liability to the Borrowers or relieve the Borrowers of any of its obligations hereunder to any such Person.

               (iv) Indemnification by Lenders. Lenders agree to indemnify each Letter of Credit Issuer (to the extent not reimbursed by Borrowers and without limiting the obligations of Borrowers hereunder) ratably in accordance with their respective Pro Rata Shares, for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including attorneys’ fees) or disbursements of any kind and nature whatsoever that may be imposed on, incurred by or asserted against such Letter of Credit Issuer in any way relating to or arising out of any Letter of Credit or the transactions contemplated thereby or any action taken or omitted by such Letter of Credit Issuer under any Letter of Credit or any Loan Document in connection therewith; provided that no Lender shall be liable for any of the foregoing to the extent it arises from the gross negligence or willful misconduct of the Person to be indemnified. Without limitation of the foregoing, each Lender agrees to reimburse each Letter of Credit Issuer promptly upon demand for its Pro Rata Share of any costs or expenses payable by Borrowers to such Letter of Credit Issuer, to the extent that such Letter of Credit Issuer is not promptly reimbursed for such costs and expenses by Borrowers. The agreement contained in this Paragraph shall survive payment in full of all Obligations.

               (v) Account Party. The Borrowers hereby authorize and direct any Letter of Credit Issuer to name the Borrower as the “Account Party” therein and to deliver to the Agent all instruments, documents and other writings and property received by the Letter of Credit Issuer pursuant to the Letter of Credit, and to accept and rely upon the Agent’s instructions and agreements with respect to all matters arising in connection with the Letter of Credit or the application therefor.

          (i) Supporting Letter of Credit; Cash Collateral. If, notwithstanding the provisions of this Paragraph 2.18 and any other provision of this Agreement, any Letter of Credit

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is outstanding upon the termination of this Agreement, then upon such termination the Borrowers shall deposit with the Agent, for the ratable benefit of the Agent and the Lenders, with respect to each Letter of Credit then outstanding, as the Majority Lenders, in their discretion, shall specify, either (A) a standby letter of credit (a “Supporting Letter of Credit”) in form and substance satisfactory to the Agent, issued by an issuer satisfactory to the Agent in an amount equal to the greatest amount for which such Letter of Credit may be drawn plus any fees and expenses associated with such Letter of Credit, under which Supporting Letter of Credit the Agent is entitled to draw amounts necessary to reimburse the Agent and the Lenders for payments made by the Agent and the Lenders under such Letter of Credit or under any credit support or enhancement provided through the Agent with respect thereto and any fees and expenses associated with such Letter of Credit or credit support, or (B) cash in amounts necessary to reimburse the Agent and the Lenders for payments made by the Agent or the Lenders under such Letter of Credit or under any credit support or enhancement provided through the Agent and any fees and expenses associated with such Letter of Credit or credit support. Such Supporting Letter of Credit or deposit of cash shall be held by the Agent, for the ratable benefit of the Agent and the Lenders, as security for, and to provide for the payment of, the aggregate undrawn amount of such Letters of Credit or such credit support remaining outstanding.

     2.19 Letter of Credit Fee. The Borrowers agree to pay to the Agent, for the account of the Lenders, in accordance with their respective Pro Rata Shares, for each Letter of Credit, a fee (the “Letter of Credit Fee”) equal to three percent (3.00%) per annum of the undrawn face amount of each Letter of Credit issued for the Borrowers’ account at the Borrowers’ request, plus all out-of-pocket costs, fees and expenses incurred by the Agent in connection with the application for, processing of, issuance of, or amendment to any Letter of Credit, which costs, fees and expenses shall include a “fronting fee” payable to such issuer. The Letter of Credit Fee shall be payable monthly in arrears on the fifteenth day of each month following any month in which a Letter of Credit was issued and/or in which a Letter of Credit remains outstanding and on the Maturity Date. The Letter of Credit Fee shall be payable when a Letter of Credit is issued, renewed, extended, or amended, as appropriate for the period of time during which the Letter of Credit will be outstanding. The Letter of Credit Fee shall be computed on the basis of a 360-day year for the actual number of days elapsed. If any Event of Default occurs, then, from the date such Event of Default occurs until it is cured, or if not cured until all Obligations are paid and performed in full, the Letter of Credit Fee shall be increased to five percent (5.00%) per annum.

     2.20 Bank Products. Borrowers may request and Bank of America may, in its sole and absolute discretion, arrange for Borrowers to obtain, from Bank of America, Bank of America’s Affiliates or the other Lenders, Bank Products although Borrowers are not required to do so. To the extent Bank Products are provided by an Affiliate of Bank of America or an Affiliate of a Lender, Borrowers agree to indemnify and hold Bank of America and the Lenders harmless from any and all costs and obligations now or hereafter incurred by Bank of America or any of the Lenders which arise from the indemnity given by Bank of America to its Affiliates or a Lender to its Affiliates related to such Bank Products except for costs or obligations resulting from the gross negligence or willful misconduct of Bank of America or any of the Lenders. The agreement contained in this Paragraph shall survive termination of this Agreement. Each Borrower acknowledges and agrees that the obtaining of Bank Products from Bank of America, Bank of America’s Affiliates or any other Lender (a) is in the sole and absolute discretion of Bank of America, Bank of America’s Affiliates, or other Lender, as applicable and (b) is subject

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to all rules and regulations of Bank of America, Bank of America’s Affiliates or such other Lender, as applicable.

     2.21 Loan Administration.

          (a) Borrower Agent. Each Borrower hereby designates Regional as its representative and agent for all purposes under the Loan Documents (“Borrower Agent”), including requests for Loans and Letters of Credit, designation of interest rates, delivery or receipt of communications with Agent, Bank or any Lender, preparation and delivery of Borrowing Base and financial reports, receipt and payment of Obligations, requests for waivers, amendments or other accommodations, actions under the Loan Documents (including in respect compliance with covenants), and all other dealings with Agent, Bank or any Lender. Borrower Agent, Agent and the Lenders hereby accept such appointment. Agent and Lenders shall be entitled to rely upon, and shall be fully protected in relying upon, any notice or communication (including any notice of Borrowing) delivered by Borrower Agent on behalf of any Borrower. Agent and Lenders may give any notice or communication with a Borrower hereunder to Borrower Agent on behalf of any Borrower. Agent and Lenders may give any notice or communication, with a Borrower hereunder to Borrower Agent on behalf of such Borrower. Agent shall have the right, in its discretion, to deal exclusively with Borrower Agent for any and all purposes under the Loan Documents. Each Borrower agrees that any notice, election, communication, representation, agreement or undertaking made on its behalf by Borrower Agent shall be binding upon and enforceable against it.

          (b) One Obligation. The Loans, Letter of Credit obligations and other Obligations shall constitute one general obligation of Borrowers and (unless otherwise expressly provided in any Loan Document) shall be secured by Agent’s Lien upon all Collateral; provided, however, that Agent and each Lender shall be deemed to be a creditor of, and the holder of a separate claim against, each Borrower to the extent of any Obligations jointly or severally owed by such Borrower.

SECTION THREE — TERM

     3.1 Term of Agreement and Loan Repayment. This agreement shall have a term commencing on the date this Agreement becomes effective, and ending on January 18, 2015, or such earlier date by acceleration or otherwise (“Maturity Date”). The Loan shall be due and payable in full on the Maturity Date without notice or demand and shall be repaid to Agent, for the account of Lenders, by a wire transfer of immediately available funds. Borrowers may terminate this Agreement prior to the Maturity Date by: (a) giving Agent and Lenders at least thirty (30) days prior notice of intention to terminate this Agreement; (b) paying and performing, as appropriate, all Obligations on or prior to the effective date of termination (other than indemnification and other contingent obligations for which no amount is due and owing and for which no claim has been made); (c) paying to Agent, for the account of the Lenders, an early termination fee equal to (i) one percent (1.00%) of the outstanding Obligations in the event the effective date of termination occurs at any time on or prior to January 18, 2013, and (ii) one-half of one percent (0.50%) of the outstanding Obligations in the event the effective date of termination occurs at any time after January 18, 2013 and prior to the Maturity Date; and (d) with respect to any LIBOR Revolving Loans prepaid in connection with such termination prior to the expiration date of the Interest Period applicable thereto, the payment of the amounts

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described in Paragraph 2.14. Notwithstanding the foregoing, upon the occurrence of an Event of Default, Agent may (and shall, at the direction of Majority Lenders) immediately accelerate the Maturity Date and terminate further performance under this Agreement without notice or demand. For the avoidance of doubt, the amendment and restatement of the Existing Agreement shall not constitute a termination of the Existing Agreement for purposes of Section 3.1 thereof.

     3.2 Termination of Security Interests. Notwithstanding termination of this Agreement, until all Obligations have been fully repaid (other than indemnification and other contingent obligations for which no amount is due and owing and for which no claim has been made), Agent, for the account of Lenders, shall retain a security interest in all Collateral existing and thereafter arising and Borrowers shall continue to assign to Agent, for the account of Lenders, all Contracts and security therefor and shall continue to immediately turn over to Agent, in kind, all collections received respecting the Contracts. After termination, and when Agent has received payment in full of all Obligations (other than indemnification and other contingent obligations for which no amount is due and owing and for which no claim has been made), for the account of the Lenders, the security interest created hereby shall terminate and all right to the Collateral shall revert to the Borrowers and Agent shall promptly execute such evidence of termination of all security agreements and release of the security interests given by Borrowers to Agent as Borrower may reasonably request.

SECTION FOUR — SECURITY INTEREST IN COLLATERAL

     4.1 Creation of Security Interest in Collateral. Each Borrower hereby irrevocably and unconditionally grants, transfers, and assigns to Agent, for the benefit of Agent and Lenders, all its right, title, and interest in all the Collateral, whether presently existing or hereafter acquired or arising, in order to secure prompt payment and performance by each Borrower of all its Obligations. Agent’s title and security interest in the Collateral shall attach to all the Collateral without further act by Agent or Borrowers. In the event any Collateral, including proceeds, is evidenced by or consists of Instruments, Borrowers shall, upon the request of Agent, endorse, assign, and deliver to Agent such Instruments.

     4.2 Borrower’s Representations and Warranties Regarding Collateral. Each Borrower represents and warrants to Agent and Lenders that so long as such Borrower is obligated to Agent and Lenders, that:

          (a) the Collateral shall be owned solely by such Borrower, and no other Person, other than Agent and Lenders, has or will have any right, title, interest, claim or lien therein except for Permitted Liens;

          (b) except as specifically consented to in writing by Agent, such Borrower shall not within any one calendar year grant more than two extensions of time for the payment, and shall not compromise for less than the full face value, or release in whole or in part any Person liable for the payment of, or allow any credit whatsoever against, any portion of the Collateral, except for the amount of cash to be paid upon any such Collateral or any instrument or document representing such Collateral, and that the Collateral, including any monies resulting from the lease, rental, sale or other disposition thereof, shall remain free and clear of any liens, excepting for liens hereby granted to Agent and Lenders and Permitted Liens;

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          (c) Such Borrower shall pay and discharge, when due, all taxes, levies, assessments and other charges upon the Collateral, except to the extent the validity thereof is being contested in good faith by proper proceedings which stay the imposition of any penalty, fine or Lien resulting from non-payment thereof and with respect to which adequate reserves in accordance with GAAP have been set aside for the payment thereof; and

          (d) Only Contracts and Security Documents in a form approved in writing by Agent shall be used by such Borrower for all transactions which may now exist and which may exist in the future. No Borrower shall materially vary the terms of such form of Contracts and Security Documents without Agent’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed) or in conflict with any applicable laws.

     4.3 Financing Statements. Each Borrower agrees, at its own expense, to execute financing statements, continuation statements, and assignments of financing statements provided for by the Code, together with any and all other instruments or documents and to take such other action, including delivery, as may be required to perfect or maintain Agent’s security interest in the Collateral, and to execute and record an assignment of any deed of trust or mortgage naming such Borrower as the beneficiary and a Contract Debtor (or any Guarantor) as trustor. Each Borrower hereby (i) authorizes Agent and Agent’s designee to execute and file or record, or file or record without signature as the case may be where permitted by law, at any time any such financing statements, continuation statements, and assignments and amendments thereto on such Borrower’s behalf and (ii) ratifies such authorization to the extent that the Agent has filed any such financing statements, continuation statements and assignments and amendments thereto, prior to the date hereof.

     4.4 Location of Collateral. Each Borrower represents and warrants that except for Collateral which has been delivered to Agent under the terms hereof: (a) Schedule 4.4 is a correct and complete list of the location of all of books and records concerning the Collateral, the locations of the Collateral, and location of all such Borrower’s places of business as of the Closing Date; and (b) the Collateral shall remain at all times in the possession of such Borrower. Each Borrower covenants and agrees that, except for Collateral in the possession of Agent, it will not maintain the Collateral at any location other than those listed in Schedule 4.4, and will not otherwise change or add to those locations, unless it gives Agent at least 30 days prior notice thereof and executes and delivers to Agent any and all financing statements and other documents that Agent reasonably requests in connection therewith. Notwithstanding any provision of this Agreement to the contrary, upon the occurrence and during the continuance of an Event of Default, each Borrower shall upon Agent’s request immediately deliver to Agent all Contracts and related Security Document then existing and thereafter arising.

     4.5 Protection of Collateral; Reimbursement. Each Borrower shall pay all expenses of protecting, storing, insuring, handling, maintaining, and shipping the Collateral and any and all excise, property, sales, and use taxes levied by any state, federal or local authority on any of the Collateral or in respect of the sale thereof.

     If any Borrower fails promptly to pay any portion thereof when due, Agent may, at its option, but shall not be required to, pay the same and charge any Borrower’s account under this Agreement therefor, and each Borrower agrees promptly to reimburse Agent therefor with interest accruing thereon daily at the rate of interest then in effect under the Notes. All sums so paid or incurred by Agent for any of the foregoing and any and all sums for which Borrowers

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may become liable under this Agreement and all reasonable costs and expenses (including Agent’s Expenses) which Agent may incur in enforcing or protecting its lien or rights and interest in the Collateral or any of its rights or remedies under this Agreement or any other agreement between the parties hereto or in respect of any of the transactions occurring thereunder until paid by Borrowers to Agent with interest at the rate of interest then in effect under the Notes, shall be considered as additional indebtedness owing by Borrowers to Agent under this Agreement and, as such, shall be secured by all the Collateral. Except for Agent or Lenders’ gross negligence or willful misconduct, Agent shall not be liable or responsible in any way for the safekeeping of any of the Collateral or for any loss or damage thereto or for any diminution in the value thereof, or for any act or default of any carrier, forwarding agency, or other Person whatsoever, but the same shall be at Borrowers’ sole risk.

     4.6 Release of Collateral. Notwithstanding any other provision of this Agreement to the contrary, upon Borrower’s request, Agent shall release its security interest in any Contract(s) (and the Security Documents related thereto) included in the Collateral so long as (a) Borrower obtains Agent’s prior written consent to such release, which consent shall not be unreasonably withheld, conditioned or delayed; (b) no Default or Event of Default exists at the time such Contract(s) is to be released; (c) Borrower has entered into a written contract for the sale of such Contract(s) and has delivered to Agent a fully executed copy of such written contract; (d) if the Borrowers have no Excess Availability after giving effect to the sale, either (i) Borrower pledges to Agent additional Collateral equivalent to such Contract(s) being released, or (ii) Borrower reduces the outstanding, unpaid principal balance of the Notes through payment in an amount equal to the sale price of such Contract(s) being released in the form of cash or the wire transfer of immediately available funds; and (e) immediately following the pledging of additional Collateral or payment of the Notes, a Default or Event of Default does not exist under this Agreement. Upon satisfaction of all of the foregoing conditions, Agent shall release its security interest in such Contract(s) and within a reasonable period of time, return the original such Contract(s) and original Security Documents in its possession, if any, being released. Any distribution of interest or principal, or loss of the Collateral or any of the Property secured thereby, shall not release any Borrower from any of the Obligations.

     4.7 Assigned Contracts. Borrowers shall perform all of its obligations under each of the Assigned Contracts, and shall enforce all of its rights and remedies thereunder, in each case, as it deems appropriate in its business judgment; provided that Borrowers shall not take any action or fail to take any action with respect to its Assigned Contracts that would cause the termination of an Assigned Contract (unless such action or failure to take such action was in the exercise of Borrowers’ business judgment). Upon and during the continuance of an Event of Default, Borrowers shall remit directly to the Agent for application to the Obligations in such order as the Agent shall determine, all amounts received by Borrowers pursuant to its Assigned Contracts. Upon and during the continuance of an Event of Default, if any Borrowers shall fail to pursue diligently any right under an Assigned Contracts, the Agent may directly enforce such right in the Lenders’ or a Borrower’s name and may enter into such settlements or other agreements with respect thereto as the Agent shall determine. Upon and during the continuance of an Event of Default, the Agent, in its own name or in the name of Borrower(s), may bring suit, proceeding, or action under any Assigned Contract for any sum owing thereunder or to enforce any provision thereof. All obligations of Borrowers under any Assigned Contract shall be and remain enforceable only against Borrowers and shall not be enforceable against the Agent or Lenders. Notwithstanding any provision hereof to the contrary, Borrowers shall at all times remain liable to observe and perform all of its duties and obligations under its Assigned

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Contracts, and the Agent’s or Lenders’ exercise of any of their respective rights with respect to the Collateral shall not release a Borrower from any of such duties and obligations. Lenders shall not be obligated to perform or fulfill a Borrower’s duties or obligations under its Assigned Contracts or to make any payment thereunder, or to make any inquiry as to the nature or sufficiency of any payment or property received by it thereunder or the sufficiency of performance by any party thereunder, or to present or file any claim, or to take any action to collect or enforce any performance, any payment of any amounts, or any delivery of any property.

SECTION FIVE — RECORDS AND SERVICING OF CONTRACTS

     5.1 Records of Contracts. Each Borrower shall keep or will cause to be kept in a safe place, at its chief executive office and other locations set forth on Schedule 4.4 or otherwise agreed to by Agent, proper and accurate books and records pertaining to the Contracts and the other Collateral.

     5.2 Servicing of Contracts. At no expense to Agent or any Lender, each Borrower shall diligently and faithfully perform the following services relating to the Contracts and the other Collateral:

          (a) Borrowers shall collect all payments and other proceeds of the Contracts and other Collateral and, while any portion of the Loan is unpaid, Borrowers shall, after the establishment of the Collection Account referred to in this Paragraph 5.2(a), within three (3) Business Days after receipt thereof, deposit all cash proceeds of the Collateral (including, for example, all regular monthly payments received in connection with the Contracts) into a collection account (“Collection Account”) established by Borrowers and Agent under a certain Deposit Account Control Agreement between Borrowers, Agent, and the bank identified therein (the “Collection Account Agreement”) to be entered into pursuant to Paragraph 8.16. Upon the occurrence of an Event of Default under this Agreement, then upon written notice from Agent to the Borrowers, and at all times thereafter any Borrower’s right to withdraw any funds from the Collection Account shall immediately terminate and only Agent shall thereafter have a right to withdraw any funds from the Collection Account. Agent shall reinstate such Borrower’s right to withdraw funds from the Collection Account if no Event of Default is in effect for a 90 day period. Borrowers shall provide Agent monthly or more frequently as requested by Agent with written notification of any Contract under which any scheduled payment thereunder is 30 days or more past due.

          (b) Borrowers shall perform customary insurance follow-up with respect to each policy of insurance covering the Property which is subject to Contracts and Security Documents included in the Collateral.

          (c) Except as permitted under subparagraph 4.2(b), above, Borrowers shall not waive or vary the terms of any Contract in a way that would be adverse to Agent’s interest, and shall not forbear or grant any material indulgence to any Contract Debtor, without the prior written consent of Agent, which consent shall not be unreasonably withheld, conditioned or delayed.

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          (d) Upon the occurrence of an Event of Default, then upon written notice from Agent, all rights of Borrowers to collect any payments due under the Contracts and the Collateral and all rights of Borrowers to exercise the consensual rights which it would otherwise be entitled to exercise pursuant to subparagraph 5.2(a), above, shall immediately terminate. Borrowers, at Agent’s request, shall direct all Contract Debtors to make all payments due under the Contracts and the Collateral directly to Agent or to a bank account designated by Agent, and Borrowers shall otherwise cooperate with Agent in that regard. All payments received by Borrowers contrary to this subparagraph 5.2(d) shall be received in trust for the exclusive right of Agent, shall be segregated from other funds of Borrowers, and shall forthwith be delivered to Agent. Agent shall reinstate Borrowers’ rights to collect payments and to exercise its consensual rights if no Event of Default is in effect for a 90-day period.

          (e) Monthly Reports and Additional Reports Re Collateral. Borrowers agree to deliver to Agent, (i) within 15 days after the end of each calendar month during the term of this Agreement, a Collateral and Loan Status Report (the “Borrowing Base Certificate”) and Monthly Report of Delinquent Accounts in forms provided by Agent (or in such other form approved by Agent), containing the information requested therein, and (ii) any other reports regarding the Collateral as Agent may reasonably request at any time and from time to time.

          (f) Verification. Agent may, from time to time, verify directly with Contract Debtors the validity, amount, and any other matters relating to the Contracts and the other Collateral by means of mail, telephone, or otherwise, either in the name of Borrowers or Agent or such other name as Agent may choose.

SECTION SIX — CONDITIONS PRECEDENT TO ADVANCES

     6.1 Conditions Precedent to Initial Loans. The following are conditions precedent to each Lender’s obligation to make any initial Advance required under this Agreement or to Agent’s obligations to cause a Letter of Credit to be issued under this Agreement on the Closing Date:

          (a) Opinions of Counsel. In connection with the effectiveness of this Agreement, Agent and Lenders shall have received such opinions of counsel as Agent or any Lender shall reasonably request, all in scope and substance reasonably satisfactory to Agent and Lenders.

          (b) Warranties and Representations True as of Closing Date. The warranties and representations contained in this Agreement shall be true and correct in all material respects on the Closing Date with the same effect as though made on and as of that date.

          (c) Compliance with this Agreement. Borrowers shall have performed and complied with all covenants, agreements and conditions contained herein which are required to be performed or complied with by Borrowers before or on the Closing Date.

          (d) First Lien on Collateral. Agent shall have a perfected first and only Lien (except for Permitted Liens), in all of the Contracts and other Collateral and in the documents underlying or securing each of the Contracts.

          (e) Guaranties. The Guaranties shall have been executed and delivered by each Guarantor and shall be in full force and effect.

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          (f) Uniform Commercial Code Financing Statements and Assignments of Contracts. All filings of Code financing statements, assignments of the Contracts and all other filings, recordings and action necessary to perfect Agent’s Liens granted under this Agreement shall have been filed or recorded and confirmation thereof shall have been received by Agent.

          (g) Proceedings Satisfactory. All proceedings taken in connection with the execution of this Agreement shall be satisfactory to Agent and Lenders and their respective counsel.

          (h) Payment of Expenses, Charges, Etc. Agent shall have the right to pay out of the proceeds of any Advance to be made by Lenders hereunder all sums which are due from Borrowers to Agent or any Lender pursuant to the terms of this Agreement and for which the Borrowers have received an invoice at least one (1) Business Day prior to the Closing Date.

          (i) Fee Letters. Agent shall have received all fees due under the Fee Letters.

     6.2 Conditions to all Advances and Letters of Credit. Agent, Letter of Credit Issuer and Lenders shall not be required to fund any Loans, arrange for issuance of any Letters of Credit or grant any other accommodation to or for the benefit of Borrowers, unless the following conditions are satisfied:

          (a) No Default or Event of Default shall exist at the time of, or result from, such funding, issuance or grant;

          (b) The representations and warranties of each Borrower and Guarantor in the Loan Documents shall be true and correct in all material respects (or in all respects for such representations and warranties that provide for a materiality qualifier therein) on the date of, and upon giving effect to, such funding, issuance or grant (except for representations and warranties that expressly relate to an earlier date);

          (c) All conditions precedent in any other Loan Document shall be satisfied or waived in accordance with the terms thereof;

          (d) No event shall have occurred or circumstance exist that has or could reasonably be expected to have a material adverse effect on the business or condition (financial or otherwise) of the Borrowers and their Subsidiaries taken as a whole; and

          (e) With respect to issuance of a Letter of Credit, the other conditions in Paragraph 2.18(b) shall have been satisfied.

Each request (or deemed request) by Borrowers for funding of a Loan, issuance of a Letter of Credit or grant of an accommodation shall constitute a representation by Borrowers that the foregoing conditions are satisfied on the date of such request and on the date of such funding, issuance or grant. As an additional condition to any funding, issuance or grant, Agent shall have received such other information, documents, instruments and agreements as it deems reasonably appropriate in connection therewith.

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SECTION SEVEN — REPRESENTATIONS, WARRANTIES AND COVENANTS

     7.1 Representations and Warranties Reaffirmed. Each Borrower represents and warrants by this Agreement, by submission of each assignment of Collateral, and with each Advance request, the following matters. Each warranty and representation shall be deemed to be automatically repeated with each Advance and shall be true and correct in all material respects on the date of submission of such assignment of Collateral or making of such Advance, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date, and such warranties and representations shall be conclusively presumed to have been relied upon by Agent and each Lender regardless of any information possessed or any investigation made by Agent or any Lender. The warranties and representations shall be cumulative and in addition to all other warranties, representations, and agreements which Borrower shall give or cause to be given to Agent or any Lender, either now or hereafter.

     7.2 Warranties and Representations Regarding Contracts. With respect to the Contracts included in the Collateral:

          (a) To the knowledge of Borrowers after due inquiry, each Contract is a bona fide, valid, and binding obligation of the Contract Debtor, enforceable in accordance with the terms of the Contract except to the extent enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability, and Borrower does not know of any fact which impairs or will impair the validity of any such Contract.

          (b) Each Contract and related Security Documents are free of any claim for credit, deduction, discount, allowance, defense (including the defense of usury), dispute, counterclaim or setoff except to the extent that such claims could not, individually or in the aggregate, reasonably be expected to materially adversely affect the business or condition (financial or otherwise) of Borrowers.

          (c) Each Contract is free of any prior assignment (except for assignments to a Borrower), superior security interest, lien, claim, or encumbrance in favor of any Person other than Agent except for Permitted Liens.

          (d) Each Contract correctly sets forth the loan terms between such Borrower and the Contract Debtor, including the interest rate applicable thereto.

          (e) To the knowledge of Borrowers, the Security Documents correctly set forth the legal description of any subject real property and reasonably describe the subject personal property collateral.

          (f) To the knowledge of Borrowers, the signatures of all Contract Debtors are genuine and each Contract Debtor had the legal capacity to enter into and execute such documents on the date thereof.

     7.3 Warranties and Representations Regarding Collateral Generally. With respect to all Collateral, including the Contracts:

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          (a) All state and federal laws have been complied with by the Borrowers in conjunction with the Collateral, the non-compliance with which would have a material adverse effect on the value, enforceability or collectability of the Collateral.

          (b) At the time of the assignment of any Collateral by any Borrower, such Borrower has good and valid title to, and full right and authority to pledge and collaterally assign, the same.

          (c) The provisions of this Agreement and the other Loan Documents create legal and valid Liens on all the Collateral in favor of the Agent and when all proper filings, recordings and other actions necessary to perfect such Liens have been made or taken such Liens will constitute perfected and continuing Liens on all the Collateral, having priority over all other Liens on the Collateral (except for Permitted Liens) securing all the Obligations, and enforceable against each Borrower and all third parties.

     7.4 Solvent Financial Condition. Immediately prior to each Advance, the present fair salable value of the respective assets of Borrowers and any Guarantors are greater than the amount required to pay their respective liabilities, and each is able to pay its debts as they mature.

     7.5 Organization and Authority. Each Borrower (i) is a corporation duly organized, validly existing and in good standing under the laws of the state in which it is incorporated; (ii) has all requisite corporate power to carry on its business as now conducted; and (iii) is duly qualified and is authorized to do business as a foreign corporation and is in good standing as an entity in each jurisdiction where such qualification is necessary.

     7.6 Financial Statements. Except as set forth on Schedule 7.6, the audited consolidated financial statements of Regional for the fiscal year ending December 31, 2010 and the unaudited consolidated financial statements of Regional for the fiscal quarter ending September 30, 2011, are true and correct and have been prepared in accordance with GAAP, consistently applied (except for changes in application in which Borrowers’ accountants concur) and present fairly in all material respects the financial position of Regional and its Subsidiaries as of such dates and the results of their operations for such periods. Since the date of the most recent financial statements delivered pursuant to this Agreement, there has been no material adverse change in the condition, financial or otherwise, of any Borrower and any Guarantor.

     7.7 Full Disclosure. The financial statements referred to in Paragraph 7.6 above, this Agreement, and any written statement furnished by Borrowers to Agent or any Lender (copies of which have been previously delivered), do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein or herein not misleading, in light of the circumstances under which it was made; provided, that with respect to any projections and pro forma financial information contained in the materials referenced above, the Borrowers represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time made in light of the circumstances when made, it being recognized by Agent and Lenders that such financial information as it relates to future events is not to be viewed as fact and that actual results during the period covered by such financial information may differ from the projected results as set forth therein by a material amount.

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     7.8 Pending Litigation. There are no proceedings pending, or to the knowledge of any Borrower threatened, against or affecting any Borrower or any Guarantor in any court or before any Governmental Authority or arbitration board or tribunal which involve the possibility of materially and adversely affecting the business or condition (financial or otherwise) of Borrower or any Guarantor to perform any of its Obligations. Neither any Borrower nor any Guarantor is in default with respect to any order of any court, Governmental Authority or arbitration board or tribunal.

     7.9 Titles to Properties. Each Borrower has good and marketable title to the property (including all of the Collateral) it purports to own, free from Liens except for Permitted Liens and as set forth on Schedule 7.9.

     7.10 Licenses. Except as set forth on Schedule 7.10, each Borrower has all licenses, permits, and franchises necessary for the conduct of its business which violation or failure to obtain would materially and adversely affect its business or condition (financial or otherwise).

     7.11 Transaction is Legal and Authorized; Restrictive Agreements. The execution and delivery of this Agreement and related documents by Borrowers, the grant of the liens to Agent in respect of the Collateral by Borrowers, and compliance by Borrowers with all of the provisions of this Agreement are valid, legal, binding and enforceable in accordance with their terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles relating to enforceability) and will not conflict with or result in any breach of any of the provisions of any bylaws, charter or instrument to which any Borrower is a party. None of the Borrowers are party to any agreement, and none are subject to any corporate restriction, which adversely affects their ability to execute, deliver, and perform the Loan Documents to which they are a party and repay the Obligations owing by it.

     7.12 Taxes. All tax returns required to be filed by any Borrowers and any Guarantor in any jurisdiction have been filed when due (after giving effect to any extensions permitted by applicable law and regulations), and all taxes, assessments, and other governmental charges upon Borrowers, or upon any of its properties, income or franchises, which are due and payable, have been paid when due, except to the extent the validity thereof is being contested in good faith by proper proceedings which stay the imposition of any penalty, fine or Lien resulting from non-payment thereof and with respect to which adequate reserves in accordance with GAAP have been set aside for the payment thereof. The provisions for reserves for taxes on the books of Borrower are adequate in all material respects for all unaudited Fiscal Years, and for its current fiscal period.

     7.13 Compliance with Law. Except as set forth on Schedule 7.13, each Borrower: (a) is not in violation of any laws, ordinances, or governmental rules or regulations to which it or its business is subject, the violation of which would materially and adversely affect the business or condition (financial or otherwise) of the Borrowers, and (b) has not used illegal, improper, fraudulent or deceptive marketing techniques or unfair business practices with respect to the Contracts which would materially and adversely affect the business or condition (financial or otherwise) of the Borrowers. Except as set forth on Schedule 7.13, each Borrower has fully complied with all applicable federal statutes and all rules and regulations promulgated thereunder and with all provisions of law of each state whose laws, rules, and regulations relate to the

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Contracts, except to the extent that such non-compliance would not materially and adversely affect the business or condition (financial or otherwise) of the Borrowers.

     7.14 Borrowers’ Office and Names. As of the Closing Date, each Borrower’s chief executive office is located at the address stated on page one of this Agreement, and each Borrower covenants and agrees that it will not, without prior written notification to Agent, relocate said chief executive office. As of the Closing Date, the exact legal name of each Borrower is as set forth on the signature page of this Agreement and no Borrower has, during the five years immediately prior to the date of this Agreement, been known by or used any other legal name.

     7.15 Credit Guidelines. Each Borrower represents and warrants that it shall not make any material changes in its credit guidelines (a copy of which has been previously furnished by Borrowers to Agent and Lenders) without Agent’s prior written consent which Agent may withhold in its reasonable discretion. Borrowers’ credit guidelines shall state in reasonable detail the credit criteria used by Borrowers in determining the creditworthiness of Contract Debtors with regard to the Contracts originated by Borrowers and/or originated by third parties, as appropriate.

     7.16 Subsidiaries. As of the Closing Date, Schedule 7.16 is a correct and complete list of the names and relationship to each Borrower of each and all of the Borrowers’ Subsidiaries and such Schedule sets forth each Borrower’s direct and indirect equity interest in each Subsidiary. As of the Closing Date, the outstanding shares of each such Subsidiary owned directly or indirectly by each Borrower are duly authorized, validly issued, fully paid and nonassessable.

     7.17 No Default. Neither the Borrowers nor any of their Subsidiaries are in default with respect to any note, loan agreement, mortgage, lease, or other material agreement to which such Borrower or any such Subsidiary is a party or by which it is bound, which default would have a material adverse effect on the business or condition (financial or otherwise) of the Borrowers and their Subsidiaries taken as a whole.

     7.18 Use of Proceeds. None of the transactions contemplated in this Agreement (including the use of the proceeds of the Loans) will violate or result in the violation of Section 7 of the Securities Exchange Act of 1934, as amended, or any regulations issued pursuant thereto, including, without limitation, Regulations T, U and X of the Federal Reserve Board. No Borrower owns or intends to carry or purchase any “margin stock” within the meaning of said Regulation U. None of the proceeds of the loans will be used, directly or indirectly, by any Borrower or any of its Subsidiaries to purchase or carry any ‘security” within the meaning of the Securities Exchange Act of 1934, as amended.

     7.19 Bank Accounts. Schedule 7.19 sets forth, as of the Closing Date, a complete and accurate list of (i) the name of each Person with which each Borrower or any of its Subsidiaries has a deposit account, cash management account, safekeeping or custodial account, lock box, vault and deposit box; and (ii) the purpose of each such account, box or vault. Other than as set forth in Schedule 7.19, as of the Closing Date, neither the Borrowers nor any of their Subsidiaries maintain any account or other arrangement with any Person pursuant to which funds or securities of, or monies, checks, instruments, remittances, proceeds or other payments to such

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Borrower or such Subsidiary may be received or accepted by such Person for or on behalf of such Borrower or such Subsidiary.

     7.20 Proper Contract Documentation. Upon the reasonable request of Agent, not less than ten days after the date on which any new Contracts are tendered to Agent for inclusion in the Collateral, Borrowers shall have:

          (i) delivered to Agent and Lenders such information concerning the Contracts and Contract Debtors thereunder as Agent may reasonably require;

          (ii) properly and effectively endorsed or collaterally assigned, as appropriate, to Agent, the Contracts and other Collateral and the documents underlying or securing each of such Contracts; and

          (iii) stamped on the Contracts, Security Documents, and all other Instruments constituting Collateral the following words:

“This document is subject to a security interest in favor of Bank of America, N.A., as Agent.”

     7.21 Credit File. With respect to each Contract, Borrowers shall maintain a credit file for each Contract Debtor, containing financial information reflecting the creditworthiness of each Contract Debtor.

     7.22 Assignments of Contracts and Security Documents. Upon the reasonable request of Agent, Borrowers shall execute and deliver to Agent formal written collateral assignments of all new Contracts and Security Documents securing same entered into during the immediately preceding calendar month, and all such other documents as may be reasonably requested by Agent in connection therewith.

     7.23 Pledging of Contracts. Borrowers shall not sell, assign, pledge, or in any manner encumber to any Person, other than Agent, a Contract, or other Collateral, except for Permitted Liens. In addition, Regional shall not sell, assign, pledge, or in any manner encumber to any Person, other than Agent, the stock of RMC Reinsurance.

     7.24 Accurate Records Regarding Collateral. Borrowers shall maintain accurate and complete files relating to the Contracts and other Collateral to the reasonable satisfaction of Agent.

     7.25 Reserved.

     7.26 ERISA. No Borrower or any of its Subsidiaries maintains or sponsors, or has past, present or future obligations of contribution to a Plan or a Pension Plan or is a participating employer in, or has past, present or future obligations of contribution to, a Multiemployer Plan. No Borrower or any of its Subsidiaries has an ERISA Affiliate.

     7.27 Labor Relations. No Borrower or Subsidiary is party to or bound by any collective bargaining agreement. There are no material grievances, disputes or controversies with any union or other organization of any Borrower’s or Subsidiary’s employees, or, to any Borrower’s knowledge, any asserted or threatened strikes, work stoppages or demands for

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collective bargaining which would reasonably be expected to result in a material adverse change in the financial condition of the Borrowers taken as a whole. No Borrower or Subsidiary is party to or bound by any management or consulting agreement, the breach or termination of which would reasonably be expected to result in a material adverse change in the financial condition of the Borrowers taken as a whole.

     7.28 Reincorporation of Regional. Regional, as reincorporated in Delaware, hereby confirms, reaffirms, ratifies all of its obligations under the Existing Loan Agreement, this Agreement and all related documents with respect thereto.

SECTION EIGHT — FINANCIAL AND OTHER COVENANTS

     Each Borrower covenants that so long as this Agreement or any Obligation (other than indemnification and other contingent obligations for which no amount is due and owing and for which no claim has been made) of any Borrower to Agent or any Lender exists:

     8.1 Payment of Taxes and Claims. Each Borrower shall pay, before they become delinquent, all taxes, assessments, and other governmental charges imposed upon it or its property or the Collateral and all claims or demands which, if unpaid, might result in the creation of a Lien upon its property or the Collateral except to the extent the validity thereof is being contested in good faith by proper proceedings which stay the imposition of any penalty, fine or Lien resulting from non-payment thereof and with respect to which adequate reserves in accordance with GAAP have been set aside for the payment thereof.

     8.2 Maintenance of Properties and Existence. Each Borrower shall:

          (a) maintain insurance with respect to its properties and business against such casualties and contingencies of such types and in such amounts as is customary with companies of similar size and in the same or similar business as Borrowers;

          (b) keep true books, records, and accounts of all its business transactions with complete entries made to permit the preparation of financial statements in accordance with GAAP;

          (c) keep in full force and effect its corporate existence, rights, and franchises, as the case may be except as otherwise permitted under this Agreement or the other Loan Documents or as would not reasonably be expected to have a material adverse effect on the business or condition (financial or otherwise) of such Borrower; and

          (d) not violate any laws, ordinances, or governmental rules or regulations to which it is subject which violation might materially and adversely affect the business or condition (financial or otherwise) of such Borrower so that all Contracts will be valid, binding and legally enforceable in accordance with their terms, subsequent to the assignment thereof to Agent.

     8.3 Guaranties. Each Borrower shall not become or be liable in respect of any guaranty except (a) by endorsement, in the ordinary course of business, of negotiable instruments for deposit or collection issued in the ordinary course of such Borrower’s business, (b) for guaranties in respect of Debt permitted by Paragraph 8.6, (c) for guaranties incurred in the

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ordinary course of business with respect to surety and appeal bonds, performance bonds and other similar obligations, (d) for guaranties with respect to leases, and (e) for guaranties set forth on Schedule 8.3.

     8.4 Borrowing Base Ratio. Borrowers shall not permit the ratio of (a) all Debt (other than Subordinated Debt), including Borrowers’ Obligations (excluding any Bank Product Obligations) to Agent and Lenders (numerator), to (b) Borrowing Base (denominator) (such ratio, the “Borrowing Base Ratio”), to exceed (i) 3.50:1, at any time prior to the consummation of the Approved IPO, and (ii) 3:00:1, upon and after the consummation of the Approved IPO. All amounts calculated under this Paragraph 8.4 shall be calculated on a consolidated basis for all corporations comprising Borrowers and RMC Reinsurance.

     8.5 Business Conducted. No Borrower shall engage, directly or indirectly, in any line of business other than the businesses of substantially the type in which such Borrower is engaged on the Closing Date and businesses reasonably related thereto.

     8.6 Debt. Except as previously and expressly consented to in writing by Agent, no Borrower shall, directly or indirectly, permit, incur or maintain any Debt, other than (a) the Obligations, (b) Debt set forth on Schedule 8.6, (c) Debt evidencing intercompany loans among Borrowers and Guarantors, (d) the Subordinated Debt, (e) reserved, (f) current accounts payable, accrued expenses and customer advance payment incurred in the ordinary course of business, (g) Debt secured by Permitted Liens; (h) Debt permitted under Paragraph 8.3, (i) unsecured Debt in addition to the foregoing in an aggregate amount not to exceed $1,500,000.00 at any one time outstanding, and (j) any Debt representing a Permitted Refinancing of the foregoing, or prior to the consummation of an IPO, with respect to the Replacement Subordinated Debt, a refinancing permitted by the Intercreditor Agreement (collectively, “Permitted Debt”). No Borrower shall (i) make any payments (A) in respect of any Subordinated Debt (other than the Replacement Subordinated Debt), except that Borrowers may make any regularly scheduled payments of principal and interest due under such Borrower’s Subordinated Debt so long as no Default or Event of Default then exists or would result therefrom and such payments are made in accordance with the terms and conditions of any subordination agreement among the holder or holders of such Subordinated Debt, Agent and/or Lenders or the subordination provisions set forth in such Subordinated Debt documents, and prior to the consummation of an IPO (B) in respect of any Replacement Subordinated Debt, except that Borrowers may make payments in accordance with the Intercreditor Agreement, (ii) amend, modify or rescind any provisions of any of Borrower’s (A) Subordinated Debt (other than the Replacement Subordinated Debt) in such a manner as to affect adversely Agent’s liens on the Collateral or the prior position of the Notes or accelerate the date upon which any installment of principal and interest of any such Subordinated Debt is due or make the covenants and obligations of the Borrowers contained in such Subordinated Debt documents materially more restrictive than those set forth in the Loan Documents as of the date of such amendment or modification, or prior to the consummation of an IPO (B) Replacement Subordinated Debt except as permitted by the Intercreditor Agreement, or (iii) permit the prepayment or redemption of all or any part of any Subordinated Debt (other than the Replacement Subordinated Debt), except with respect to Subordinated Debt in connection with a Permitted Refinancing as permitted by clause (j) above, and in connection with a prepayment or redemption of other Subordinated Debt from time to time so long as no Default or Event of Default then exists or would result therefrom and such payments are made in accordance with the terms and conditions of any subordination agreement among the holder or

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holders of such Subordinated Debt, Agent and/or Lenders or the subordination provisions set forth in such Subordinated Debt documents.

     8.7 Further Assurances. Each Borrower shall from time to time execute and deliver to Agent such other documents and shall take such other action as may be reasonably requested by Agent in order to implement or effectuate the provisions of, or more fully perfect the rights granted or intended to be granted by each Borrower to Agent and Lenders pursuant to the terms of, this Agreement, the Notes, or any other agreement executed and delivered to Agent or any Lender by such Borrower.

     8.8 Subsidiaries. Regional shall not, directly or indirectly, organize or acquire any other Subsidiaries without the prior written consent of Agent, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, such Subsidiary (other than a Subsidiary that is organized or formed under the laws of a jurisdiction other than the United States (or any state thereof) or the District of Columbia) executes and delivers a Guaranty substantially in the form attached hereto as Exhibit “D” in favor of Agent, for the benefit of the Lenders, within thirty (30) days of becoming a Subsidiary of Regional.

     8.9 Interest Coverage Ratio. The Borrowers shall maintain a ratio, calculated as of the last day of each fiscal quarter of the Borrowers, of not less than (a) the Adjusted Net Income for the Fiscal Year to date plus interest expense for the Fiscal Year to date (numerator) to (b) interest expense for the fiscal year to date (denominator) of: (i) prior to the consummation of the Approved IPO, 1.3 to 1.0, and (ii) upon and after the consummation of the Approved IPO, 1.5:1.0. As used herein, “interest expense” means the aggregate amount of interest paid by Borrowers on all indebtedness, including Borrowers’ Obligations (other than Bank Product Obligations) to Agent and Lenders, during the applicable fiscal period.

     8.10 Loss Reserve.

          (a) Borrowers shall maintain a loss reserve in an amount which shall not be less than five percent (5%) of the remainder of (i) the aggregate amount of all presently due and future, unpaid, noncancellable installment payments to be made under all of Borrowers’ then-owned Contracts, minus (ii) all unearned finance charges (if any) included therein.

          (b) Borrowers shall maintain an aggregate loss reserve (including the reserves created under subparagraph 8.10(a) and Borrowers’ non-file insurance reserves) in an amount which shall not be less than five and one-half percent (5.5%) of the remainder of (i) the aggregate amount of all presently due and future, unpaid, noncancellable installment payments to be made under all of Borrowers’ then-owned Contracts, minus (ii) the sum of all unearned finance charges (if any) included therein, unearned acquisition charges, and unearned maintenance fees.

          (c) Borrowers shall maintain an aggregate loss reserve in an amount which shall not be less than the sum of (x) the current Small Contracts Reserve Percent of the remainder of (i) the aggregate amount of all presently due and future, unpaid, noncancellable installment payments to be made under all of Borrowers’ then-owned Small Loan Contracts and live check Contracts, minus (ii) the sum of all unearned finance charges (if any) included therein, unearned acquisition charges, and unearned maintenance fees and (y) the Other Loss Reserve Percent of the remainder of (i) the aggregate amount of all presently due and future, unpaid,

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noncancellable installment payments to be made under all of Borrowers’ then-owned Contracts other than Small Loan Contracts and live check Contracts, minus (ii) the sum of all unearned finance charges (if any) included therein, unearned acquisition charges, and unearned maintenance fees.

          (d) Agent may require Borrowers to increase the amount of the loss reserve and aggregate loss reserves above the foregoing required minimums to an amount determined by Agent, in its reasonable discretion, to adequately reflect Borrowers’ anticipated losses.

          (e) All amounts calculated under this Paragraph shall be calculated on a consolidated basis for all corporations comprising Borrowers and RMC Reinsurance.

          (f) To the extent that the Agent determines that the loss reserves permitted under subsections (a)-(c) hereof are inadequate to cover Borrower’s losses with respect to the Contracts reserved against, the amount(s) of such shortfall(s) shall be deducted from (i) Borrowers’ Adjusted Tangible Net Worth for purposes of this Agreement and (ii) Borrowers’ Adjusted Net Income for purposes of calculating the Interest Coverage Ratio, to the extent such shortfall(s) was not previously deducted in the prior quarter’s Interest Coverage Ratio test.

     8.11 Charge-Off Policy. Borrowers shall establish and implement, in a manner reasonably satisfactory to Agent, a policy for charging off the unpaid balance of its delinquent Contracts. Without limiting the generality of the foregoing, Borrowers’ policy shall provide that on the last Business Day of each month each Borrower shall:

          (a) either (i) charge off the unpaid balance of all Contracts with respect to which any payment due thereunder is 180 or more days delinquent, as determined on a contractual basis or (ii) (x) deduct the unpaid balance of all such Contracts from Borrowers’ Adjusted Tangible Net Worth for purposes of this Agreement and (y) deduct the unpaid balance of all such Contracts from Borrowers’ Adjusted Net Income for purposes of calculating the Interest Coverage Ratio, to the extent such unpaid balance not previously deducted in the prior quarter’s Interest Coverage Ratio test; and

          (b) charge off the unpaid balance of all Contracts which were secured by a Lien on Property which has been repossessed for 120 days or more or (ii) (x) deduct the unpaid balance of all such Contracts from Borrowers’ Adjusted Tangible Net Worth for purposes of this Agreement and (y) deduct the unpaid balance of all such Contracts from Borrowers’ Adjusted Net Income for purposes of calculating the Interest Coverage Ratio, to the extent such unpaid balance not previously deducted in the prior quarter’s Interest Coverage Ratio test.

     8.12 Prohibition on Distributions; Equity Capital Changes. Borrowers shall not, without Agent’s prior written consent, directly or indirectly (a) declare, make, or incur any liability to make any Distribution, except for (i) Distributions by a Subsidiary of a Borrower to such Borrower or by a Borrower to another Borrower; and (ii) Distributions by Regional to Regional Holdings which are used by Regional Holdings to pay (A) federal, state and local income taxes and franchise taxes for Regional Holdings (to the extent such taxes relate to Regional Holdings’ interests in the Borrowers and their Subsidiaries) and on behalf of the Borrowers and their Subsidiaries, in an amount not to exceed such taxes for Regional Holdings (to the extent such taxes relate to Regional Holdings’ interests in the Borrowers and their Subsidiaries), the Borrowers and their Subsidiaries, (B) state fees, licensing expenses and other

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reasonable expenses necessary to maintain Regional Holdings’ existence and to conduct its business (to the extent such business relates to Regional Holdings’ interests in the Borrowers and their Subsidiaries), and (C) prior to the consummation of the Approved IPO, employees’, officers’ (if any) and managing members’ compensation, fees and expenses, including but not limited to policy premiums related to officers liability insurance, and payments under any employment agreement or non-competition agreement, not to exceed $500,000 in the aggregate in any Fiscal Year for all of the foregoing items in this clause (C), to the extent such fees, expenses and payments relate to the ordinary course of business of Regional Holdings with respect to the Borrowers and their Subsidiaries, (iii) upon and after the consummation of the Approved IPO, distributions used to pay employees’, officers’ (if any) and managing members’ compensation, fees and expenses, including but not limited to (1) policy premiums related to officers liability insurance, and (2) payments under any employment agreement or non-competition agreement not to exceed $1,000,000.00, or, in the aggregate in any Fiscal Year for all of the foregoing items in this clause (iii)(2), to the extent such fees, expenses and payments relate to the ordinary course of business of Regional, the other Borrowers and their Subsidiaries, (iv) upon the consummation of an IPO, any Distributions contemplated by, or made in connection with the transactions contemplated by, Section 8.18(b) shall be permitted, (v) issuance of stock options pursuant to the Management Incentive Plan, and, provided that no Event of Default exists or would result therefrom, purchases and repurchases of any stock issued pursuant to such Management Incentive Plan and (vi), upon and after the consummation of the Approved IPO only, Distributions from Regional to its shareholders (including, for the avoidance of doubt, the Pre-IPO Stock Holders); provided, however, that Distributions under clause (vi) shall not in the aggregate exceed 50% of Borrowers’ Net Income from operations of the Borrowers’ businesses; provided, further, however, that the consent of Majority Lenders is required to permit Borrowers to pay dividends to stockholders if (1) Hypothetical Availability is 20% or less of the sum of (i) the aggregate outstanding amount of all Revolving Loans and Pending Revolving Loans, plus (ii) the aggregate undrawn face amount of all outstanding Letters of Credit which the Agent has caused to be issued or obtained for the Borrowers’ accounts, (2) if as a result of such dividend payments, Hypothetical Availability would fall below 20% of the sum of (i) the aggregate outstanding amount of all Revolving Loans and Pending Revolving Loans, plus (ii) the aggregate undrawn face amount of all outstanding Letters of Credit which the Agent has caused to be issued or obtained for the Borrowers’ accounts or (3) if the proposed dividend is for an amount above 50% of Borrowers’ Net Income from the operations of their businesses or (b) make any change in its capital equity structure which would reasonably be expected to materially and adversely affect repayment of the Loan or other Obligations provided that, changes in the Borrowers’ capital equity structures as otherwise permitted by this Agreement or the Loan Documents shall be permitted.

     8.13 Limitation on Bulk Purchases. Without Agent’s prior approval, Borrowers shall not make any Bulk Purchase, (i) with an aggregate purchase price that exceeds $10,000,000.00, (ii) that would result in Bulk Purchases calculated on a rolling 12-month basis to exceed $20,000,000.00 in the aggregate, (iii) during any period of time when Hypothetical Availability is less than or equal 30% of the sum of (A) the aggregate outstanding amount of all Revolving Loans and Pending Revolving Loans, plus (B) the aggregate undrawn face amount of all outstanding Letters of Credit which the Agent has caused to be issued or obtained for the Borrowers’ accounts, or (iv) that, on a pro forma basis, would result in Hypothetical Availability being less than or equal to 30% of the sum of (A) the aggregate outstanding amount of all Revolving Loans and Pending Revolving Loans, plus (B) the aggregate undrawn face amount of all outstanding Letters of Credit which the Agent has caused to be issued or obtained

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for the Borrowers’ accounts. Contracts purchased as a result of a Bulk Purchase to be considered ineligible until Agent determines that such Contracts or portion thereof are Eligible Contracts.

     8.14 Transactions with Affiliates. Except as permitted by this Agreement, the Loan Documents, no Borrower shall sell, transfer, distribute, or pay any money or property to any Affiliate of such Borrower, or lend or advance money or property to any Affiliate of such Borrower, or invest in (by capital contribution or otherwise), or purchase or repurchase any stock or indebtedness, or any property, of any Affiliate of such Borrower or become liable on any guaranty of the indebtedness, dividends, or other obligation of any Affiliate of such Borrower. Notwithstanding the foregoing, (a) Borrowers (or any Subsidiary of any Borrower) may make loans and advances to, and sell, transfer, distribute and pay any money and property to, and invest in, and become liable on any guaranty of any Permitted Debt of, Borrowers, (b) Borrowers may make loans to RMC Reinsurance provided the unpaid principal balance of such loans do not, in the aggregate, exceed at any one time $500,000.00, (c) prior to the consummation of an IPO, but in no event following the consummation of an IPO, Regional may pay to (i) Richard A. Godley, Sr., Jerry L. Shirley and Brenda F. Kinlaw the payments contemplated under the Consulting Agreements, provided, however, that the Consulting Agreements shall not be amended to the extent that such amendments would be adverse to the interests of the Agent or the Lenders, including but not limited to any increase in the payments to be paid thereunder, unless the Agent provides its written consent to such amendment which consent shall not be unreasonably withheld, delayed or conditioned, and (ii) Parallel, Palladium Capital and their respective Related Funds’ fees for advisory and management services, and all costs and expenses related thereto pursuant to the Management Agreement, provided, however, that the Management Agreement shall not be amended to the extent that such amendment would be adverse to the interests of the Agent or the Lenders, including but not limited to any increase in the fees to be paid thereunder, unless the Agent provides its written consent to such amendment, which consent shall not be unreasonably withheld, delayed or conditioned, (d) Distributions permitted by Section 8.12 shall be permitted in accordance with the terms thereof, (e) the transactions contemplated by Sections 8.18 and 8.19 shall be permitted in accordance with the terms thereof, (f) Regional may issue stock options pursuant to the Management Incentive Plan, and, provided that no Event of Default exists or would result therefrom, may purchase and repurchase any stock issued pursuant to such Management Incentive Plan, (g) Regional may pay to the Replacement Subordinated Debt Agent all costs and expenses necessary to satisfy any reimbursement obligations (including any amendment fee) pursuant to the Replacement Subordinated Debt Documents; provided, however, that such costs and expenses shall not exceed $25,000.00, and (h) transactions by and among Borrowers necessary to consummate the 1^st Community Acquisition. Regional may sell its division, Regional Check Advance, and its subsidiary, Upstate Motor Company, provided that Agent receives the net cash sale proceeds of any such sale to be applied to the Revolving Loans (without any reduction in the Total Credit Facility). For any transaction with or among Affiliates permitted by this Agreement, Borrowers shall deliver to Agent at least seven (7) Business Days’ prior to the consummation of such transaction; (i) written notice describing the transaction, including, without limitation, information that would be reasonably required for Agent to determine whether additional documentation is required to maintain perfected security interests in the Collateral; and (ii) a reaffirmation by all Borrowers of the representations, warranties, covenants and other agreements contained in the Agreement. For the avoidance of doubt, the payment of customary directors fees or employee compensation arrangements shall not be subject to this Section 8.14.

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     8.15 Accounting Changes. No Borrower shall (i) make any significant change in accounting treatment or reporting practices, except as permitted or required by GAAP, or (ii) change its Fiscal Year.

     8.16 Bank Accounts and Collection Account. No Borrower shall (i) establish any deposit account, cash management account, safekeeping or custodial account or similar account or any lock box or vault or other arrangement with any Person, without the prior written consent of the Agent, which consent shall not be unreasonably withheld, conditioned or delayed, (ii) receive or accept any monies, checks, instruments, remittances, proceeds or other payments, including proceeds of Contracts, in any account other than the Collection Account, an account listed in Schedule 7.19 or a new account opened in accordance with this Paragraph 8.16 or (iii) commingle proceeds of Collateral with funds from any other source. Notwithstanding the foregoing, Borrowers hereby agree to use their commercially reasonable efforts to close any and all of their existing depository accounts maintained at financial institutions other than Bank of America other than existing depository accounts maintained at financial institutions in close proximity to a Borrower’s branch location where Bank of America does not have a bank location within two (2) miles from such Borrower’s branch location. Borrowers agree (i) to enter into a Collection Account Agreement, in form and substance reasonably satisfactory to Agent, Bank of America and Borrowers, within ninety (90) days from the Closing Date and (ii) to maintain the Collection Account at all times at Bank of America.

     8.17 Plans. No Borrower or Borrower Affiliate shall become a party to any Multiemployer Plan or Foreign Plan.

     8.18 IPO; Related Transactions. (a) Borrowers intend to consummate an initial public offering of securities (the “IPO”) after the date of this Agreement. In connection therewith, Regional reincorporated as a corporation under the laws in the State of Delaware and Lenders consent to such reincorporation. The Agent and the Lenders hereby consent to an IPO: (i) pursuant to which Regional receives net cash proceeds from IPO of at least $35,000,000.00 (the evidence of which is reasonably satisfactory to Agent), and which net proceeds of which are also reflected as an increase of $35,000,000.00 in Adjusted Tangible Net Worth, (ii) where the proceeds of such IPO are promptly distributed pursuant to Section 8.18(b), (iii) Borrowers pay solely out of the proceeds of such IPO, certain expenses incurred in connection with the consummation of such IPO (including without limitation, legal and other third party fees and expenses), and (iv) as a result of the consummation of such IPO, no Default or Event of Default shall occur under the Loan Documents. An IPO that complies with conditions (i)-(iv) hereof shall be referred to as an “Approved IPO”.

          (b) Use of IPO Proceeds. Out of the net cash proceeds from an IPO, Borrowers (i) shall satisfy their outstanding obligations under the Replacement Subordinated Debt Documents, (ii) shall make a one-time payment of an aggregate of $1,150,000.00 to certain Pre-IPO Stock Holders in connection with the termination of their respective Consulting Agreement, (iii) shall pay certain expenses incurred in connection with the consummation of an IPO, including legal and third party fees, subject to Agent’s approval, and (iv) shall use the entire, remaining balance of the net proceeds to pay down the existing indebtedness of the Loan Agreement.

     8.19 Mergers, Consolidations or Acquisitions. Borrower shall not, and shall not permit any of its Subsidiaries to, (i) consummate any transaction of merger, reorganization, or

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consolidation without Agent’s written approval, or (ii) transfer, sell, assign, lease, or otherwise dispose of all or substantially all of its Property, or (iii) wind up, liquidate or dissolve, or agree to do any of the foregoing, except for a merger of a wholly-owned Subsidiary with and into such Borrower, provided such Borrower is the surviving corporation thereof. Any proposed acquisition by a Borrower of a business, or substantially all the assets of a business, requires Agent’s approval. Notwithstanding the foregoing, (i) Borrowers may, with the consent of the Agent, effect the dissolution of Upstate Motor Company or any other immaterial Subsidiary and (ii) Borrowers may consummate the 1^st Community Acquisition pursuant to the terms of the 1^st Community Asset Purchase Agreement.

     8.20 Use of Loan Proceeds. Borrowers shall use the proceeds of the Loans advanced hereunder on or after the Closing Date, first, to pay all fees and other expenses of the Agent and/or any Lender in connection with the closing of this Agreement, and in accordance with the terms hereof and the terms of the Fee Letters, second, to consummate the 1^st Community Acquisition contemplated by the 1^st Community Asset Purchase Agreement, and, third, for working capital and general corporate purposes.

SECTION NINE — INFORMATION AS TO BORROWER

     9.1 Financial Statements. Borrowers shall submit to each Lender:

          (a) Monthly and Annual Statements. As soon as practicable: (1) after the end of each month of each fiscal year of Regional, and in any event within 45 days after the end of such period, and (2) after the end of each fiscal year of Regional, and in any event within 120 days thereafter, copies of:

               (i) consolidated balance sheets of Regional and its Subsidiaries as at the end of such monthly period and such year;

               (ii) consolidated statements of income of Regional and its Subsidiaries for such month and year;

               (iii) consolidated statements of cash flows of Regional and its Subsidiaries during such year;

               (iv) consolidated statements of changes in stockholders equity of Regional and its Subsidiaries during such year;

               (v) statements of material changes of accounting policies, presentations, or principles made during such year for Regional and its Subsidiaries; and

               (vi) notes to such annual and quarterly financial statements.

     Monthly statements and annual statements shall all be in reasonable detail, fairly presenting the financial position and the results of operations, and certified as complete and correct in all material respects, subject to change as resulting from year-end adjustments, by the treasurer or chief financial officer of Regional Holdings, Regional or the applicable Subsidiary, as appropriate. Monthly financial statements shall be prepared on a consolidated basis for all Borrowers and Guarantors. Annual statements of Regional and its Subsidiaries (or if the financial statements of Regional and its Subsidiaries are required under GAAP to be

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consolidated with the financial statements of Regional Holdings, then annual statements of Regional Holdings and its Subsidiaries) shall be audited and prepared in accordance with GAAP and shall be accompanied by a report thereon unqualified as to scope by an independent nationally recognized certified accounting firm selected by Regional Holdings or Regional and reasonably satisfactory to Agent. In addition, at the request of Agent, the annual statements shall be prepared on a consolidated basis, and on a consolidating basis for each of the Borrowers and Guarantors.

          (b) Audit Reports. Promptly upon receipt thereof, one copy of each audit report, if any, submitted to any and all Borrowers by independent public accountants in connection with any annual, interim, or special audit or examination made by them of the books of such Borrower.

          (c) Notice of Default or Event of Default. Within three (3) Business Days of becoming aware of the existence of any condition or event which constitutes a Default or an Event of Default, a written notice specifying the nature of the claimed Default, Event of Default or other default and what action Borrower is taking or proposes to take with respect thereto.

          (d) Requested Information. With reasonable promptness, such other information as, from time to time, may be reasonably requested by Agent or any Lender.

     9.2 Inspection. Borrowers shall permit Agent and its representatives to make such verifications and inspections of the Collateral and to make audits and inspections, at any time during normal business hours of such Borrower and as frequently as Agent reasonably desires upon reasonable advance notice to such Borrower, of Borrowers’ books, accounts, records, correspondence and such other papers as it may desire and of Borrowers’ premises and the Collateral. To reimburse Agent for the costs of such verifications, inspections and audits, Borrowers shall pay to Agent, for its own account and not for the account of the Lenders, all costs of appraisals, inspections, and verifications of the Collateral, including travel, lodging, and meals for inspections of the Collateral and Borrowers’ operations by Agent plus Agent’s then customary charge for field examinations and audits and the preparation of reports thereof (such charge is currently $850 per day (or portion thereof) for each Person retained or employed by Agent with respect to each field examination or audit), provided, however, that in the absence of a Default or Event of Default, the Borrowers shall not be obligated to pay more than $75,000.00 in per diem charges in any one calendar year; such costs and charges shall be payable by Borrowers on demand by Agent. Borrowers shall supply Agent with copies and shall permit Agent to copy such records and papers as Agent shall request, and shall permit Agent to discuss Borrowers’ affairs, finances, and accounts with Borrowers’ employees, officers, and independent public accountants (and by this provision each Borrower hereby authorizes said accountants to discuss with Agent the finances and affairs of such Borrower) all at such reasonable times and as often as may be reasonably requested. Borrowers further agree to supply Agent with such other reasonable information relating to the Collateral and to Borrowers as Agent shall request. In the event of litigation between any Borrower and Agent, Agent’s right of civil discovery shall be in addition to, and not in lieu of its rights under this Paragraph 9.2. Each Lender shall have the right, at its own expense, to accompany the Agent on any such audit or inspection.

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SECTION TEN — EVENTS OF DEFAULT; REMEDIES

     10.1 Events of Default. An “Event of Default” shall exist under this Agreement upon the occurrence of any of the following events or conditions:

          (a) Interest or Principal. Failure to pay (i) when due or when declared due and payable, all or any portion of the principal of Obligations (but with respect to Bank Product Obligations, including any grace or cure period granted under the documents and agreements evidencing such Bank Product, if any) owing to Agent or any Lender or (ii) within three (3) Business Days after the same shall be due, all or any portion of interest on the Obligations, taxes, reimbursement of Agent’s Expenses or other sums payable pursuant to the terms of this Agreement.

          (b) Warranties or Representations. Any warranty, representation, or other statement made or furnished to Agent or any Lender by any Borrower or any Guarantor or any instrument furnished in compliance with this Agreement shall have been false or misleading in any material respect when made or furnished.

          (c) Financial Covenants. Failure by any Borrower or any Guarantor to comply with any financial covenants set forth in this Agreement relating to any Borrower or any Guarantor.

          (d) Other Covenants. Failure by any Borrower or any Guarantor to comply with any other covenants or agreements relating to any Borrower or any Guarantor as contained in this Agreement, any Guaranty, or any other agreement executed in connection herewith or therewith (excluding in respect of any Bank Products) for more than 30 days (to the extent such failure can be cured and such Borrower or Guarantor, as applicable, is actively pursuing such cure in good faith but otherwise immediately) after such failure shall first become known to any Borrower or to any Guarantor; or failure by any Borrower to comply with any covenant or agreement relating to such Borrower as contained in any agreement in respect of Bank Products beyond the applicable grace or cure period, if any, applicable thereto.

          (e) Insolvency. Dissolution, termination of existence, insolvency (failure to pay its debts as they mature or the failure to maintain the fair salable value of its assets in excess of its liabilities), business failure, appointment of a receiver, trustee, custodian or similar fiduciary, assignment for the benefit of creditors or the commencement of any proceedings under any bankruptcy laws or by or against any Borrower or any Guarantor (if against any Borrower or Guarantor, the continuation of such proceedings for more than 60 days) or the making by any Borrower or any Guarantor of any offer of settlement, extension or composition to its unsecured creditors generally.

          (f) Attachment, Judgment, Tax Liens. The issuance or filing against any Borrower or any Guarantor of any lien, attachment, injunction, execution, tax lien, or judgment for the payment of money in excess of $500,000.00 which is not vacated, satisfied or discharged in full or stayed within 30 days after issuance or filing.

          (g) Default in Other Agreements. Default in the payment of any sum due under any instrument of Debt for borrowed money in excess of $500,000.00 owed by any Borrower or any Guarantor to any Person or any other default under such instrument of

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indebtedness which permits such indebtedness to become due prior to its stated maturity or permits the holders of such indebtedness to elect a majority of the board of directors or manage the business of any Borrower or any Guarantor, including, but not limited to, any default under any Replacement Subordinated Debt Documents, if applicable; provided, however, no Event of Default shall result hereunder if such Borrower or Guarantor cures such other default (in accordance with the cure provisions of such other agreement) or if the Person to whom such Debt is owed waives such default.

          (h) Loss of License. The loss, revocation, or failure to renew any license, permit, and/or franchise now held or hereafter acquired by any Borrower, which is necessary for the continued operation of such Borrower’s business which does or could reasonably be expected to materially adversely affect the properties and condition (financial or otherwise) of such Borrower.

          (i) Liens. If any Borrower shall pledge, hypothecate or otherwise give a Lien on the Collateral, any Contract or the stock of RMC Reinsurance to, or if such Lien shall be obtained by, any Person other than Agent other than Permitted Liens.

          (j) Assignment of Agreement. The attempt by any Borrower to, or if any Borrower shall, assign this Agreement or its rights hereunder, except in accordance with Paragraph 13.4.

          (k) Breach of Collection Agreement. Failure by any Borrower to observe or a breach by any Borrower of any covenant contained in a the Collection Account Agreement between Borrower and Agent.

          (l) Change in Control. Any Change in Control shall occur.

          (m) Guaranty Termination. Default under, revocation of, or termination of any Guaranty.

          (n) Collateral Adjustment Percent. The Collateral Adjustment Percent shall at any time be equal to or exceed twenty percent (20%).

          (o) OFAC Violation. Any Borrower or Guarantor or any of its senior officers is criminally indicted or convicted for (i) a felony committed in the conduct of any Borrower’s or Guarantor’s business, or (ii) violating any state or federal law (including the Controlled Substances Act, Money Laundering Control Act of 1986 and Illegal Exportation of War Materials Act) that could lead to forfeiture of any material Property or any Collateral; or

          (p) ERISA Event. An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan that has resulted or could reasonably be expected to result in liability of a Borrower or Guarantor to a Pension Plan, Multiemployer Plan or PBGC, or that constitutes grounds for appointment of a trustee for or termination by the PBGC of any Pension Plan or Multiemployer Plan; any Borrower, Guarantor or ERISA Affiliate fails to pay when due any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan; or any event similar to the foregoing occurs or exists with respect to a Foreign Plan.

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     10.2 Default Remedies.

          (a) Acceleration of Obligations: Right to Dispose of Collateral. Upon the occurrence and during the continuance of an Event of Default as provided in Paragraph 10.1 above, all of the Obligations due from Borrowers to Agent and Lenders, at the option of Majority Lenders, and upon written notice thereof to Borrowers by Agent or any Lender, shall accelerate and become at once due and payable and the Commitments shall immediately terminate; Borrowers shall forthwith pay to Agent, in addition to any and all sums and charges due, the entire principal of and accrued interest on the Notes and all other Obligations; provided, however, that upon the occurrence of any Event of Default described in subparagraph 10.1(e), the Commitments shall automatically and immediately expire and all Obligations shall automatically become immediately due and payable without notice or demand of any kind. Agent thereupon shall have all the rights and remedies of a secured party under the Code and all other legal and equitable rights to which it may be entitled, and Agent may and shall, at the direction of the Majority Lenders, take such action as is required under Paragraph 12.5 hereof. If not previously delivered to Agent, Agent shall also have the right to require Borrowers to assemble the Collateral, at Borrowers’ expense, and make it available to Agent at a place designated by Agent, and Agent shall have the right to take immediate possession of the Collateral and may enter any of the premises of Borrowers or wherever the Collateral shall be located, with or without force or process of law, and to keep and store the same on said premises until sold and if said premises are the property of Borrowers, Borrowers agree not to charge Agent for storage thereof for a period of at least ninety (90) days after the sale or disposition of the Collateral. Borrowers waive the right to require the filing of any undertaking or bond to obtain any such process of law. Ten (10) days notice to Borrowers of any public or private sale or other disposition of Collateral shall be reasonable notice thereof and such sale shall be at such location(s) as Agent shall designate in said notice. The Agent may sell and deliver any Collateral at public or private sales, for cash, upon credit or otherwise, at such prices and upon such terms as the Majority Lenders deem advisable, in their sole discretion, and may, if the Agent deems it reasonable, postpone or adjourn any sale of the Collateral by an announcement at the time and place of sale or of such postponed or adjourned sale without giving a new notice of sale. Agent and each Lender shall have the right to bid at such sale on its own behalf. Out of proceeds arising from any such sale, Agent shall retain all costs and charges, including attorneys’ fees for pursuing, reclaiming, taking, keeping, storing, and advertising such Collateral for sale, selling and any and all other charges and expenses in connection therewith. Any balance shall be applied upon the Obligations of Borrowers to Agent and Lenders; and in the event of deficiency, Borrowers shall remain liable to Agent and Lenders. In the event of any surplus, such surplus shall be paid to the party entitled by law to same.

     Upon the occurrence of an Event of Default, Agent may, from time to time, attempt to sell all or any part of the Collateral by a private placement restricting the bidder and prospective purchasers. In so doing, Agent may solicit offers to buy the Collateral, or any part of it, for cash, from a limited number of purchasers deemed by Agent, in its reasonable judgment, to be responsible parties who might be interested in purchasing the Collateral, and if Agent solicits such offers from not less than three such purchasers then the acceptance by Agent of the highest offer obtained therefrom shall be deemed to be a commercially reasonable method of disposition of such Collateral.

          (b) Application of Collateral; Termination of Agreements. Upon the occurrence and during the continuance of an Event of Default, Agent may (and shall, at the

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direction of Majority Lenders) also, with or without proceeding with such sale or foreclosure or demanding payment of the Obligations, without notice, terminate further performance under this Agreement or any other agreement or agreements between Agent or any Lender and Borrowers without further liability or obligation by Agent or any Lender, and may also, at any time, appropriate and apply on any Obligations any and all Collateral in the possession of Agent or any Lender, and any and all balances, credits, deposits, accounts, reserves, indebtedness, or other monies due or owing to Borrowers or held by Agent or any Lender hereunder or under any such financing agreement or otherwise, whether accrued or not; and Agent and Lenders shall not, in any manner, be liable to Borrowers for any failure to make or continue to make any Loans or Advances under this Agreement. Neither such termination, nor the termination of this Agreement by lapse of time, the giving of notice, or otherwise shall absolve, release, or otherwise affect the liability of Borrowers in respect of transactions had prior to such termination, nor affect any of the liens, security interests, rights, powers and remedies of Agent or any Lender, but they shall, in all events, continue until all Obligations of Borrowers to Agent and Lenders are satisfied.

          (c) Remedies Cumulative. All undertakings of Borrowers contained in this Agreement, or in any documents referred to herein concurrently, or hereafter entered into, shall be deemed cumulative. The failure or delay of Agent or any Lender to exercise or enforce any rights or remedies under this Agreement or under any of the aforesaid agreements or Collateral shall not operate as a waiver of such rights and remedies, but all such rights and remedies shall continue in full force and effect until payment of all Loans and Advances and all other Obligations owing or to become owing from Borrowers to Agent and Lenders shall have been fully satisfied, and all rights and remedies herein provided for are cumulative and none are exclusive.

          (d) Collection Account Access. Upon the occurrence and during the continuance of an Event of Default (and subject to Paragraph 5.2(a) hereof), Agent may (and shall, at the direction of Majority Lenders) notify the bank identified in the Collection Account Agreement to terminate Borrowers’ right to withdraw any funds from the Collection Account identified in the Collection Account Agreement between Borrowers and Agent.

SECTION ELEVEN — AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS

     11.1 Amendments and Waivers. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent with respect to any departure by Borrowers therefrom, shall be effective unless the same shall be in writing and signed by Majority Lenders (or by Agent at the written request of Majority Lenders) and Borrowers, and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given;

provided, however, that no such waiver, amendment, or consent shall, unless in writing and signed by all the Lenders and Borrowers and acknowledged by Agent, do any of the following:

     (a) extend the Maturity Date of this Agreement;

     (b) increase the Commitment of any Lender such that the Total Credit Facility after such increase is greater than $255,000,000.00;

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     (c) increase the Commitment of any Lender without such Lender’s consent;

     (d) postpone or delay any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document (other than any election not to impose a default rate or to withdraw the imposition of such default rate);

     (e) reduce the principal of, or the rate of interest specified herein on any Loan, or any fees or other amounts payable hereunder or under any other Loan Document;

     (f) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Loans which is required for the Lenders or any of them to take any action hereunder;

     (g) increase any of the percentages set forth in the definition of Advance Rate;

     (h) amend this Paragraph 11.1 or any provision of this Agreement providing for consent or other action by all Lenders, Required Lenders or Majority Lenders;

     (i) release Collateral other than as permitted by Paragraph 12.10 or release any Guarantor (except to the extent otherwise permitted by Paragraph 13.21); or

     (j) change the definitions of “Availability”, “Majority Lenders” or “Required Lenders” or “Super-Majority Lenders”;

     (k) amend or waive any provision dealing with Borrowing Base Ratio, Debt to Worth Ratio or Interest Coverage Ratio; provided, however, that the Majority Lenders have a right to waive any such provision for a period of 120 days following the date of such waiver, after which waiver, the consent of all Lenders is required to waive any such provision; or

     (l) approve a Change in Control.

Notwithstanding the foregoing, Agent may, in its sole discretion and notwithstanding the limitations contained in clauses (b) and (g) above and any other terms of this Agreement, make Agent Advances in accordance with the provisions of Paragraph 2.2(i) in an amount not to exceed five percent (5%) of the Availability.

It is understood and agreed that no amendment, waiver or consent shall, unless in writing and signed by Agent, affect the rights or duties of Agent under this Agreement or any other Loan Document.

     11.2 Assignments; Participations.

          (a) Any Lender may, with the written consent of Agent (which consent shall not be unreasonably withheld) and written consent of Borrowers so long as no Event of Default has occurred and is continuing, assign and delegate to one or more Eligible Assignees (provided that no consent of Agent or any Borrower shall be required in connection with any assignment

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and delegation by a Lender to an Affiliate of such Lender and no consent of any Borrower shall be required in connection with any assignment and delegation by a Lender to another Lender) (each an “Assignee”) all, or any ratable part of all, of the Loans, the Commitments and the other rights and obligations of such Lender hereunder, in a minimum amount of $5,000,000.00 (provided that, unless an assignor Lender has assigned and delegated all of its Loans and Commitments, no such assignment and/or delegation shall be permitted unless, after giving effect thereto, such assignor Lender retains a Commitment in a minimum amount of $5,000,000.00); provided, however, that Borrowers and Agent may continue to deal solely and directly with such Lender in connection with the interest so assigned to an Assignee until (i) written notice of such assignment, together with payment instructions, addresses and related information with respect to the Assignee, shall have been given to Borrowers and Agent by such Lender and the Assignee; (ii) such Lender and its Assignee shall have delivered to Borrowers and Agent an Assignment and Acceptance in the form of Exhibit “C” (“Assignment and Acceptance”), together with any Note or Notes subject to such assignment; and (iii) the assignor Lender or Assignee has paid to Agent a processing fee in the amount of $3,000.00.

          (b) From and after the date that Agent notifies the assignor Lender that it has received an executed Assignment and Acceptance and payment of the above-referenced processing fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations, including, but not limited to, the obligation to participate in Letters of Credit and related credit support have been assigned to it pursuant to such Assignment and Acceptance, shall have the rights and obligations of a Lender under the Loan Documents, and (ii) the assignor Lender shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement (and in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto).

          (c) By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document furnished pursuant hereto or the attachment, perfection, or priority of any Lien granted by Borrowers to Agent or any Lender in the Collateral; (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of Borrowers or the performance or observance by Borrowers of any of their obligations under this Agreement or any other Loan Document furnished pursuant hereto; (iii) such Assignee confirms that it has received a copy of this Agreement, together with such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such Assignee will, independently and without reliance upon Agent, such assigning Lender or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such Assignee appoints and authorizes Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to Agent by the terms hereof, together with such powers, including the discretionary rights and incidental power, as are reasonably incidental thereto; and (vi) such Assignee agrees that it will

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perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

          (d) The Agent, acting for this purpose as an agent of the Borrowers, shall maintain at one of its offices a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amount (and stated interest) of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrowers, the Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrowers and any Lender at any reasonable time and from time to time upon reasonable prior notice.

          (e) Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an Assignee, the Assignee’s completed administrative questionnaire (unless the Assignee shall already be a Lender hereunder), the processing fee referred to in paragraph (a) of this Section and any written consent to such assignment required by paragraph (a) of this Section, the Agent shall accept such Assignment and Acceptance and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

          (f) Immediately upon satisfaction of the requirements of subparagraph 11.2(a), this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the resulting adjustment of the Commitments arising therefrom. The Commitment allocated to each Assignee shall reduce such Commitments of the assigning Lender pro tanto.

          (g) Any Lender may at any time sell to one or more commercial banks, financial institutions, or other Persons (other than a natural person) not Affiliates of any Borrower (a “Participant”) participating interests in any Loans, the Commitment of that Lender and the other interests of that Lender (the “originating Lender”) hereunder and under the other Loan Documents; provided, however, that (i) the originating Lender’s obligations under this Agreement shall remain unchanged, (ii) the originating Lender shall remain solely responsible for the performance of such obligations, (iii) Borrowers and Agent shall continue to deal solely and directly with the originating Lender in connection with the originating Lender’s rights and obligations under this Agreement and the other Loan Documents, and (iv) no Lender shall transfer or grant any participating interest under which the Participant has rights to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Document (other than the rights described in Paragraph 11.1 as being rights that are voted on by all Lenders), and all amounts payable by Borrowers hereunder shall be determined as if such Lender had not sold such participation; except that, if amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of set-off in respect of its participating interest in amounts owing under this Agreement to the same extent and subject to the same limitation as if the amount of its participating interest were owing directly to it as a Lender under this Agreement.

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          (h) Notwithstanding any other provision in this Agreement, any Lender may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement in favor of any Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Board or U.S. Treasury Regulation 31 CFR §203.14, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under applicable law; provided, that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute such pledgee or assignee for such Lender as a party hereto.

SECTION TWELVE — THE AGENT

     12.1 Appointment and Authorization. Each Lender hereby designates and appoints Bank of America as its Agent under this Agreement and the other Loan Documents and each Lender hereby irrevocably authorizes Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Agent agrees to act as such on the express conditions contained in this Section Twelve. The provisions of this Section Twelve are solely for the benefit of Agent and Lenders, and Borrower shall have no rights as a third party beneficiary of any of the provisions contained herein. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document, Agent shall not have any duties or responsibilities to Lenders, except those expressly set forth herein, nor shall Agent have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against Agent. Without limiting the generality of the foregoing sentence, the use of the term “agent” in this Agreement with reference to Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties. Except as expressly otherwise provided in this Agreement, Agent shall have and may use its sole discretion with respect to exercising or refraining from exercising any discretionary rights or taking or refraining from taking any actions which Agent is expressly entitled to take or assert under this Agreement and the other Loan Documents, including (a) the determination of the applicability of ineligibility criteria with respect to the calculation of the Availability, (b) the making of Agent Advances pursuant to subparagraph 2.2(i), and (c) the exercise of remedies pursuant to Paragraph 10.2, and any action so taken or not taken shall be deemed consented to by Lenders.

     12.2 Delegation of Duties. Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects as long as such selection was made without gross negligence or willful misconduct.

     12.3 Liability of Agent. None of the Agent-Related Persons shall (i) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct), or (ii) be responsible in any manner to any of the Lenders for any recital, statement, representation or warranty made by Borrowers or any subsidiary or

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Affiliate of any Borrower, or any officer thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of Borrowers or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Borrower or any of Borrowers’ Subsidiaries or Affiliates.

     12.4 Reliance by Agent. Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to Borrowers), independent accountants and other experts selected by Agent. Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of Required Lenders or Majority Lenders, as applicable, as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by all Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of Required Lenders or Majority Lenders, as applicable, (or all Lenders if so required by Paragraph 11.1) and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders.

     12.5 Notice of Default. Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, unless Agent shall have received written notice from a Lender or Borrowers referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default.” Agent will notify Lenders of its receipt of any such notice. Upon the written request of any Lender, Agent shall send notice of such Default or Event of Default under this Agreement to the Borrowers within ten (10) Business Days, with a copy provided to each of the Lenders, unless such Default is cured within the applicable cure period or such Event of Default is waived. Otherwise, Agent shall take such action with respect to such Default or Event of Default as may be requested by Majority Lenders in accordance with Paragraph 10.2; provided, however, that unless and until Agent has received any such request, Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable. Agent and each of the Lenders agree to use reasonable good faith efforts to disclose to each other, as soon as practicable after discovery by a senior officer with direct responsibility for the management of the transactions with Borrowers, any information or communication (believed to be reliable and substantially accurate) which the disclosing Lender has reason to believe (a) is not known by Agent or the other Lenders (as applicable) and (b) may have a material and adverse effect upon the business or operations of the Borrowers and/or upon the collateral security for the Loan, and as a result, may impair the repayment of the Loan as and when due; provided, however, that neither the Agent nor the other Lenders shall have any liability as a result of its or their failure to disclose any information pursuant to this paragraph, nor shall any Lender assert any such failure by Agent or

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another Lender as a defense to any claim asserted against a Lender under the provisions of this Agreement.

     12.6 Indemnification. Whether or not the transactions contemplated hereby are consummated, Lenders shall indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by or on behalf of Borrowers and without limiting the obligation of Borrowers to do so), pro rata, from and against any and all Indemnified Liabilities as such term is defined in Paragraph 13.14; provided, however, that no Lender shall be liable for the payment to the Agent-Related Persons of any portion of such Indemnified Liabilities resulting solely from such Person’s gross negligence or willful misconduct. Without limitation of the foregoing, each Lender shall reimburse Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that Agent is not reimbursed for such expenses by or on behalf of Borrowers. The undertaking in this Paragraph 12.6 shall survive the payment of all Obligations hereunder and the resignation or replacement of Agent.

     12.7 Agent in Individual Capacity. Bank of America and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with any Borrower and its subsidiaries and Affiliates as though Bank of America were not Agent hereunder and without notice to or consent of Lenders. Lenders acknowledge that, pursuant to such activities, Bank of America or its Affiliates may receive information regarding any Borrower or its Affiliates (including information that may be subject to confidentiality obligations in favor of such Borrower or such Affiliate) and acknowledge that Agent and Bank of America shall be under no obligation to provide such information to them. With respect to its Loans, Bank of America shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not Agent, and the terms “Lender” and “Lenders” include Bank of America in its individual capacity.

     12.8 Successor Agent. Agent may resign as Agent upon 30 days notice to Lenders and Borrower, such resignation to be effective upon the acceptance of a successor agent to its appointment as Agent. In the event Bank of America sells all of its Commitment and Loans as part of a sale, transfer or other disposition by Bank of America of substantially all of its loan portfolio, Bank of America shall resign as Agent and such purchaser or transferee shall become the successor Agent hereunder. If Agent resigns under this Agreement, subject to the proviso in the preceding sentence, Majority Lenders shall appoint from among Lenders a successor agent for Lenders. If no successor agent is appointed prior to the effective date of the resignation of Agent, Agent may appoint, after consulting with Lenders and Borrowers, a successor agent from among Lenders. Upon the acceptance of its appointment as successor agent hereunder, such successor agent shall succeed to all the rights, powers and duties of the retiring Agent and the term “Agent” shall mean such successor agent and the retiring Agent’s appointment, powers and duties as Agent shall be terminated. After any retiring Agent’s resignation hereunder as Agent, the provisions of this Section Twelve shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.

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     12.9 Withholding Tax. At least five Business Days prior to the first date for payment of interest or fees hereunder to a Foreign Lender, the Foreign Lender shall deliver to Borrowers and Agent two duly completed copies of IRS Form W-8BEN or W-8ECI (or any subsequent replacement or substitute form therefor), certifying that such Lender can receive payment of Obligations without deduction or withholding of any United States federal income taxes. Each Foreign Lender shall deliver to Borrowers and Agent two additional copies of such form before the preceding form expires or becomes obsolete or after the occurrence of any event requiring a change in the form, as well as any amendments, extensions or renewals thereof as may be reasonably requested by Borrowers or Agent, in each case, certifying that the Foreign Lender can receive payment of Obligations without deduction or withholding of any such taxes, unless an event (including any change in treaty or law) has occurred that renders such forms inapplicable or prevents the Foreign Lender from certifying that it can receive payments without deduction or withholding of such taxes. During any period that a Foreign Lender does not or is unable to establish that it can receive payments without deduction or withholding of such taxes, other than by reason of an event (including any change in treaty or law) that occurs after it becomes a Lender, Agent may withhold taxes from payments to such Foreign Lender at the applicable statutory and treaty rates, and Borrowers shall not be required to pay any additional amounts under this Paragraph 12.9 or Paragraph 2.11 as a result of such withholding.

     12.10 Collateral Matters.

          (a) Lenders hereby irrevocably authorize Agent, at its option and in its sole discretion, to release any Agent’s Lien upon any Collateral (i) upon the termination of the Commitments and payment and satisfaction in full by Borrowers of all Loans and reimbursement obligations in respect of Letters of Credit and related credit support, and the termination or cash collateralization of all outstanding Letters of Credit (whether or not any of such obligations are due) and all other Obligations (other than in indemnification and other contingent obligations for which no amount is due and owing and with respect to which no claim has been made), all in accordance with the provisions of Paragraph 3.2; (ii) constituting property being sold or disposed of if Borrowers certify to Agent that the sale or disposition is made in compliance with this Agreement (and Agent may rely conclusively on any such certificate, without further inquiry); (iii) constituting property in which Borrowers owned no interest at the time the Lien was granted or at any time thereafter; or (iv) constituting property leased to Borrowers under a lease which has expired or been terminated in a transaction permitted under this Agreement. Except as provided above or in Section 13.21, Agent will not release any of the Agent’s Liens without the prior written authorization of Lenders. Upon request by Agent or Borrowers at any time, Lenders will confirm in writing Agent’s authority to release any Agent’s Liens upon particular types or items of Collateral pursuant to this Paragraph 12.10.

          (b) Upon receipt by Agent of any authorization required pursuant to subparagraph 12.10(a) from Lenders of Agent’s authority to release any Agent’s Liens upon particular types or items of Collateral, and upon at least five (5) Business Days prior written request by Borrowers, Agent shall (and is hereby irrevocably authorized by Lenders to) execute such documents as may be necessary to evidence the release of the Agent’s Liens upon such Collateral; provided, however, that (i) Agent shall not be required to execute any such document on terms which, in Agent’s opinion, would expose Agent to liability or create any obligation or entail any consequence other than the release of such Liens without recourse or warranty, and (ii) such release shall not in any manner discharge, affect or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of Borrowers in respect of) all

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interests retained by Borrowers, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral.

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

     12.11 Restrictions on Actions by Lenders; Sharing of Payments.

          (a) Each of the Lenders agrees that it shall not, without the express consent of all Lenders, and that it shall, to the extent it is lawfully entitled to do so, upon the request of all Lenders, set off against the Obligations, any amounts owing by such Lender to Borrowers or any accounts of Borrowers now or hereafter maintained with such Lender. Each of the Lenders further agrees that it shall not, unless specifically requested to do so by Agent, take or cause to be taken any action to enforce its rights under this Agreement or against Borrowers, including the commencement of any legal or equitable proceedings, to foreclose any lien on, or otherwise enforce any security interest in, any of the Collateral.

          (b) If at any time or times any Lender shall receive (i) by payment, foreclosure, setoff or otherwise, any proceeds of Collateral or any payments with respect to the Obligations of Borrowers to such Lender arising under, or relating to, this Agreement or the other Loan Documents, except for any such proceeds or payments received by such Lender from Agent pursuant to the terms of this Agreement, or (ii) payments from Agent in excess of such Lender’s ratable portion of all such distributions by Agent, such Lender shall promptly (1) turn the same over to Agent, in kind, and with such endorsements as may be required to negotiate the same to Agent, or in same day funds, as applicable, for the account of all of the Lenders and for application to the Obligations in accordance with the applicable provisions of this Agreement, or (2) purchase, without recourse or warranty, an undivided interest and participation in the Obligations owed to the other Lenders so that such excess payment received shall be applied ratably as among Lenders in accordance with their Pro Rata Shares; provided, however, that if all or part of such excess payment received by the purchasing party is thereafter recovered from it, those purchases of participations shall be rescinded in whole or in part, as applicable, and the applicable portion of the purchase price paid therefor shall be returned to such purchasing party, but without interest except to the extent that such purchasing party is required to pay interest in connection with the recovery of the excess payment.

     12.12 Agency for Perfection. Each Lender hereby appoints each other Lender as agent for the purpose of perfecting the Lenders’ security interest in assets which, in accordance with Article 9 of the Code, can be perfected only by possession. Should any Lender (other than Agent) obtain possession of any such Collateral, such Lender shall notify Agent thereof, and,

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promptly upon Agent’s request therefor shall deliver such Collateral to Agent or in accordance with Agent’s instructions.

     12.13 Payments by Agent to Lenders. All payments to be made by Agent to Lenders shall be made by bank wire transfer or internal transfer of immediately available funds to each Lender pursuant to wire transfer instructions delivered in writing to Agent on or prior to the effectiveness of this Agreement (or if such Lender is an Assignee, on the applicable Assignment and Acceptance), or pursuant to such other wire transfer instructions as each party may designate for itself by written notice to Agent. Concurrently with each such payment, Agent shall identify whether such payment (or any portion thereof) represents principal, premium or interest on the Revolving Loans or otherwise.

     12.14 Concerning the Collateral and the Related Loan Documents. Each Lender authorizes and directs Agent to enter into this Agreement and the other Loan Documents, for the ratable benefit and obligation of Agent and Lenders. Each Lender agrees that any action taken by Agent, Majority Lenders or Required Lenders, as applicable, in accordance with the terms of this Agreement or the other Loan Documents, and the exercise by Agent, Majority Lenders, or Required Lenders, as applicable, of their respective powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Lenders.

     12.15 Field Audit and Examination Reports; Disclaimer by Lenders. By signing this Agreement, each Lender:

          (a) is deemed to have requested that Agent furnish such Lender, promptly after it becomes available, a copy of each field audit or examination report (each a “Report” and collectively, “Reports”) prepared by Agent;

          (b) expressly agrees and acknowledges that neither Bank of America nor Agent (i) makes any representation or warranty as to the accuracy of any Report, or (ii) shall be liable for any information contained in any Report;

          (c) expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that Agent or Bank of America or other party performing any audit or examination will inspect only specific information regarding Borrowers and will rely significantly upon Borrowers’ books and records, as well as on representations of Borrowers’ personnel;

          (d) agrees to keep all Reports confidential and strictly for its internal use, and not to distribute except to its participants, or use any Report in any other manner; and

          (e) without limiting the generality of any other indemnification provision contained in this Agreement, agrees: (i) to hold Agent and any such other Lender preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to Borrower, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or loans of Borrower; and (ii) to pay and protect, and indemnify, defend and hold Agent and any such other Lender preparing a Report harmless from and against, the claims, actions,

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proceedings, damages, costs, expenses and other amounts (including Attorney Costs) incurred by Agent and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

     12.16 Relation Among Lenders. The Lenders are not partners or co-venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of Agent) authorized to act for, any other Lender.

SECTION THIRTEEN — GENERAL

     13.1 Expenses. Promptly following any Borrower’s receipt of any monthly or other statement from Agent, Borrowers shall pay all of the following expenses (“Agent’s Expenses”):

          (a) except as otherwise expressly provided herein, all reasonable expenses incurred by Agent in the administration of this Agreement and the Loan, including but not limited to mailing costs and accounting fees, and any reasonable costs or out-of-pocket expenses (including Attorney Costs) incurred by Agent in connection with the preparation, execution, delivery, administration, modification, or amendment (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of, rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein;

          (b) all taxes levied against or paid by Agent or any Lender (other than Excluded Taxes) and all filing and recording fees, costs and expenses which may be incurred by Agent in respect to the filing and/or recording of any document or instrument relating to the transactions described in this Agreement; and

          (c) all costs, outlays, reasonable attorney’s fees and expenses of any kind (including all allocated staff costs) incurred by Agent or any Lender in the enforcement of this Agreement or the defense of legal proceedings involving any claim made against Agent or any Lender arising out of this Agreement or the protection of the Collateral.

     13.2 Invalidated Payments. If after receipt of any payment which is applied to the payment of all or any part of the Obligations, Agent or any Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason, then the Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by Agent or such Lender, and Borrowers shall be liable to pay to Agent and Lenders, and hereby does indemnify Agent and Lenders and hold Agent and Lenders harmless for the amount of such payment or proceeds surrendered. The provisions of this Paragraph 13.2 shall be and remain effective notwithstanding any contrary action which may have been taken by Agent or any Lender in reliance upon such payment or application of proceeds, and any such contrary action so taken shall be without prejudice to Agent’s and Lenders’ rights under this Agreement and shall be deemed to have been conditioned upon such payment or application of proceeds having become final and irrevocable. The provisions of this Paragraph 13.2 shall survive the termination of this Agreement.

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     13.3 Application of Code to Agreement. This Agreement has been entered into pursuant to the provisions of the Code. Any additional remedies available to Agent and Lenders under the applicable provisions of the Code not specifically included herein shall be deemed a part of this Agreement, and Agent and Lenders shall have the benefit of any such additional remedies.

     13.4 Parties, Successors and Assigns. This Agreement shall be binding upon each party hereto and its respective successors and assigns, and inure to the benefit of the successors and assigns of Agent and each Lender; provided, however, that no interest herein may be assigned by Borrowers without prior written consent of Agent and each Lender. The rights and benefits of Agent and Lenders hereunder shall, if such Persons so agree, inure to any party acquiring any interest in the Obligations or any part thereof.

     13.5 Notices and Communications.

          (a) Notice Address. All notices, requests and other communications by or to a party hereto shall be in writing and shall be given to any Borrower, at Regional’s address shown on page one of this Agreement, and to any other Person at its address shown on page one of this Agreement or stated below its signature to this Agreement (or, in the case of a Person who becomes a Lender after the Closing Date, at the address shown on its Assignment and Acceptance), or at such other address as a party may hereafter specify by notice in accordance with this Paragraph 13.5. Each such notice, request or other communication shall be effective only (a) if given by facsimile transmission, when transmitted to the applicable facsimile number, if confirmation of receipt is received (except that, if not given during normal business hours for the recipient, such notice shall be deemed to have been given at the opening of business on the next business day for the recipient); (b) if given by certified or registered U.S. mail, upon receipt, with first-class postage pre-paid, addressed to the applicable address; or (c) if given by personal delivery, when duly delivered to the notice address with receipt acknowledged. Notwithstanding the foregoing, no notice to Agent pursuant to Paragraphs 2.2, 2.6, 2.18 or 3.1 shall be effective until actually received by the Agent. Any written notice, request or other communication that is not sent in conformity with the foregoing provisions shall nevertheless be effective on the date actually received by the noticed party. Any notice received by Regional shall be deemed received by all Borrowers.

          (b) Electronic Communications; Voice Mail. Electronic mail and internet websites may be used only for routine communications, such as financial statements, Borrowing Base Certificates and other information required by Paragraph 9.1 or Paragraph 5.2(e), administrative matters and distribution of Loan Documents for execution. Agent and Lenders make no assurances as to the privacy and security of electronic communications. Electronic and voice mail may not be used as effective notice under the Loan Documents.

          (c) Non-Conforming Communications. Agent and Lenders may rely upon any notices purportedly given by or on behalf of any Borrower even if such notices were not made in a manner specified herein, were incomplete or were not confirmed, or if the terms thereof, as understood by the recipient, varied from a later confirmation. EACH BORROWER SHALL INDEMNIFY AND HOLD HARMLESS EACH INDEMNIFIED PERSON FROM ANY LIABILITIES, LOSSES, COSTS AND EXPENSES ARISING FROM ANY TELEPHONIC COMMUNICATION PURPORTEDLY GIVEN BY OR ON BEHALF OF A BORROWER, EXCEPT TO THE EXTENT SUCH LIABILITIES, LOSSES, COSTS

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AND EXPENSES RESULT FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PERSON.

     13.6 Accounting Principles. All accounting computations required to be made for the purposes of this Agreement shall be done in accordance with GAAP as provided in Paragraph 8.15 or unless otherwise agreed to in writing by Agent, at the time in effect, to the extent applicable, except where such principles are inconsistent with the requirements of this Agreement.

     13.7 Total Agreement; References. This Agreement and all other agreements referred to herein or delivered in connection herewith shall constitute the entire agreement between the parties relating to the subject matter hereof, shall rescind all prior agreements and understandings between the parties hereto relating to the subject matter hereof (including, without limitation, the Existing Loan Agreement), and shall not be changed or terminated orally. Each of the Loan Documents and any and all other agreements, documents or instruments now or hereafter executed and delivered pursuant to the terms of the Existing Loan Agreement or pursuant to the terms hereof are hereby amended so that any reference therein to the Existing Loan Agreement shall mean a reference to this Agreement. Notwithstanding the foregoing, (i) the liens and security interests granted by Borrowers in favor of Agent pursuant to the Existing Loan Agreement and the other Loan Documents shall continue in full force and effect from and after the date hereof in favor of Agent, for the benefit of Agent and Lenders, as security for the Obligations, (ii) the Loans outstanding by Lenders under the Existing Loan Agreement (and all accrued and unpaid interest thereon and fees in respect thereof) and all other Obligations outstanding thereunder as of the date of this Agreement shall remain outstanding and shall be restated and extended as Revolving Loans hereunder and shall not be deemed to be paid, released, discharged or otherwise satisfied by the execution of this Agreement, and this Agreement shall not constitute a refinancing, substitution or novation of such Loans and Obligations or any of the other rights, duties and obligations of the parties hereunder, and (iii) all indemnification obligations of the Borrowers under the Existing Loan Agreement and any other Loan Documents shall survive the execution and delivery of this Agreement and shall continue in full force and effect for the benefit of the Lenders, the Agent, and any other Person indemnified under the Existing Loan Agreement or any other Loan Document at any time prior to the date of this Agreement.

     13.8 Governing Law. PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, UNLESS OTHERWISE SPECIFIED, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO FEDERAL LAWS RELATING TO NATIONAL BANKS).

     13.9 Survival. All warranties, representations, and covenants made by Borrowers under this Agreement shall be considered to have been relied upon by Agent and each Lender and shall survive the delivery to Lenders of the Notes regardless of any investigation made by Agent or any Lender or on its behalf.

     13.10 Power of Attorney. Each Borrower hereby appoints Agent, and its agents and designees, the true and lawful agents and attorneys-in-fact of such Borrower, with full power of substitution, (a) during the continuance of an Event of Default, to (i) receive, open and dispose of

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all mail addressed to such Borrower relating to the Collateral, (ii) notify and direct the United States Post Office authorities by notice given in the name of such Borrower and signed on its behalf, to change the address for delivery of all mail addressed to such Borrower relating to the Collateral to an address to be designated by Agent, and to cause such mail to be delivered to such designated address where Agent may open all such mail and remove therefrom any notes, checks, acceptances, drafts, money orders or other instruments in payment of the Collateral in which Agent has a security interest hereunder and any documents relative thereto, with full power to endorse the name of such Borrower upon any such notes, checks, acceptances, drafts, money order or other form of payment or on Collateral or security of any kind and to effect the deposit and collection thereof, and Agent shall have the further right and power to endorse the name of such Borrower on any documents otherwise relating to such Collateral, (iii) send notices to such Contract Debtors or account debtors, and (iv) do any and all other things necessary or proper to carry out the intent of this Agreement; and (b) at all times, to (i) sign the name of such Borrower to drafts against Contract Debtors or other account debtors, and execute on behalf of such Borrower assignments, notices of assignments, financing statements and other public records and notices on all other instruments or documents and (ii) do any and all other things necessary or proper to perfect and protect the liens and rights of Agent and Lenders created under this Agreement. Each Borrower agrees that neither Agent or any Lender nor any of its agents, designees or attorneys-in-fact will be liable for any acts of commission or omission, or for any error of judgment or mistake of fact or law, except for those arising from the gross negligence or willful misconduct of the Agent or any Lender or any of their agents, designees or attorneys-in-fact.

The powers granted hereunder are coupled with an interest and shall be irrevocable during the term hereof. Agent shall have the right to apply all money or security otherwise due to Borrowers to the payment of any of the Advances or other sums payable pursuant to this Agreement at such time and in such order of application as Agent may determine.

     13.11 LITIGATION. PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES AMONG ANY BORROWER, AGENT AND LENDERS, PERTAINING TO THIS AGREEMENT. EACH BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS.

     13.12 Severability. To the extent any provision of this Agreement is not enforceable under applicable law, such provision shall be deemed null and void and shall have no effect on the remaining portions of the Agreement.

     13.13 Jury Trial Waiver. BORROWERS, LENDERS AND AGENT EACH IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. BORROWER, LENDERS

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AND AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS PARAGRAPH AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

     13.14 Indemnity of Agent and Lenders by Borrower. EACH BORROWER AGREES TO DEFEND, INDEMNIFY AND HOLD THE AGENT-RELATED PERSONS, AND EACH LENDER AND EACH OF ITS RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, COUNSEL, AGENTS AND ATTORNEYS-IN-FACT (EACH, AN “INDEMNIFIED PERSON”) HARMLESS FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, CHARGES, EXPENSES AND DISBURSEMENTS (INCLUDING ATTORNEY COSTS) OF ANY KIND OR NATURE WHATSOEVER WHICH MAY AT ANY TIME (INCLUDING AT ANY TIME FOLLOWING REPAYMENT OF THE LOANS AND THE TERMINATION, RESIGNATION OR REPLACEMENT OF AGENT OR REPLACEMENT OF ANY LENDER) BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST ANY SUCH PERSON BY A PERSON WHO IS NOT ALSO AN INDEMNIFIED PERSON IN ANY WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY DOCUMENT CONTEMPLATED BY OR REFERRED TO HEREIN, OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR ANY ACTION TAKEN OR OMITTED BY ANY SUCH PERSON UNDER OR IN CONNECTION WITH ANY OF THE FOREGOING, INCLUDING WITH RESPECT TO ANY INVESTIGATION, LITIGATION OR PROCEEDING (INCLUDING ANY INSOLVENCY PROCEEDING OR APPELLATE PROCEEDING) RELATED TO OR ARISING OUT OF THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR THE LOANS OR THE USE OF THE PROCEEDS THEREOF, WHETHER OR NOT ANY INDEMNIFIED PERSON IS A PARTY THERETO (ALL THE FOREGOING, COLLECTIVELY, THE “INDEMNIFIED LIABILITIES”); PROVIDED, THAT, BORROWERS SHALL HAVE NO OBLIGATION HEREUNDER TO ANY INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES (I) RESULTING SOLELY FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PERSON OR (II) THAT ARE AWARDED AS DIRECT OR ACTUAL DAMAGES (AND NOT ANY DAMAGES CONSTITUTING SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE) TO ANY BORROWER OR GUARANTOR IN AN ACTION BROUGHT BY SUCH BORROWER OR GUARANTOR AGAINST AN INDEMNIFIED PERSON FOR BREACH OF SUCH INDEMNIFIED PERSON’S OBLIGATIONS HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT IF SUCH BORROWER OR GUARANTOR HAS OBTAINED A FINAL, NON-APPEALABLE JUDGMENT IN ITS FAVOR IN SUCH ACTION AS DETERMINED BY A COURT OF COMPETENT JURISDICTION. THE AGREEMENTS IN THIS PARAGRAPH 13.14 SHALL SURVIVE PAYMENT OF ALL OTHER OBLIGATIONS.

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     13.15 Limitation of Liability. NO CLAIM MAY BE MADE BY ANY BORROWER, AGENT, ANY LENDER OR OTHER PERSON AGAINST ANY BORROWER, AGENT, ANY LENDER, OR THE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, OR AGENTS OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF, OR RELATED TO, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, AND BORROWER, AGENT AND EACH LENDER HEREBY WAIVE, RELEASE AND AGREE NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

     13.16 Right of Setoff. In addition to any rights and remedies of Lenders provided by law, if an Event of Default exists or the Obligations have been accelerated, each Lender is authorized at any time and from time to time, without prior notice to Borrowers, any such notice being waived by Borrower to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other indebtedness at any time owing by, such Lender to or for the credit or the account of Borrowers against any and all Obligations owing to such Lender, now or hereafter existing, irrespective of whether or not Agent or such Lender shall have made demand under this Agreement or any Loan Document and although such Obligations may be contingent or unmatured. Each Lender agrees promptly to notify Borrowers and Agent after any such set-off and application made by such Lender; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE ANY RIGHT OF SET-OFF, BANKER’S LIEN, OR THE LIKE AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF BORROWER HELD OR MAINTAINED BY SUCH LENDER WITHOUT THE PRIOR WRITTEN UNANIMOUS CONSENT OF THE LENDERS.

     13.17 Joint and Several Liability.

          (a) Each Borrower agrees that it is jointly and severally, directly and primarily liable to Agent and Lenders for payment in full of the Obligations and that such liability is independent of the duties, obligations, and liabilities of the other Borrowers. Agent or any Lender may bring a separate action or actions on each, any, or all of the Obligations against any Borrower, whether action is brought against the other Borrower(s).

          (b) Each Borrower agrees that any release which may be given by Agent or any Lender to the other Borrowers or any guarantor or endorser of any of the Obligations shall not release such other Borrowers from their obligations hereunder.

          (c) Each Borrower hereby waives any right to assert against Agent or any Lender any defense (legal or equitable), setoff, counterclaim, or claims which any Borrower individually may now or any time hereafter have against the other Borrowers or any other party liable to Agent or any Lender in any manner or way whatsoever.

          (d) Any and all present and future indebtedness of a Borrower to the other Borrowers is hereby subordinated to the full payment and performance of the Obligations.

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          (e) Each Borrower is presently informed as to the financial condition of the other Borrowers and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations. Each Borrower hereby covenants that it will keep itself informed as to the financial condition of the other Borrowers, the status of the other Borrowers and of all circumstances which bear upon the risk of nonpayment. Absent a written request from any Borrower to Agent or any Lender for information, each Borrower hereby waives any and all rights it may have to require Agent or any Lender to disclose to such Borrower any information which Agent or any Lender may now or hereafter acquire concerning the condition or circumstances of the other Borrower.

          (f) Each Borrower waives all rights to notices of default, existence, creation, or incurring of new or additional indebtedness, and all other notices of formalities to which such Borrower may, as joint and several Borrower hereunder, be entitled.

          (g) At the request of Borrowers to facilitate and expedite the administration and accounting processes and procedures of their borrowings hereunder, Agent and Lenders have agreed, in lieu of maintaining separate loan accounts, that Agent shall maintain a single loan account under the name of Borrowers (“Loan Account”). The Loan shall be made jointly and severally to the Borrowers and shall be charged to their Loan Account, together with all interest and other charges as permitted under and pursuant to this Agreement. The Loan shall be credited with all repayments of Obligations received by Agent, on behalf of Lenders, from any Borrower as paid into the Collection Account pursuant to the terms of this Agreement.

          (h) Requests for borrowings may be made by any Borrower, pursuant to the terms of Section Two hereof. Each Borrower expressly agrees and acknowledges that neither Agent nor any Lender shall have any responsibility to inquire into the correctness of the apportionment or allocation of or any disposition by any of the Borrowers of (i) any Obligations, or (ii) any of the expenses and other items charged to the Loan Account pursuant to this Agreement. All Obligations and such expenses and other items shall be made for the collective, joint, and several account of the Borrowers and shall be charged to their Loan Account.

(i) Each Borrower agrees and acknowledges that the administration of the Obligations on a combined basis as set forth in this Paragraph 13.17 is being done as an accommodation to Borrowers and at their request, and that neither Agent nor any Lender shall incur any liability to any of the Borrowers as a result thereof. TO INDUCE AGENT AND LENDERS TO DO SO, AND IN CONSIDERATION THEREOF, EACH OF THE BORROWERS HEREBY AGREES TO INDEMNIFY AND HOLD AGENT AND EACH LENDER HARMLESS FROM AND AGAINST ANY AND ALL LIABILITY, EXPENSES, LOSS, DAMAGE, CLAIM OF DAMAGE, OR INJURY, MADE AGAINST AGENT OR ANY LENDER BY ANY OF BORROWERS OR BY ANY OTHER PERSON, ARISING FROM OR INCURRED BY REASON OF SUCH ADMINISTRATION OF THE OBLIGATIONS, EXCEPT TO THE EXTENT SUCH LIABILITIES, EXPENSES, LOSSES, DAMAGES, CLAIMS AND INJURIES (I) RESULT SOLELY FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF AGENT OR ANY LENDER OR (II) ARE AWARDED AS DIRECT OR ACTUAL DAMAGES (AND NOT ANY DAMAGES CONSTITUTING SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE) TO ANY BORROWER OR GUARANTOR IN AN ACTION BROUGHT BY SUCH BORROWER OR GUARANTOR AGAINST AN INDEMNIFIED PERSON FOR BREACH OF SUCH INDEMNIFIED PERSON’S OBLIGATIONS HEREUNDER OR

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UNDER ANY OTHER LOAN DOCUMENT IF SUCH BORROWER OR GUARANTOR HAS OBTAINED A FINAL, NON-APPEALABLE JUDGMENT IN ITS FAVOR ON SUCH CLAIM AS DETERMINED BY A COURT OF COMPETENT JURISDICTION.

          (j) Each Borrower represents and warrants to Agent and each Lender that the collective administration of the Obligations is being undertaken by Agent and each Lender pursuant to this Paragraph 13.17, because Borrowers are integrated in their operation and administration and require financing on a basis permitting the availability of credit from time to time to each of the Borrowers. Each Borrower will derive benefit, directly and indirectly, from such collective administration and credit availability because the successful operation of each Borrower is enhanced by the continued successful performance of the integrated group.

          (k) Each Borrower hereby postpones and subordinates to the final payment in full of the Obligations any right of subrogation it has or may have against the other Borrowers with respect to the Obligations or any other indebtedness incurred pursuant to this Agreement. In addition, each Borrower hereby postpones any right to proceed against the other Borrowers, now or hereafter, for contribution, indemnity, reimbursement, and any other rights and claims, whether direct or indirect, liquidated or contingent, such Borrower may now have or hereafter have as against any other Borrower with respect to the Obligations or any other indebtedness incurred pursuant to this Agreement, until all Obligations have been finally paid in full. Each Borrower agrees that in light of the immediately foregoing agreements, the execution of this Agreement shall not be deemed to make such Borrower a “creditor” of any other Borrower, and that for purposes of §§547 and 550 of the United States Bankruptcy Code (11 U.S.C. §§547, 550), such Borrower shall not be deemed a “creditor” of the other Borrower.

     13.18 Counterparts. This Agreement may be executed in one or more counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or electronic mail shall be effective as delivery of a manually executed counterpart to this Agreement.

     13.19 Headings. The headings, captions and arrangements used in this Agreement are for convenience only and shall not affect the interpretation of this Agreement.

     13.20 No Waivers; Cumulative Remedies. No failure by Agent or any Lender to exercise any right, remedy, or option under this Agreement or any present or future supplement thereto, or in any other agreement between or among Borrower and Agent and/or any Lender, or delay by Agent or any Lender in exercising the same, will operate as a waiver thereof. No waiver by Agent or any Lender will be effective unless it is in writing, and then only to the extent specifically stated. No waiver by Agent or the Lenders on any occasion shall affect or diminish Agent’s and each Lender’s rights thereafter to require strict performance by Borrower of any provision of this Agreement. Agent and the Lenders may proceed directly to collect the Obligations without any prior recourse to the Collateral. Agent’s and each Lender’s rights under this Agreement will be cumulative and not exclusive of any other right or remedy which Agent or any Lender may have.

     13.21 Other Security and Guarantees. Agent, may, without notice or demand and without affecting any Borrower’s obligations hereunder, from time to time: (a) take from any Person and hold collateral (other than the Collateral) for the payment of all or any part of the

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Obligations and exchange, enforce or release such collateral or any part thereof; and (b) accept and hold any endorsement or guaranty of payment of all or any part of the Obligations and release or substitute any such endorser or guarantor, or any Person who has given any Lien in any other collateral as security for the payment of all or any part of the Obligations, or any other Person in any way obligated to pay all or any part of the Obligations. The Lenders and the Letter of Credit Issuer irrevocably authorize Agent, at its option and in its discretion, to release any Guarantor from its obligations under a guaranty and/or release any security interest in the Collateral owned by such Guarantor if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder. Upon request by Agent at any time, the Majority Lenders will confirm in writing Agent’s authority to release any Guarantor from its obligations under the Guaranty pursuant to this Paragraph 13.21.

     13.22 NO ORAL AGREEMENTS. THIS AGREEMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS AS WRITTEN, REPRESENT THE FINAL AGREEMENT AMONG AGENT, LENDERS AND BORROWERS AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG AGENT, LENDERS AND BORROWERS.

     13.23 Patriot Act Notice. Lender hereby notifies Borrowers and Guarantors that pursuant to the requirements of the Patriot Act, Lender is required to obtain, verify and record information that identifies each Borrower and Guarantor, including its legal name, address, tax ID number and other information that will allow Lender to identify it in accordance with the Patriot Act. Lender may also require information regarding Borrowers’ management and owners, such as legal name, address, social security number and date of birth in accordance with the Patriot Act.

     13.24 Replacement of Lenders. If (a) only one Lender requests compensation under Paragraph 2.13, (b) if the Borrower is required to pay any additional amount to only one Lender or any Governmental Authority for the account of one Lender pursuant to Paragraph 2.11, (c) if any Lender is a Defaulting Lender, (d) if any Lender is acquired by or merges with any other Person and such Lender is not the surviving Person, or (e) if only one Lender fails to approve an amendment, consent or waiver hereunder which is approved by the Majority Lenders, then the Borrower may, at its sole expense and effort, upon notice to such Lender and Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Paragraph 11.2), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

          (i) Borrowers or the assignee shall have paid Agent the assignment fee specified in subparagraph 11.2(a).

          (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Paragraph 2.14 from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts);

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          (iii) such assignment does not conflict with applicable laws; and

          (iv) such assignment is completed within ninety (90) days of any request in (a) above, payment in (b) above, default in (c) above, merger in (d) above, or any failure to approve in (e) above.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply. The right to replace a Lender hereunder in subparagraphs (a), (b) and (e) does not apply if more than one Lender is affected in each scenario.

[signatures continued on next page]

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          IN WITNESS WHEREOF the parties have executed this Agreement on the day and year first above written.

BORROWERS

REGIONAL MANAGEMENT CORP.
REGIONAL FINANCE CORPORATION OF SOUTH CAROLINA
REGIONAL FINANCE CORPORATION OF GEORGIA
REGIONAL FINANCE CORPORATION OF TEXAS
REGIONAL FINANCE CORPORATION OF NORTH CAROLINA
REGIONAL FINANCE CORPORATION OF ALABAMA
REGIONAL FINANCE CORPORATION OF TENNESSEE

By:	/s/ Robert D. Barry
	Name: Robert D. Barry
	Title: EVP/CFO of each of the above-listed corporations

     Signature page to Fourth Amended and Restated Loan and Security Agreement

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AGENT

BANK OF AMERICA, N.A.,
as Agent

By:	/s/ Bruce Jenks
	Name: Bruce Jenks
	Title: Vice President

LENDERS

BANK OF AMERICA, N.A.,
as a Lender and Letter of Credit Issuer

By:	/s/ Bruce Jenks
	Name: Bruce Jenks
	Title: Vice President
	Address: 335 Madison Avenue                New York, NY 10017                Attn: Bruce Jenks, Vice President
	Fax: (212) 503-7340

Commitment = $75,000,000.00

BMO HARRIS FINANCING, INC., f/k/a BMO CAPITAL MARKETS FINANCING, INC.
as a Lender

By:	/s/ Michael S. Cameli
	Name: Michael S. Cameli
	Title: SVP
	Address: 115 South LaSalle Street, 19W                Chicago, Illinois 60603
	Fax: (312) 765-8353

Commitment = $32,000,000.00

Signature page to Fourth Amended and Restated Loan and Security Agreement

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CAPITAL ONE, N.A.,
as a Lender

By:	/s/ Bev Abrahams
	Name: Bev Abrahams
	Title: SVP
	Address: 440 Third Street                Baton Rouge, Louisiana 70802 Fax: (225) 381-7570

Commitment = $35,000,000.00

FIRST TENNESSEE BANK NATIONAL ASSOCIATION,
as a Lender

By:	/s/ Patrick Green
	Name: Patrick Green
	Title: Vice President
	Address: 165 Madison Avenue                 Memphis, Tennessee 38103
	Fax: (901) 523-4633

Commitment = $30,000,000.00

TEXAS CAPITAL BANK, N.A.,
as a Lender

By:	/s/ Stephanie Hopkins
	Name: Stephanie Hopkins
	Title: SVP

Commitment = $17,000,000.00

WELLS FARGO BANK, NATIONAL ASSOCIATION (successor by merger to Wells Fargo Preferred Capital,
Inc.),
as a Lender

By:	/s/ William M. Laird
	Name: William M. Laird
	Title: SVP

Commitment = $66,000,000.00

Signature page to Fourth Amended and Restated Loan and Security Agreement

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EXHIBIT “A”

NOTICE OF BORROWING

Date: _______________________, 20___

To: Bank of America, N.A., as Agent, regarding the Fourth Amended and Restated Loan and Security Agreement dated as of January 18, 2012 (as extended, renewed, amended or restated from time to time, the “Loan and Security Agreement”) among Regional Management Corp., Regional Finance Corporation of South Carolina, Regional Finance Corporation of Georgia, Regional Finance Corporation of Texas, Regional Finance Corporation of North Carolina, Regional Finance Corporation of Alabama and Regional Finance Corporation of Tennessee, as borrowers, the lenders party thereto and Bank of America, N.A., as Agent.

Ladies and Gentlemen:

     The undersigned, ____________________ (the “Borrower”), refers to the Loan and Security Agreement, the terms defined therein being used herein as therein defined, and hereby gives you notice irrevocably of the Borrowing specified below:

1. The Business Day of the proposed Borrowing is _________________, 20__.

2. The aggregate amount of the proposed Borrowing is $_______________.

3. The Borrowing is to be comprised of $________ of Base Rate Revolving Loans and $__________ of LIBOR Revolving Loans.

4. The duration of the Interest Period for the LIBOR Revolving Loans, if any, included in the Borrowing shall be ____________ months.

The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the proposed Borrowing, before and after giving effect thereto and to the application of the proceeds therefrom:

(a) The representations and warranties of Borrower contained in the Loan and Security Agreement are true and correct in all material respects as though made on and as of such date (except for representations and warranties that expressly relate to an earlier date);

(b) No Default or Event of Default has occurred and is continuing, or would result from such proposed Borrowing; and

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(c) The proposed Borrowing will not cause the aggregate principal amount of all outstanding Revolving Loans to exceed the Availability or the Total Credit Facility.

[NAME OF BORROWER]

By:
	Name:
	Title:

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EXHIBIT “B”

NOTICE OF CONVERSION/CONTINUATION

Date: _______________________, 20___

To: Bank of America, N.A., as Agent, regarding the Fourth Amended and Restated Loan and Security Agreement dated as of January 18, 2012 (as extended, renewed, amended or restated from time to time, the “Loan and Security Agreement”) among Regional Management Corp., Regional Finance Corporation of South Carolina, Regional Finance Corporation of Georgia, Regional Finance Corporation of Texas, Regional Finance Corporation of North Carolina, Regional Finance Corporation of Alabama and Regional Finance Corporation of Tennessee, as borrowers, the lenders party thereto and Bank of America, N.A., as Agent.

Ladies and Gentlemen:

     The undersigned, ______________________ (the “Borrower”), refers to the Loan and Security Agreement, the terms defined therein being used herein as therein defined, and hereby gives you notice irrevocably of the [conversion] [continuation] of the Loans specified herein, that:

1. The Conversion/Continuation Date is ______________________, 20__.

2. The aggregate amount of the Loans to be [converted] [continued] is $_____________.

3. The Loans are to be [converted into] [continued as] [LIBOR] [Base Rate] Revolving Loans.

4. The duration of the Interest Period for the Loans included in the [conversion] [continuation] shall be _____ months.

The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the proposed Conversion/Continuation Date, before and after giving effect thereto and to the application of the proceeds therefrom:

(a) The representations and warranties of Borrower contained in the Loan and Security Agreement are true and correct in all material respects as though made on and as of such date (except for representations and warranties that expressly relate to an earlier date);

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(b) No Default or Event of Default has occurred and is continuing, or would result from such proposed [conversion] [continuation]; and

(c) The proposed conversion-continuation will not cause the aggregate principal amount of all outstanding Revolving Loans to exceed the Availability or the Total Credit Facility.

[NAME OF BORROWER]

By:
	Name:
	Title:

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EXHIBIT “C”

[FORM OF] ASSIGNMENT AND ACCEPTANCE AGREEMENT

     This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this “Assignment and Acceptance”) dated as of ____________________, 20__ is made between ____________________ (the “Assignor”) and __________________________ (the “Assignee”).

RECITALS

WHEREAS, the Assignor is party to that certain Fourth Amended and Restated Loan and Security Agreement dated as of January 18, 2012 (as extended, renewed, amended or restated from time to time, the “Loan and Security Agreement”) among Regional Management Corp., Regional Finance Corporation of South Carolina, Regional Finance Corporation of Georgia, Regional Finance Corporation of Texas, Regional Finance Corporation of North Carolina, Regional Finance Corporation of Alabama and Regional Finance Corporation of Tennessee, as borrowers, the lenders party thereto and Bank of America, N.A., as Agent. Any terms defined in the Credit Agreement and not defined in this Assignment and Acceptance are used herein as defined in the Credit Agreement;

     WHEREAS, as provided under the Credit Agreement, the Assignor has committed to making Loans (the “Committed Loans”) to the Borrowers in an aggregate amount not to exceed $__________ (the “Commitment”);

     WHEREAS, the Assignor has made Committed Loans in the aggregate principal amount of $__________ to the Borrowers;

     WHEREAS, [the Assignor has acquired a participation in its pro rata share of the Lenders’ liabilities under Letters of Credit in an aggregate principal amount of $____________ (the “L/C Obligations”)] [no Letters of Credit are outstanding under the Credit Agreement]; and

     WHEREAS, the Assignor wishes to assign to the Assignee [part of the] [all] rights and obligations of the Assignor under the Credit Agreement in respect of its Commitment, together with a corresponding portion of each of its outstanding Committed Loans and L/C Obligations, in an amount equal to $__________ (the “Assigned Amount”) on the terms and subject to the conditions set forth herein and the Assignee wishes to accept assignment of such rights and to assume such obligations from the Assignor on such terms and subject to such conditions;

     NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, the parties hereto agree as follows:

     Section 1. Assignment and Acceptance.

          (a) Subject to the terms and conditions of this Assignment and Acceptance, (i) the Assignor hereby sells, transfers and assigns to the Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes from the Assignor, without recourse and without representation or warranty (except as provided in this Assignment and Acceptance) _______%

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(the “Assignee’s Percentage Share”) of (A) the Commitment, the Committed Loans and the L/C Obligations of the Assignor and (B) all related rights, benefits, obligations, liabilities and indemnities of the Assignor under and in connection with the Credit Agreement and the Loan Documents.

          (b) With effect on and after the Effective Date (as defined in Section 5 hereof), the Assignee shall be a party to the Credit Agreement and succeed to all of the rights and be obligated to perform all of the obligations of a Lender under the Credit Agreement, including the requirements concerning confidentiality and the payment of indemnification, with a Commitment in an amount equal to the Assigned Amount. The Assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender. It is the intent of the parties hereto that the Commitment of the Assignor shall, as of the Effective Date, be reduced by an amount equal to the Assigned Amount and the Assignor shall relinquish its rights and be released from its obligations under the Credit Agreement to the extent such obligations have been assumed by the Assignee; provided, however, the Assignor shall not relinquish its rights under Paragraphs 2.11, 2.18, 13.2, 13.14 and 13.17 of the Credit Agreement to the extent such rights relate to the time prior to the Effective Date.

          (c) After giving effect to the assignment and assumption set forth herein, on the Effective Date the Assignee’s Commitment will be $_________.

          (d) After giving effect to the assignment and assumption set forth herein, on the Effective Date the Assignor’s Commitment will be $_________.

     Section 2. Payments.

          (a) As consideration for the sale, assignment and transfer contemplated in Section 1 hereof, the Assignee shall pay to the Assignor on the Effective Date in immediately available funds an amount equal to $__________, representing the Assignee’s Pro Rata Share of the principal amount of all Committed Loans.

          (b) The Assignee further agrees to pay to the Agent a processing fee in the amount specified in subparagraph 11.2(a) of the Credit Agreement.

     Section 3. Reallocation of Payments.

     Any interest, fees and other payments accrued to the Effective Date with respect to the Commitment, and Committed Loans and L/C Obligations shall be for the account of the Assignor. Any interest, fees and other payments accrued on and after the Effective Date with respect to the Assigned Amount shall be for the account of the Assignee. Each of the Assignor and the Assignee agrees that it will hold in trust for the other party any interest, fees and other amounts which it may receive to which the other party is entitled pursuant to the preceding sentence and pay to the other party any such amounts which it may receive promptly upon receipt.

     Section 4. Independent Credit Decision.

     The Assignee (a) acknowledges that it has received a copy of the Credit Agreement and the Schedules and Exhibits thereto, together with copies of the most recent financial statements

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of the Borrowers, and such other documents and information as it has deemed appropriate to make its own credit and legal analysis and decision to enter into this Assignment and Acceptance; and (b) agrees that it will, independently and without reliance upon the Assignor, the Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit and legal decisions in taking or not taking action under the Credit Agreement.

     Section 5. Effective Date; Notices.

          (a) As between the Assignor and the Assignee, the effective date for this Assignment and Acceptance shall be __________, 20___ (the “Effective Date”); provided that the following conditions precedent have been satisfied on or before the Effective Date:

               (i) this Assignment and Acceptance shall be executed and delivered by the Assignor and the Assignee;

               [(ii) the consent of the Agent and the Borrowers required for an effective assignment of the Assigned Amount by the Assignor to the Assignee shall have been duly obtained and shall be in full force and effect as of the Effective Date;]

               (iii) the Assignee shall pay to the Assignor all amounts due to the Assignor under this Assignment and Acceptance;

               [(iv) the Assignee shall have complied with Paragraph 11.2(a) of the Credit Agreement (if applicable);]

               (v) the processing fee referred to in Section 2(b) hereof and in subparagraph 11.2(a) of the Credit Agreement shall have been paid to the Agent; and

          (b) Promptly following the execution of this Assignment and Acceptance, the Assignor shall deliver to the Borrowers and the Agent for acknowledgment by the Agent, a Notice of Assignment in the form attached hereto as Schedule 1.

     Section Section 6. Agent. [INCLUDE ONLY IF ASSIGNOR IS AGENT]

          (a) The Assignee hereby appoints and authorizes the Assignor to take such action as agent on its behalf and to exercise such powers under the Credit Agreement as are delegated to the Agent by the Lenders pursuant to the terms of the Credit Agreement.

          (b) The Assignee shall assume no duties or obligations held by the Assignor in its capacity as Agent under the Credit Agreement.]

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     Section 7. Withholding Tax.

     The Assignee (a) represents and warrants to the Lender, the Agent and the Borrowers that under applicable law and treaties no tax will be required to be withheld by the Lender with respect to any payments to be made to the Assignee hereunder, (b) agrees to furnish (if it is organized under the laws of any jurisdiction other than the United States or any State thereof) to the Agent and the Borrowers at least five Business Days prior to the time that the Agent or Borrowers is required to make any payment of principal, interest or fees hereunder, duplicate executed originals of either IRS Form W-8BEN or W-8ECI (or any subsequent replacement or substitute form therefor) (wherein the Assignee certifies as to a complete exemption from U.S. federal income withholding tax on all payments hereunder) and agrees to provide new such forms upon the expiration or obsolescence of any previously delivered form or comparable statements in accordance with applicable U.S. law and regulations and amendments thereto, duly executed and completed by the Assignee, and (c) agrees to comply with all applicable U.S. laws and regulations with regard to such withholding tax exemption.

     Section 8. Representations and Warranties.

          (a) The Assignor represents and warrants that (i) it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any Lien or other adverse claim; (ii) it is duly organized and existing and it has the full power and authority to take, and has taken, all action necessary to execute and deliver this Assignment and Acceptance and any other documents required or permitted to be executed or delivered by it in connection with this Assignment and Acceptance and to fulfill its obligations hereunder; (iii) no notices to, or consents, authorizations or approvals of, any Person are required (other than any already given or obtained) for its due execution, delivery and performance of this Assignment and Acceptance, and apart from any agreements or undertakings or filings required by the Credit Agreement, no further action by, or notice to, or filing with, any Person is required of it for such execution, delivery or performance; and (iv) this Assignment and Acceptance has been duly executed and delivered by it and constitutes the legal, valid and binding obligation of the Assignor, enforceable against the Assignor in accordance with the terms hereof, subject, as to enforcement, to bankruptcy, insolvency, moratorium, reorganization and other laws of general application relating to or affecting creditors’ rights and to general equitable principles.

          (b) The Assignor makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement or any other instrument or document furnished pursuant thereto. The Assignor makes no representation or warranty in connection with, and assumes no responsibility with respect to, the solvency, financial condition or statements of the Borrowers, or the performance or observance by the Borrowers, of any of its respective obligations under the Credit Agreement or any other instrument or document furnished in connection therewith.

          (c) The Assignee represents and warrants that (i) it is duly organized and existing and it has full power and authority to take, and has taken, all action necessary to execute and deliver this Assignment and Acceptance and any other documents required or permitted to be executed or delivered by it in connection with this Assignment and Acceptance, and to fulfill its obligations hereunder; (ii) no notices to, or consents, authorizations or approvals of, any Person

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are required (other than any already given or obtained) for its due execution, delivery and performance of this Assignment and Acceptance; and apart from any agreements or undertakings or filings required by the Credit Agreement, no further action by, or notice to, or filing with, any Person is required of it for such execution, delivery or performance; (iii) this Assignment and Acceptance has been duly executed and delivered by it and constitutes the legal, valid and binding obligation of the Assignee, enforceable against the Assignee in accordance with the terms hereof, subject, as to enforcement, to bankruptcy, insolvency, moratorium, reorganization and other laws of general application relating to or affecting creditors’ rights and to general equitable principles; and (iv) it is an Eligible Assignee.

     Section 9. Further Assurances.

     The Assignor and the Assignee each hereby agree to execute and deliver such other instruments, and take such other action, as either party may reasonably request in connection with the transactions contemplated by this Assignment and Acceptance, including the delivery of any notices or other documents or instruments to the Borrowers or the Agent, which may be required in connection with the assignment and assumption contemplated hereby.

     Section 10. Miscellaneous.

          (a) Any amendment or waiver of any provision of this Assignment and Acceptance shall be in writing and signed by the parties hereto. No failure or delay by either party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof and any waiver of any breach of the provisions of this Assignment and Acceptance shall be without prejudice to any rights with respect to any other or further breach thereof.

          (b) All payments made hereunder shall be made without any set-off or counterclaim.

          (c) The Assignor and the Assignee shall each pay its own costs and expenses incurred in connection with the negotiation, preparation, execution and performance of this Assignment and Acceptance.

          (d) This Assignment and Acceptance may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.

          (e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. The Assignor and the Assignee each irrevocably submits to the non-exclusive jurisdiction of any State or Federal court sitting in New York over any suit, action or proceeding arising out of or relating to this Assignment and Acceptance and irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such New York State or Federal court. Each party to this Assignment and Acceptance hereby irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding.

          (f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A

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TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT AGREEMENT, ANY RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR STATEMENTS (WHETHER ORAL OR WRITTEN).

     IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Assignment and Acceptance to be executed and delivered by their duly authorized officers as of the date first above written.

[ASSIGNOR]
By:
	Name:
	Title:
By:
	Name:
	Title:
	Address:
[ASSIGNEE]
By:
	Name:
	Title:
By:
	Name:
	Title:
	Address:

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SCHEDULE 1

NOTICE OF ASSIGNMENT AND ACCEPTANCE

_______________, ____

Bank of America, N.A., as Agent
335 Madison Avenue

New York, New York 10017

Attn: _________________

Regional Management Corporation
P.O. Box 776

Mauldin, South Carolina 29662

Attn:__________________

Ladies and Gentlemen:

We refer to the Fourth Amended and Restated Loan and Security Agreement dated as of January 18, 2012 (as extended, renewed, amended or restated from time to time, the “Loan and Security Agreement”) among Regional Management Corp., Regional Finance Corporation of South Carolina, Regional Finance Corporation of Georgia, Regional Finance Corporation of Texas, Regional Finance Corporation of North Carolina, Regional Finance Corporation of Alabama and Regional Finance Corporation of Tennessee, as borrowers, the lenders party thereto and Bank of America, N.A., as Agent. Terms defined in the Credit Agreement are used herein as therein defined.

     1. We hereby give you notice of, and request your consent to, the assignment by __________________ (the “Assignor”) to _______________ (the “Assignee”) of _____% of the right, title and interest of the Assignor in and to the Credit Agreement (including the right, title and interest of the Assignor in and to the Commitments of the Assignor, all outstanding Loans made by the Assignor and the Assignor’s participation in the Letters of Credit pursuant to the Assignment and Acceptance Agreement attached hereto (the “Assignment and Acceptance”). We understand and agree that the Assignor’s Commitment, as of ________________, 20___, is $___________, the aggregate amount of its outstanding Loans is $_____________, and its participation in L/C Obligations is $____________.

The Assignee agrees that, upon receiving the consent of the Agent and, if applicable, the Borrowers to such assignment, the Assignee will be bound by the terms of the Credit Agreement as fully and to the same extent as if the Assignee were the Lender originally holding such interest in the Credit Agreement.

The following administrative details apply to the Assignee:

(A) Notice Address:

Assignee name:____________

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Address:
Attention:
Telephone:	( )
Telecopier:	( )

Telex (Answerback):

(B) Payment Instructions:

Account No.:

At:

Reference:

Attention:

     2. You are entitled to rely upon the representations, warranties and covenants of each of the Assignor and Assignee contained in the Assignment and Acceptance.

     IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Notice of Assignment and Acceptance to be executed by their respective duly authorized officials, officers or agents as of the date first above mentioned.

Very truly yours, [NAME OF ASSIGNOR]
By:
	Name:
	Title:
[NAME OF ASSIGNEE]
By:
	Name:
	Title:

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ACKNOWLEDGED AND ASSIGNMENT CONSENTED TO: AGENT: Bank of America, N.A., as Agent
By:
	Name:
	Title:

If applicable,

BORROWERS:
REGIONAL MANAGEMENT CORP.
REGIONAL FINANCE CORPORATION OF SOUTH CAROLINA
REGIONAL FINANCE CORPORATION OF GEORGIA
REGIONAL FINANCE CORPORATION OF TEXAS
REGIONAL FINANCE CORPORATION OF NORTH CAROLINA
REGIONAL FINANCE CORPORATION OF ALABAMA
REGIONAL FINANCE CORPORATION OF TENNESSEE

By:
	Name:
	Title:	________________ of each of the above-listed corporations

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EXHIBIT D (FORM OF GUARANTY)

GUARANTY

          THIS GUARANTY (as the same now exists or may be hereafter amended, supplemented or otherwise modified from time to time, this “Guaranty”) dated as of _____ __, 200_, made by _____________________ (the “Guarantor”) in favor of BANK OF AMERICA, N.A., as agent for the Lenders (in such capacity, the “Agent”). Except as otherwise defined herein, capitalized terms used herein and defined in the Loan Agreement (as hereinafter defined) shall be used herein as so defined.

W I T N E S S E T H:

          WHEREAS, Regional Management Corp., a Delaware corporation (“Regional”), Regional Finance Corporation of South Carolina, a South Carolina corporation, Regional Finance Corporation of Georgia, a Georgia corporation, Regional Finance Corporation of Texas, a Texas corporation, Regional Finance Corporation of North Carolina, a North Carolina corporation, Regional Finance Corporation of Alabama, an Alabama corporation and Regional Finance Corporation of Tennessee, a Tennessee corporation (individually and collectively, the “Borrowers”) are parties to that certain Fourth Amended and Restated Loan and Security Agreement, dated as of January 18, 2012 (as amended, restated, modified or supplemented from time to time, the “Loan Agreement”) among the Borrowers, Bank of America, N.A. as agent (the “Agent”), and the lenders party thereto (the “Lenders”);

          WHEREAS, the Guarantor is a wholly-owned Subsidiary of Regional;

          WHEREAS, the execution and delivery by the Guarantor of this Guaranty is required pursuant to Paragraph 8.8 of the Loan Agreement; and

          WHEREAS, the Guarantor will obtain benefits as a result of the credit extended to the Borrowers under the Loan Agreement and, accordingly, the Guarantor desires to execute and deliver this Guaranty in order induce the Lenders to continue to extend credit to the Borrowers;

          NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to the Guarantor, the receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby makes the following representations and warranties to the Agent, for the benefit of the Agent and the Lenders, and hereby covenants and agrees with the Agent, for the benefit of the Agent and the Lenders, as follows:

          Section 1. GUARANTY

          1.1 Guaranteed Obligations. (a) The Guarantor unconditionally and irrevocably guarantees to the Agent and Lenders, and their successors and assigns, the payment when due (whether by acceleration or otherwise) of all Obligations of the Borrowers (the “Guaranteed Obligations”) including, without limitation, (i) the aggregate unpaid principal balance of all Loans made under the Loan Agreement, (ii) all interest accrued thereon and all

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fees payable under the Loan Agreement and the other Loan Documents (including all interest accrued from the commencement of a case under the Federal Bankruptcy Code by or against the Borrowers or other bankruptcy, insolvency or reorganization proceeding for the Borrowers regardless of whether such interest or fees are an allowed claim in any such case or proceeding) and (iii) all other amounts now or hereafter payable by the Borrowers under the Loan Agreement, any promissory notes issued thereunder (the “Notes”) or any other Loan Document to which the Borrowers is a party, when and as the same shall become due, whether at the stated date or dates for payment, by acceleration or otherwise, according to the terms of the Loan Agreement, the Notes or any other applicable Loan Document, without regard to any defense, setoff or counterclaim that may at any time be asserted by or available to the Borrowers and notwithstanding any discharge of the Borrowers from the Guaranteed Obligations.

          (b) The Guarantor hereby agrees that if any amount of the Guaranteed Obligations shall not be paid promptly when due, the Guarantor shall pay such amount to the Agent immediately after written demand is made therefor by the Agent. All payments by the Guarantor under this Guaranty shall be paid in Dollars and in immediately available funds at the office of the Agent at 335 Madison Avenue, New York, New York 10017 or at such other office or to such account of the Agent as the Agent shall designate in writing from time to time.

          (c) It is the intention of the Guarantor that the obligations of the Guarantor hereunder shall be in, but not in excess of, the maximum amount permitted by applicable law. To that end, but only to the extent such obligations would otherwise be avoidable, notwithstanding anything to the contrary contained herein or in any other Loan Documents, the obligations of the Guarantor hereunder shall be reduced to that amount which after giving effect thereto and to all other liabilities of the Guarantor (absolute or contingent) would not render the Guarantor insolvent or unable to pay its debts and liabilities as they mature or leave the Guarantor with an unreasonably small capital. For purposes of the foregoing, “insolvent” or “unreasonably small capital” and the effective time of reductions required by this paragraph 1.1(c) shall be determined in accordance with applicable law.

          (d) Notwithstanding anything to the contrary contained herein or in any other agreement, document or instrument, until the Obligations are paid in full, the Guarantor hereby irrevocably waives to the extent permitted by law all rights of subrogation (whether such rights arise under common law, contract or Federal law (including, without limitation, Section 509 or the U.S. Bankruptcy Code) to the claims of the Agent or any Lender against the Borrowers, and waives all contractual, statutory and common law rights of contribution, reimbursement, indemnification and similar rights and claims (as such term is defined in the U.S. Bankruptcy Code) against the Borrowers which may arise in connection with, or as a result of, this Guaranty.

          1.2 Obligations Unconditional. (a) The obligations of the Guarantor under this Guaranty shall be absolute, unconditional and irrevocable and shall remain in full force and effect until the date the Obligations are paid in full (the “Release Date”). This Guaranty is a guaranty of payment and not of collection and the obligations of the Guarantor hereunder shall not be affected or modified and shall remain in full force and effect regardless of the occurrence from time to time of any event, including, without limitation, any of the following, whether or not such event shall occur with notice to, or with the consent of, the Guarantor:

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     (i) the waiver, surrender, compromise, settlement, discharge, release or termination of any or all of the Guaranteed Obligations, except for the payment in full in accordance with the Loan Agreement of the Obligations;

     (ii) the failure to give any notice to the Borrowers, except to the extent required by the Loan Agreement or the Loan Documents;

     (iii) the extension of the time for payment or performance of the Guaranteed Obligations;

     (iv) the application of any sums by whomsoever paid or howsoever realized to any liability or liabilities of the Borrowers to the Agent and Lenders regardless of what liability or liabilities of the Borrowers remain unpaid;

     (v) the modification, waiver or amendment (whether material or otherwise) of the terms of the Loan Agreement, or the Notes or any other Loan Document;

     (vi) the taking or the failure to take any action referred to in, or the exercise or failure to exercise any discretion vested in the Agent or any Lender by, the Loan Agreement, the Notes or any other Loan Document;

     (vii) the illegality, invalidity, unenforceability or irregularity of the Loan Agreement, the Notes or any other Loan Document;

     (viii) any failure, omission, delay or lack of diligence on the part of the Agent or any Lender in the enforcement, assertion or exercise of any right, power or remedy conferred on the Agent or any Lender under any Loan Document, or the inability of the Agent or any Lender to enforce any provision of any Loan Document for any reason, or any other act or omission on the part of the Agent or any Lender, including, without limitation, the failure by the Agent or any Lender to perfect or protect any Lien granted to the Agent and Lenders under any Security Document, the release or substitution of any collateral by the Agent and/or Lenders, the failure by the Agent and/or Lenders to commence and prosecute any action to collect any Guaranteed Obligations or the failure to enforce or collect any judgment obtained by the Agent and/or Lenders;

     (ix) the dissolution, sale or other disposition of all or substantially all of the assets of the Borrowers, liquidation, marshalling of assets and liabilities, receivership, insolvency, assignment for the benefit of creditors, bankruptcy, reorganization, arrangement, adjustment, composition or other similar proceedings affecting the Borrowers; or

     (x) to the extent permitted by law, any event or, action or circumstance that would, in, the absence of this clause, result in the release or discharge of the Guarantor from the performance or observance of any obligation, covenant or agreement contained in this Guaranty, it being the intent of the parties to this

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Guaranty that the obligations of the Guarantor hereunder shall be absolute and unconditional under any circumstances.

          (b) The Guarantor hereby agrees that the Agent and/or the Lenders may at any time, or from time to time, in the Agent’s or such Lender’s discretion, (i) renew and/or extend or accelerate the time of payment and/or the manner, place or terms of payment of all of the Guaranteed Obligations, or any part or parts thereof or any renewal or renewals thereof or the obligations of any other guarantor of the Guaranteed Obligations, (ii) release or surrender any other guaranty of the Guaranteed Obligations, (iii) exchange, release and/or surrender all or any of the collateral security, or any part or parts thereof, that is now or may hereafter be held by or on behalf of the Agent in connection with this Guaranty or any or all of the Guaranteed Obligations, (iv) sell and/or purchase any or all such collateral at public or private sale or at any broker’s board and, after deducting all reasonable costs and expenses of every kind for collection, sale or delivery, apply the proceeds of any such sale or sales upon any of the Guaranteed Obligations, (v) settle or compromise any and all of the Guaranteed Obligations with the Borrowers and/or any other Person liable thereon and/or subordinate the payment of same or any part thereof to the payment of any other debts or claims that may at any time be due or owing to the Agent and/or any other Person; all in such manner and upon such terms as the Agent may see fit, and without notice to or further assent from the Guarantor, who hereby agrees to be and remain bound upon this Guaranty in accordance with the terms hereof, irrespective of the existence, value or condition of any collateral and notwithstanding any such change, exchange, settlement, compromise, surrender, release, sale, application, renewal, extension or any other action hereinbefore mentioned.

          1.3 Waiver of Notice, Etc., Exhaustion of Remedies. The Guarantor waives all notices of the creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice or proof of reliance by the Agent upon this Guaranty or acceptance of this Guaranty. The Guaranteed Obligations shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Guaranty, and all dealings between the Borrowers or the Guarantor and the Agent or any Lender shall likewise be conclusively presumed to have been had or consummated in reliance upon this Guaranty. The Guarantor also waives diligence, presentment, demand for payment, protest and notice of nonpayment or dishonor and all other notices and demands whatsoever relating to the Guaranteed Obligations that are not specifically required by this Guaranty or the requirement that the Agent and/or any Lender file a claim with a court in the event of the bankruptcy of the Borrowers or that the Agent and/or any Lender proceed first against the Borrowers or any other guarantor of, or collateral for, the Guaranteed Obligations or otherwise exhaust any right, power or remedy under the Loan Agreement or any other Loan Document before proceeding hereunder.

          1.4 Waiver of Defenses. No set-off, counterclaim, reduction or diminution of an obligation or any defense of any kind or nature (other than payment and performance of the Guaranteed Obligations) that the Borrowers may have or assert against the Agent and/or any Lender shall be available hereunder to the Guarantor against the Agent and/or any Lender.

          1.5 Reinstatement. The Guarantor further agrees that if at any time all or any part of any payment of the Guaranteed Obligations received by the Agent and/or any Lender is or must be rescinded or returned to the Borrowers for any reason whatsoever (including, without

- 17 -

limitation, the insolvency, bankruptcy or reorganization of the Borrowers), this Guaranty shall be reinstated with respect to such payment so rescinded or returned as though such payment had never been received by the Agent and/or any Lender and notwithstanding the occurrence of the Release Date prior to the rescission or return of such payment.

          1.6 No Subrogation. No payment by the Guarantor pursuant to any provision of this Guaranty or other satisfaction of any of the Guarantor’s liabilities under this Guaranty shall entitle the Guarantor, by subrogation or otherwise, to any rights or remedies of the Agent and/or any Lender against the Borrowers, except after the Release Date.

          1.7 Stay of Acceleration. If demand for, or acceleration of the time for, payment by the Borrowers of any Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of the Borrowers, all such indebtedness otherwise subject to demand for payment or acceleration under the terms of the Loan Agreement shall nonetheless be payable by the Guarantor hereunder forthwith on demand by the Agent.

          1.8 Subordination. The Guarantor agrees that (i) all existing and future indebtedness of the Borrowers to the Guarantor shall be subject and subordinate to the obligations and indebtedness of the Borrowers to the Agent and Lenders under the Loan Agreement and the other Loan Documents and (ii) so long as there exists any Event of Default under the Loan Agreement, unless the Agent and Lenders otherwise agree, the Borrowers shall not be required to pay to the Guarantor any indebtedness owing by the Borrowers to the Guarantor until the Release Date.

          1.9 Continuing Guaranty. This is a continuing guaranty of the Guaranteed Obligations, and this Guaranty shall remain in full force and effect and be binding upon the Guarantor and its successors and assigns so long as the Lenders have an obligation to make Loans under the Loan Agreement and until the Release Date.

          Section 2. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents and warrants that:

          2.1 Due Organization. The Guarantor (a) is a duly organized and validly existing [corporation] [limited liability company] [limited partnership] in good standing under the laws of the State of [_________________], and (b) has the power and authority to own its property and assets and to transact the business in which it is engaged in each jurisdiction where the ownership, leasing or operation of property or the conduct of its business requires such qualification, except for such qualifications the lack of which has not had and is not reasonably likely to have a material adverse effect on the business or condition (financial or otherwise) of the Guarantor (a “Material Adverse Effect”).

          2.2 Valid Execution: Binding Effect. The Guarantor has the [corporate] [limited liability company] [limited partnership] power to execute, deliver and perform this Guaranty and each of the other Loan Documents to which it is a party and has taken all necessary [corporate] [limited liability company] [limited partnership] action to authorize the execution, delivery and performance by it of this Guaranty. The Guarantor has duly executed and delivered this Guaranty and each of the other Loan Documents to which it is a party, and this Guaranty

- 18 -

constitutes its legal, valid and binding obligation enforceable in accordance with its terms, subject, as to enforceability, to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

          2.3 No Violation. Neither the execution, delivery or performance by the Guarantor of this Guaranty or of any other Loan Documents to which it is a party, nor compliance by it with the terms and provisions hereof or thereof, (a) will violate any provision of the charter documents or organizational documents of the Guarantor or (b) except to the extent the same is not known to a responsible officer of the Guarantor and would not have a Material Adverse Effect, (i) will contravene any provision of any law, statute, rule or regulation or any order, writ, injunction or decree of any court or governmental instrumentality or (ii) will conflict or be inconsistent with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien upon any of the property or assets of the Guarantor pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement, loan agreement or any other agreement, contract or instrument to which the Guarantor is a party or by which it or any of its property or assets is bound or to which it may be subject.

          2.4 No Consents. No order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with (other than as have been obtained or made prior to the date hereof, or if not obtained, would not have a Material Adverse Effect), (a) the execution, delivery and performance by the Guarantor of this Guaranty and each of the other Loan Documents to which it is a party or (b) the legality, validity, binding effect or enforceability of this Guaranty or any of the other Loan Documents to which the Guarantor is a party.

          2.5 Ranking of Obligations. The obligations of the Guarantor to make payments as provided in this Guaranty rank, as to right of payment, at least equally with the general unsecured debt of the Guarantor.

          2.6 Restrictive Agreements. As of the date hereof, the Guarantor is not a party to any agreement, and is not subject to any [corporate] [limited liability company] [limited partnership] restriction, which adversely affects its ability to execute, deliver, and perform this Guaranty or the Loan Documents to which it is a party and repay the Guaranteed Obligations guarantied by it or which is reasonably likely to have a Material Adverse Effect.

          Section 3. DEFAULT AND REMEDIES.

          3.1 Enforcement. The Agent shall have the right, power and authority to do all things it deems necessary or advisable to enforce the provisions of this Guaranty in the event of a default in payment of the Guaranteed Obligations when and as the same shall become due after expiration of any grace period expressly granted in the Loan Documents. The Agent may institute or appear in such judicial proceedings as the Agent shall deem most effective to protect and enforce any of the Agent’s rights, whether for the specific enforcement of any covenant or

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agreement in this Guaranty or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

          3.2 Cumulative Remedies. No remedy conferred upon or reserved to the Agent or any Lender herein is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under the Guaranty, any other Loan Document or any other document or instrument or provided by law.

          3.3 Separate Causes of Action; Exhaustion of Remedies. Each and every default in payment of the Guaranteed Obligations shall give rise to a separate cause of action hereunder, and separate suits may be brought hereunder as each cause of action arises. In the event of such a default, the Agent shall have the right to enforce this Guaranty, first and directly against the Guarantor without proceeding against the Borrowers or against any other guarantor under any other guaranty covering the Guaranteed Obligations, against any other Person or against any security for the Guaranteed Obligations or exhausting any other remedies which it may have and without resorting to any security held by it. All payments by the Guarantor under this Guaranty shall be made on the same basis as payments by the Borrowers under Paragraph 2.10 of the Loan Agreement or as otherwise specified by the Agent by a notice in writing to the Guarantor.

          3.4 Costs, Expenses and Fees. The Guarantor hereby agrees to pay all reasonable costs, expenses and fees, and all reasonable attorneys’ fees, which may be incurred by the Agent in preparing this Guaranty or any amendments, waivers or consents with respect hereto or incurred by the Agent and Lenders in enforcing or attempting to enforce this Guaranty or in protecting the rights of the Agent and Lenders under this Guaranty following any default on the part of the Guarantor hereunder, whether the same shall be enforced by suit or otherwise. The covenants and agreements contained in this Section 3.4 shall survive the payment of the Guaranteed Obligations and the Guarantor’s obligations hereunder.

          Section 4. MISCELLANEOUS.

          4.1 Notices. (a) Any notice, request, direction, demand or communication hereunder shall be given to or made upon the Guarantor or the Agent in writing (including facsimile transmission) and mailed or delivered in accordance with subsection (b) of this Section to each such party at the address set forth in subsection (c) of this Section, or to such other address as may be designated by any such party by a written notice delivered to the other such parties in accordance with this Section 4.1.

          (b) All notices given under this Section 4.1 shall be effective only (i) if given by facsimile transmission, when transmitted to the applicable facsimile number, if confirmation of receipt is received (except that, if not given during normal business hours for the recipient, such notice shall be deemed to have been given at the opening of business on the next business day for the recipient); (ii) if given by certified or registered U.S. mail, upon receipt, with first-class postage pre-paid, addressed to the applicable address; or (iii) if given by personal delivery, when duly delivered to the notice address with receipt acknowledged. Any written notice, request or other communication that is not sent in conformity with this Section 4.1 shall

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nevertheless be effective on the date actually received by the noticed party. Any notice received by Regional shall be deemed received by all Borrowers.

          (c) Notices to the Agent shall be addressed to it at Bank of America, N.A., 335 Madison Avenue, New York, New York 10017. Notices to the Guarantor shall be addressed to it at ____________________, __________, ______________ ____.

          4.2 Waivers and Amendments. No failure on the part of the Agent or any Lender to exercise, and no delay in exercising, and no course of dealing with respect to, any right, power or remedy hereunder shall operate as a waiver thereof or of any default hereunder or any Event of Default, nor shall any single or partial exercise by the Agent or any Lender of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy of the Agent or any Lender. No modification or waiver of any provision of this Guaranty nor consent to any departure herefrom shall in any event be effective unless the same shall be in writing and signed by the Agent or any Lender, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on the Borrowers or the Guarantor in any case shall, of itself, entitle the Guarantor to any other or further notice or demand in similar or other circumstances. If notice, whether before or after an Event of Default has occurred, is required by law to be given by the Agent or any Lender to the Guarantor, the Guarantor agrees that ten (10) days’ notice given in the manner provided in Section 4.1 hereof shall be reasonable notice.

          4.3 Successors and Assigns. (a) This Guaranty shall be binding upon the Guarantor and its successors, transfers, administrators, legal representatives and assigns, and shall inure to the benefit of, and be enforceable by, the Agent and Lenders and their successors, transfers and assigns. Without limiting the generality of the foregoing, any Lender may assign or otherwise transfer its rights and obligations under the Loan Agreement to any other Person or entity and such Person or entity shall thereupon become vested with all the benefits in respect thereof granted to such Lender, herein or otherwise, all as provided in, and to the extent set forth in, the Loan Agreement.

          (b) In connection with any assignment permitted by the Loan Agreement, the Agent may assign all or any portion of its rights and powers under this Guaranty to the extent permitted in the Loan Agreement and, in the event of such assignment, the assignee of such rights and powers, to the extent of such assignment, shall have the same rights and remedies as the Agent. The Guarantor may not assign its rights or obligations hereunder without the prior written consent of the Agent.

          4.4 Set-Off. In addition to any rights now or hereafter granted under applicable law and not by way of limitation of such rights, upon the occurrence and during the continuance of an Event of Default, the Agent and each Lender is hereby authorized at any time or from time to time, without notice to the Guarantor or to any other Person (any such notice being hereby expressly waived) to set off and to appropriate and apply any and all deposits (general or special) and any other indebtedness at any time held or owing by the Agent and each Lender to or for the credit or the account of the Guarantor against and on account of the Guaranteed Obligations. The Agent and each Lender agrees promptly to notify the Guarantor after any such set-off and application made by the Agent or such Lender, provided that the failure to give such notice shall not affect the validity of such set- off and application.

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          4.5 Transactions Permitted under the Loan Documents. Nothing contained in this Agreement shall in any manner prohibit or restrict the Guarantor from consummating any transaction, entering into any agreement or otherwise taking any other action expressly permitted under the Loan Agreement.

          4.6 Termination. Subject to Section 1.5 hereof, this Guaranty and the obligations of the parties hereunder shall terminate on the date the Loan Agreement is terminated and the Obligations have been fully repaid, unless otherwise expressly provided for herein.

          4.7 Credit Agreement Prevails. To the extent there are express provisions of the Loan Agreement which conflict with the provisions hereof, the provisions contained in the Loan Agreement shall prevail.

          4.8 SUBMISSION TO JURISDICTION. PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES AMONG ANY GUARANTOR, AGENT AND LENDERS, PERTAINING TO THIS GUARANTY. EACH GUARANTOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS.

          4.9 WAIVER OF JURY TRIAL. THE GUARANTOR AND THE AGENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE (TO THE FULLEST EXTENT PERMITTED BY LAW) TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO OR CONNECTED WITH THIS GUARANTY, THE GUARANTEED OBLIGATIONS OR ANY DOCUMENTS OR INSTRUMENTS DELIVERED PURSUANT HERETO OR THERETO OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH. THE GUARANTOR AND THE AGENT CONFIRM THAT THE FOREGOING WAIVERS ARE INFORMED AND FREELY GIVEN.

          4.10 GOVERNING LAW. PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICT OF LAWS RULES.

          4.11 Acknowledgments by Guarantor. The Guarantor acknowledges and confirms to the Agent that the Guarantor has not been induced to execute and deliver this Guaranty as a result of, and is not relying upon, any representations, warranties, agreements or conditions, whether express or implied or written or oral, by the Agent or any Lender, the Borrowers or any other Person. Without limiting the generality of the foregoing or any other provision of this Guaranty, insofar as the Guarantor is concerned:

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          (a) the Agent and Lenders are not obligated to give or continue any financial accommodations to the Borrowers (except to the extent required to do so under the Loan Agreement) or any other Person, including (without limitation) pursuant to this Guaranty, or to change or extend the time of payment of, or renew or alter, any liability of the Borrowers or of any other Person, any security therefor or any liability incurred directly or indirectly in respect thereof;

          (b) no Person, including (without limitation) the Agent or any Lender and the Borrowers, has made any representations to the Guarantor as to any matter which may affect or in any way relate to the financial condition, relationships or transactions of the Borrowers or any other Person, including (without limitation) the business, assets, liabilities, type or value of any security therefor, financial condition, management or control of the Borrowers or any other Person (except that, to the extent required to do so under the Loan Agreement, the Agent and Lenders have agreed to make Loans to the Borrowers and issue Letters of Credit for the account of Borrowers);

          (c) the Agent and Lenders are not obligated to notify the Guarantor or any other Person of any change in the business, assets, liabilities, type or value of any security therefor, financial condition, management or control of the Borrowers or any other Person, and none of such changes shall release or otherwise impair any of the rights of the Agent and Lenders against the Guarantor; and

          (d) no failure by the Agent and Lenders to obtain, perfect, protect, insure or realize upon any security for any of the liabilities of the Borrowers or of any other Person or no other act or failure to act by the Agent and Lenders shall release or otherwise impair any of the obligations of the Guarantor hereunder.

          4.12 Severability. If any part of this Guaranty is contrary to, prohibited by or deemed invalid under any applicable law of any jurisdiction, such provision shall, as to such jurisdiction, be inapplicable and deemed omitted to the extent so contrary, prohibited or invalid, without invalidating the remainder hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

          4. 13 Section headings. Section Headings used in this Guaranty are for convenience only and shall not affect the construction of this Guaranty.

          4. 14. Counterparts. This Guaranty may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Guaranty by facsimile or electronic mail shall be effective as delivery of a manually executed counterpart of this Guaranty.

[ INTENTIONALLY LEFT BLANK ]

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          IN WITNESS WHEREOF, the Guarantor has duly executed this Guaranty as of the date first above written.

[INSERT NAME OF GUARANTOR]
By:
	Name:
	Title:

Accepted and Agreed to:

BANK OF AMERICA, N.A., as Agent
By:
	Name:
	Title:

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Table of Contents

Section	Page No.
SECTION ONE — DEFINITIONS; INTERPRETATION OF THIS AGREEMENT		2
1.1 Terms Defined		2
1.2 Interpretive Provisions		23
SECTION TWO — LOANS AND LETTERS OF CREDIT AND TERMS OF PAYMENT		24
2.1 Total Facility		24
2.2 Revolving Loans		24
2.3 Books and Records; Monthly Statements		30
2.4 Apportionment Application and Reversal of Payments		31
2.5 Interest		32
2.6 Conversion and Continuation Elections		32
2.7 Maximum Interest Rate		34
2.8 Unused Line Fee		34
2.9 Payment of Revolving Loans		34
2.10 Payments by Borrowers		34
2.11 Taxes		35
2.12 Illegality		36
2.13 Increased Costs and Reduction of Return		37
2.14 Funding Losses		37
2.15 Inability to Determine Rates		37
2.16 Certificates of Lenders		38
2.17 Survival		38
2.18 Letters of Credit		38
2.19 Letter of Credit Fee		43
2.20 Bank Products		43
2.21 Loan Administration		44
SECTION THREE — TERM		44
3.1 Term of Agreement and Loan Repayment		44
3.2 Termination of Security Interests		45
SECTION FOUR — SECURITY INTEREST IN COLLATERAL		45
4.1 Creation of Security Interest in Collateral		45
4.2 Borrower’s Representations and Warranties Regarding Collateral		45
4.3 Financing Statements		46
4.4 Location of Collateral		46

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Section	Page No.
4.5 Protection of Collateral; Reimbursement		46
4.6 Release of Collateral		47
4.7 Assigned Contracts		47
SECTION FIVE — RECORDS AND SERVICING OF CONTRACTS		48
5.1 Records of Contracts		48
5.2 Servicing of Contracts		48
SECTION SIX — CONDITIONS PRECEDENT TO ADVANCES		49
6.1 Conditions Precedent to Initial Loans		49
6.2 Conditions to all Advances and Letters of Credit		50
SECTION SEVEN — REPRESENTATIONS, WARRANTIES AND COVENANTS		51
7.1 Representations and Warranties Reaffirmed		51
7.2 Warranties and Representations Regarding Contracts		51
7.3 Warranties and Representations Regarding Collateral Generally		51
7.4 Solvent Financial Condition		52
7.5 Organization and Authority		52
7.6 Financial Statements		52
7.7 Full Disclosure		52
7.8 Pending Litigation		53
7.9 Titles to Properties		53
7.10 Licenses		53
7.11 Transaction is Legal and Authorized; Restrictive Agreements		53
7.12 Taxes		53
7.13 Compliance with Law		53
7.14 Borrowers’ Office and Names		54
7.15 Credit Guidelines		54
7.16 Subsidiaries		54
7.17 No Default		54
7.18 Use of Proceeds		54
7.19 Bank Accounts		54
7.20 Proper Contract Documentation		55
7.21 Credit File		55
7.22 Assignments of Contracts and Security Documents.		55
7.23 Pledging of Contracts		55
7.24 Accurate Records Regarding Collateral		55
7.25 Reserved		55
7.26 ERISA		55
7.27 Labor Relations		55
7.28 Reincorporation of Regional		56
SECTION EIGHT — FINANCIAL AND OTHER COVENANTS		56
8.1 Payment of Taxes and Claims		56
8.2 Maintenance of Properties and Existence		56
8.3 Guaranties		56
8.4 Borrowing Base Ratio		57

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Section	Page No.
8.5 Business Conducted		57
8.6 Debt		57
8.7 Further Assurances		58
8.8 Subsidiaries		58
8.9 Interest Coverage Ratio		58
8.10 Loss Reserve		58
8.11 Charge-Off Policy		59
8.12 Prohibition on Distributions; Equity Capital Changes		59
8.13 Limitation on Bulk Purchases		60
8.14 Transactions with Affiliates		61
8.15 Accounting Changes		62
8.16 Bank Accounts		62
8.17 Plans		62
8.18 IPO; Related Transactions		62
8.19 Mergers, Consolidations or Acquisitions		62
8.20 Use of Loan Proceeds		63
SECTION NINE — INFORMATION AS TO BORROWER		63
9.1 Financial Statements		63
9.2 Inspection		64
SECTION TEN — EVENTS OF DEFAULT; REMEDIES		65
10.1 Events of Default		65
10.2 Default Remedies		67
SECTION ELEVEN — AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS		68
11.1 Amendments and Waivers		68
11.2 Assignments; Participations		69
SECTION TWELVE — THE AGENT		72
12.1 Appointment and Authorization		72
12.2 Delegation of Duties		72
12.3 Liability of Agent		72
12.4 Reliance by Agent		73
12.5 Notice of Default		73
12.6 Indemnification		74
12.7 Agent in Individual Capacity		74
12.8 Successor Agent		74
12.9 Withholding Tax		74
12.10 Collateral Matters		75
12.11 Restrictions on Actions by Lenders; Sharing of Payments		76
12.12 Agency for Perfection		76
12.13 Payments by Agent to Lenders		77
12.14 Concerning the Collateral and the Related Loan Documents		77
12.15 Field Audit and Examination Reports; Disclaimer by Lenders		77
12.16 Relation Among Lenders		77

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Section	Page No.
SECTION THIRTEEN — GENERAL		78
13.1 Expenses		78
13.2 Invalidated Payments		78
13.3 Application of Code to Agreement		78
13.4 Parties, Successors and Assigns		79
13.5 Notices and Communications		79
13.6 Accounting Principles		79
13.7 Total Agreement; References		80
13.8 Governing Law		80
13.9 Survival		80
13.10 Power of Attorney		80
13.11 Litigation		81
13.12 Severability		81
13.13 Jury Trial Waiver		81
13.14 Indemnity of Agent and Lenders by Borrower		82
13.15 Limitation of Liability		82
13.16 Right of Setoff		83
13.17 Joint and Several Liability		83
13.18 Counterparts		85
13.19 Headings		85
13.20 No Waivers; Cumulative Remedies		85
13.21 Other Security and Guarantees		85
13.22 NO ORAL AGREEMENTS		86
13.23 Patriot Act Notice		86
13.24 Replacement of Lenders		86

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EXHIBITS AND SCHEDULES

EXHIBIT “A” — FORM OF NOTICE OF BORROWING

EXHIBIT “B” — FORM OF NOTICE OF CONTINUATION/CONVERSION

EXHIBIT “C” — FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

EXHIBIT “D” — FORM OF GUARANTY

SCHEDULE 4.4 — LOCATIONS OF BOOKS AND RECORDS AND COLLATERAL

SCHEDULE 7.6 — GAAP EXCEPTIONS

SCHEDULE 7.9 — PERMITTED LIENS

SCHEDULE 7.10 — LICENSES

SCHEDULE 7.13 — COMPLIANCE WITH LAWS

SCHEDULE 7.16 — SUBSIDIARIES

SCHEDULE 7.19 — BANK ACCOUNTS

SCHEDULE 8.3 — GUARANTIES

SCHEDULE 8.6 — DEBT

1

ADDENDUM TO SCHEDULE 4.4
LOCATION OF COLLATERAL
AS OF JANUARY 13, 2012

815 West Greenwood Street, Suite 3	Abbeville	SC	29620
314 Richland Avenue West	Aiken	SC	29801
8144 U.S. Highway 431	Albertville	AL	35950
2705 North Main Street, Suite C	Anderson	SC	29621
2705 North Main Street, Suite G	Anderson	SC	29621
840 Secretary Drive	Arlington	TX	76015
1337 East Dixie Drive, Suite C	Asheboro	NC	27203
473 Hendersonville Road, Suite A	Asheville	NC	28803
2140 E. University Drive, Suite E	Auburn	AL	36830
6615 Airport Blvd.	Austin	TX	78752
719 West William Cannon, Suite 112	Austin	TX	78745
197 Main Street	Barnwell	SC	29812
112D West Church Street	Batesburg	SC	29006
2303 Boundary St., Suite 3	Beaufort	SC	29902
6240 Phelan Blvd.	Beaumont	TX	77706
218 City Square	Belton	SC	29627
145 Hwy 15 & 401 Bypass, Suite 7	Bennettsville	SC	29512
1930 Edwards Lake Road, Suite 120	Birmingham	AL	35235
3906 Highway 9, Suite C	Boiling Springs	SC	29316
1135 Volunteer Parkway, Suite 1	Bristol	TN	37620
857 East Washington Street, Suite D	Brownsville	TX	78520
1710 C South Texas Avenue, Suite 101	Bryan	TX	77802
2140 South Church Street	Burlington	NC	27216
1047 Broad Street	Camden	SC	29020
528 Knox Abbott Drive	Cayce	SC	29033
567 King Street	Charleston	SC	29403
1300 Savannah Highway, Suite 12	Charleston	SC	29407
4401 East Independence Blvd., Suite 102	Charlotte	NC	28205
9123 Monroe Road, Suite 100	Charlotte	NC	28270
5210 North Tryon Street, Unit B	Charlotte	NC	28213
6407 South Blvd., Suite J	Charlotte	NC	28217
5716 Ringgold Road, Unit 106	Chattanooga	TN	37412
233 Second Street	Cheraw	SC	29520
891 Keith Street, Suite 6	Cleveland	TN	37311
6729 B Two Notch Road	Columbia	SC	29223
6729 L Two Notch Road	Columbia	SC	29223
7509 Garners Ferry Road, Suite F	Columbia	SC	29209

810 Dutch Square Blvd., Suite 102	Columbia	SC	29210
136 Bear Creek Pike, Suite E	Columbia	TN	38401
3401 W. Davis Street, Suite A1	Conroe	TX	77304
302 Main Street	Conway	SC	29526
516 S. Willow Avenue	Cookeville	TN	38501
4918 Ayers Road, Suite 136	Corpus Christi	TX	78415
126 The Crossings	Crossville	TN	38555
1710 2nd Avenue SW, Suite 5	Cullman	AL	35055
200 Able Drive, Suite 12	Dayton	TN	37321
2699 Sandlin Road, Suite B-2	Decatur	AL	35601
2400 Veterans Blvd., Suite 10	Del Rio	TX	78840
121 Henslee Drive, Suite H	Dickson	TN	37055
222 East Main Street	Dillon	SC	29536
3074 Ross Clark Circle, Suite 8	Dothan	AL	36301
5410 NC Highway 55, Suite R	Durham	NC	27713
220 Jefferson Street	Eagle Pass	TX	78852
6932 Calhoun Memorial Highway, Suite G	Easley	SC	29640
710 South Pendleton Street	Easley	SC	29640
229 Apple Square Plaza	Edgefield	SC	29824
613 East University Drive	Edinburg	TX	78539
500 N. Oregon, Suite E	El Paso	TX	79901
8720 Alameda Aveunue, Suite A	El Paso	TX	79907
2801 Mall Road, Suite 9	Florence	AL	35630
355 West Evans Street	Florence	SC	29501
1222 West Evans Street	Florence	SC	29501
1518 Pennsylvania Avenue	Fort Worth	TX	76104
2725 NE 28th Street, Suite 130	Fort Worth	TX	76111
449 George Wallace Drive	Gadsden	AL	35903
515 North Limestone Street	Gaffney	SC	29340
3115 South 1st, Suite 300	Garland	TX	75041
2568 West Franklin Blvd.	Gastonia	NC	28052
808 East Franklin Blvd.	Gastonia	NC	28054
1113 North Fraser Street	Georgetown	SC	29440
134 Saint James Avenue, Suite 6	Goose Creek	SC	29445
2080 N. Highway 360, Suite 140	Grand Prairie	TX	75050
817 West Pioneer Parkway, Suite 156	Grand Prairie	TX	75051
2565 East Andrew Johnson Highway	Greeneville	TN	37745
3733 B Farmington Drive	Greensboro	NC	27407
2403 Battleground Avenue, Suite 6	Greensboro	NC	27408
1414 E Washington St., Suite G	Greenville	SC	29607
1414 E Washington St., Suite H	Greenville	SC	29607

2301 Wade Hampton Blvd., Suite 3	Greenville	SC	29615
718A Montague Avenue	Greenwood	SC	29649
726A Montague Avenue	Greenwood	SC	29649
1309 B West Poinsett Street	Greer	SC	29650
129 Lee Avenue	Hampton	SC	29924
318 East Jackson Street	Harlingen	TX	78550
112 East Carolina Avenue	Hartsville	SC	29550
475 N. Main Street, Suite D	Hemingway	SC	29554
512 South Main Street	Hendersonville	NC	28792
2442 B Highway 70 Southeast	Hickory	NC	28602
2108 North Centennial Street, Suite 114	High Point	NC	27265
3659 Lorna Road, Suite 125	Hoover	AL	35216
1804 Wirt Road	Houston	TX	77055
5517 Airline Drive, Suite E	Houston	TX	77076
459 Uvalde Road	Houston	TX	77015
6003 Bellaire Blvd., Suite G	Houston	TX	77081
7100 Regency Square Blvd., Suite 248	Houston	TX	77036
4925 University Drive, Suite 110	Huntsville	AL	35816
1918 North Story Road	Irving	TX	75061
319 Vann Drive, Suite B	Jackson	TN	38305
3014 Bristol Highway, Suite 3	Johnson City	TN	37601
3379 Cloverleaf Parkway	Kannapolis	NC	28083
421 West Stone Drive, Suite 3	Kingsport	TN	37660
200 West Mill Street	Kingstree	SC	29556
218 East Kleberg Avenue	Kingsville	TX	78363
7118 Maynardville Highway	Knoxville	TN	37918
1645 Downtown West Blvd., Unit 11	Knoxville	TN	37919
109 East Main St.	Lake City	SC	29560
226 South Main Street	Lancaster	SC	29720
502 West Calton Road, Suite 109	Laredo	TX	78041
1104 B North Meadow	Laredo	TX	78040
507 N. Harper Street, Suite D	Laurens	SC	29360
224 West Main Street, Suite D	Lebanon	TN	37087
5175 Sunset Blvd., Suite 4	Lexington	SC	29072
110 East Tyler Street	Longview	TX	75601
348 North Highway 701, Unit 1	Loris	SC	29569
2021 Gallatin Pike North, Suite 240	Madison	TN	37115
103 South Brooks Street	Manning	SC	29102
1107 East Godbold Street	Marion	SC	29571
509 S. Bicentennial Blvd.	McAllen	TX	78501
2708 H East Griffin Parkway	Mission	TX	78572

104 Bi-Lo Way, Suite A2	Moncks Corner	SC	29461
3306 D Highway 74 West	Monroe	NC	28110
6144 Atlanta Highway	Montgomery	AL	36117
1631 E. Andrew Johnson Highway	Morristown	TN	37814
1035 Johnnie Dodds Blvd., Suite C-7	Mt. Pleasant	SC	29464
1636 Memorial Blvd.	Murfreesboro	TN	37129
605 Broadway Street	Myrtle Beach	SC	29577
1337 Wilson Road	Newberry	SC	29108
404 E. Martintown Road, Suite 4	North Augusta	SC	29841
1922 Remount Road	North Charleston	SC	29406
1924 Remount Road	North Charleston	SC	29406
867 U.S. Highway 17 South	North Myrtle Beach	SC	29582
7141 S. Western Avenue, Suite C	Oklahoma City	OK	73139
642 John C. Calhoun Drive	Orangeburg	SC	29115
1291 John C. Calhoun Drive	Orangeburg	SC	29115
1225 Snow Street, Suite 4	Oxford	AL	36203
3910 Fairmont Parkway, Suite D	Pasadena	TX	77504
246 Interstate Commercial Park Loop	Prattville	AL	36066
4011 Capital Blvd., Suite 123	Raleigh	NC	27604
4761 B East Highway 83	Rio Grande City	TX	78582
592 North Anderson Road	Rock Hill	SC	29730
704 C East Broad Avenue	Rockingham	NC	28379
811 South Jake Alexander Blvd.	Salisbury	NC	28147
1121 SW Military Drive, Suite 101	San Antonio	TX	78221
14145 Nacogdoches Road, Suite 1	San Antonio	TX	78247
3221 Wurzbach Road	San Antonio	TX	78238
3655 Fredericksburg Road, Suite 119	San Antonio	TX	78201
4525 Rigsby Avenue, Suite 106	San Antonio	TX	78222
4502 Centerview Drive, Suite 116	San Antonio	TX	78228
206 B West San Antonio Street	San Marcos	TX	78666
211 Oconee Square Drive	Seneca	SC	29678
195 A South Converse Street	Spartanburg	SC	29306
110 Garner Road, Suite 10	Spartanburg	SC	29303
12220 Murphy Road, Suite H	Stafford	TX	77477
230 Signal Hill Drive	Statesville	NC	28625
115 East Richardson Avenue	Summerville	SC	29483
251 Broad Street	Sumter	SC	29150
708 Bultman Drive	Sumter	SC	29150
2314 C West Adams Avenue	Temple	TX	76504
2001 Skyland Blvd. East, Suite C-1	Tuscaloosa	AL	35405
2523 East 5th Street	Tyler	TX	75701

410 North Duncan Bypass, Suite D	Union	SC	29379
2912 North Laurent Street	Victoria	TX	77901
1615 North Valley Mills Drive	Waco	TX	76710
110A North Memorial Avenue	Walterboro	SC	29488
1025 North Texas Blvd., Suite 17	Weslaco	TX	78596
622 Twelfth Street	West Columbia	SC	29169
420 Eastwood Road, Suite 101	Wilmington	NC	28403
153 North Congress Street	Winnsboro	SC	29180
3193 D Peters Creek Drive	Winston Salem	NC	27127
4964 Martin View Lane	Winston Salem	NC	27104
902 North Main Street	Woodruff	SC	29388
710 East Liberty Street, Suite 102	York	SC	29745

SCHEDULE 7.6

GAAP EXCEPTIONS

None

SCHEDULE 7.9

PERMITTED LIENS

Liens created by the following documents and any financing statements now existing or hereafter filed related thereto:

Business Loan Agreement dated on or about January 9, 2012, made by Regional with Wells Fargo Bank, National Association (“Wells Fargo”), allowing the company to borrow up to $1,500,000 on a revolving basis. As an inducement, Wells Fargo required the execution of a Promissory Note by Regional in favor of Wells Fargo (as identified in Schedule 8.6), related to certain real and personal property (as described therein) located at 507 and 509 W. Butler Road, Mauldin, South Carolina, as the same has been amended, modified or extended.

SCHEDULE 7.10

LICENSES

None.

SCHEDULE 7.13

COMPLIANCE WITH LAWS

None.

SCHEDULE 7.16

SUBSIDIARIES

Each of the entities listed below is a direct or indirect wholly owned subsidiary of Regional Management Corp.

Regional Finance Corporation of Alabama
Regional Finance Corporation of Georgia
Regional Finance Corporation of North Carolina
Regional Finance Corporation of South Carolina
Regional Finance Corporation of Tennessee
Regional Finance Corporation of Texas
Upstate Motor Company
Credit Recovery Associates
Regional Finance Company of Oklahoma, LLC (Wholly owned by Regional Finance Corporation of North Carolina)
RMC Reinsurance, LTD

SCHEDULE 7.19

BANK ACCOUNTS

Bank Name	Account Number		City	State	Purpose	Company Name
BB & T		0005121078874	Winston Salem	NC	Depository	Regional Management Corp
BB & T		115665804	Winston Salem	NC	Depository	Regional Finance Corp of TN
Compass Bank		51115751	Birmingham	AL	Depository	Regional Finance Corp of TX
Compass Bank		0270014337	Birmingham	AL	Depository	Regional Finance Corp of TX
First Bank		3083039	Dickson	TN	Depository	Regional Finance Corp of TN
First Citizens/Williamsburg 1st National		079021391201	Columbia	SC	Depository	Regional Finance of SC
First Citizens /Williamsburg 1st National		620513879	Columbia	SC	Depository	Regional Management Corp
First National		40802761	Edinburgh	TX	Depository	Regional Finance Corp of TX
First National Bank of TN		5153937	Livingston	TN	Depository	Regional Finance Corp of TN
First Tennessee Bank		175587910	Memphis	TN	Depository	Regional Finance Corp of TN
International Bank and Commerce		6001755817	Laredo	TX	Depository	Regional Finance Corp of TX
International Bank and Commerce		6001755736	Laredo	TX	Depository	Regional Finance Corp of TX
International Bank and Commerce		2511526972	Laredo	TX	Depository	Regional Finance Corp of TX
NBSC		021-407-440-1	Columbus	GA	Depository	Regional Finance Corp of SC
Southeast Bank		1023407	Dayton	TN	Depository	Regional Finance Corp of TN
Southside		1422340	Tyler	TX	Depository	Regional Finance Corp of TX
US Bank		151204275326	Columbia	TN	Depository	Regional Finance Corp of TN
Grand South		2006476	Greenville	SC	Reinsurance	RMC Reinsurance
Bank Of America		4427-13-5868	Charlotte	NC	Reinsurance	RMC Reinsurance
Bank Of America		3359-00-0828	Charlotte	NC	Payroll	Regional Management Corp
Bank Of America		3299-12-9611	Charlotte	NC	Loan Disbursement	Regional Management Corp
Bank Of America		4426-40-0808	Charlotte	NC	Master Depository	Regional Management Corp
Bank Of America		4426-40-5900	Charlotte	NC	Master Funding	Regional Management Corp
Wachovia / Wells Fargo		200002781131	Greenville	SC	Used to transfer all non Wachovia deposits to main SC Checking	Regional Management Corp
Wachovia / Wells Fargo		2079900-55-2661	Greenville	SC	SC Checking /Depository (main)	Regional Finance Corp of SC
Wachovia / Wells Fargo		2079900-58-7018	Greenville	SC	SC Checking / Depository (sweep account)	Regional Finance Corp of SC

Bank Name	Account Number		City	State	Purpose	Company Name
Wachovia / Wells Fargo		2079900-58-7021	Greenville	SC	SC Checking / Depository (sweep account)	Regional Finance Corp of SC
Wachovia / Wells Fargo		2079900-55-3385	Greenville	SC	RMC Checking / Depository (sweep account)	RMC Financial Services Corp
Wachovia / Wells Fargo		2079900-55-2658	Greenville	SC	TX Checking / Depository (sweep account)	Regional Finance Corp of TX
Wachovia / Wells Fargo		2079900-55-3356	Greenville	SC	NC Checking / Depository (sweep account)	Regional Finance Corp of NC
Wachovia / Wells Fargo		2079900-59-8816	Greenville	SC	TN Checking / Depository (sweep account)	Regional Finance Corp of TN
Wachovia / Wells Fargo		2079900-62-0784	Greenville	SC	AL Checking / Depository (sweep account)	Regional Finance Corp of AL
Wachovia / Wells Fargo		2079900594742	Greenville	SC	OK Checking / Depository (sweep account)	Regional Finance Corp of OK
Wachovia / Wells Fargo		2079900599637	Greenville	SC	AutoCredit Source / Depository (sweep account)	AutoCredit Source
Wachovia / Wells Fargo		2079900608191	Greenville	SC	CRA/ Depository (sweep account)	Credit Recovery Associates, Inc.
Wachovia / Wells Fargo		2000035792279	Greenville	SC	CRA/ Trust Account	Credit Recovery Associates, Inc.
Wachovia / Wells Fargo		2079900-55-3424	Greenville	SC	Corporate AP	Regional Management Corp
Wachovia / Wells Fargo		2079900-55-2771	Greenville	SC	Corporate Loan Solicitation	Regional Management Corp
Wachovia / Wells Fargo		2079900-55-2975	Greenville	SC	SC Loan Solicitation	Regional Finance Corp of SC
Wachovia / Wells Fargo		2079900-55-2962	Greenville	SC	TN Loan Solicitation	Regional Finance Corp of TN
Wachovia / Wells Fargo		2079900-55-2632	Greenville	SC	TX Loan Solicitation	Regional Finance Corp of TX
Wachovia / Wells Fargo		2079900-55-3369	Greenville	SC	NC Loan Solicitation	Regional Finance Corp of NC
Wachovia / Wells Fargo		2079900-58-5175	Greenville	SC	SC NB Loan Solicitation	Regional Finance Corp of SC
Wachovia / Wells Fargo		2079900-58-5201	Greenville	SC	TN NB Loan Solicitation	Regional Finance Corp of TN
Wachovia / Wells Fargo		2079900-58-5188	Greenville	SC	TX NB Loan Solicitation	Regional Finance Corp of TX
Wachovia / Wells Fargo		2079900-58-5191	Greenville	SC	NC NB Loan Solicitation	Regional Finance Corp of NC
Wachovia / Wells Fargo		2079900-58-5214	Greenville	SC	AL NB Loan Solicitation	Regional Finance Corp of AL

SCHEDULE 8.3

GUARANTIES

None

SCHEDULE 8.6

DEBT

Promissory Note, dated January 9, 2012, in an aggregate principal amount not to exceed $1,500,000 made by Regional payable to the order of Wells Fargo, National Association (the “Wells Fargo Revolver”), as the same has been amended, modified or supplemented.

EX-10.3.2

Exhibit 10.3.2

First Amendment and Extension to Senior Subordinated Loan and Security Agreement

     This First Amendment and Extension (this “Amendment”) dated January 18, 2012 to the Senior Subordinated Loan and Security Agreement (as hereafter defined) among REGIONAL MANAGEMENT CORP., a South Carolina corporation (“Regional”), REGIONAL FINANCE CORPORATION OF SOUTH CAROLINA, a South Carolina corporation (“RFCSC”), REGIONAL FINANCE CORPORATION OF GEORGIA, a Georgia corporation (“RFCG”), REGIONAL FINANCE CORPORATION OF TEXAS, a Texas corporation (“RFCTX”), REGIONAL FINANCE CORPORATION OF NORTH CAROLINA, a North Carolina corporation (“RFCNC”), REGIONAL FINANCE CORPORATION OF ALABAMA, an Alabama corporation (“RFCA”) and REGIONAL FINANCE CORPORATION OF TENNESSEE, a Tennessee corporation (“RFCTN”; Regional, RFCSC, RFCG, RFCTX, RFCNC, RFCA and RFCTN are herein individually referred to as a “Borrower” and collectively referred to as the “Borrowers”), whose chief executive offices are located at 509 West Butler Road, Greenville, South Carolina 29607 (with a mailing address of Post Office Box 776, Mauldin, South Carolina 29662), each of the Lenders signatory hereto, and PALLADIUM CAPITAL MANAGEMENT III, INC., as agent for the Lenders referred to below (the “Agent”) Terms used herein but not otherwise defined herein shall have the meanings provided to such terms in the Senior Subordinated Loan and Security Agreement.

     Background

     A. Borrowers, the Agent and the various lenders named therein are party to that certain Senior Subordinated Loan and Security Agreement dated August 25, 2010 (the “Senior Subordinated Loan and Security Agreement”).

     B. Borrowers have requested that the Lenders agree to extend the Maturity Date under the Senior Subordinated Loan and Security Agreement and the Lenders are willing to extend the Maturity Date on the terms and conditions set forth in this Amendment.

     Terms and Conditions to Amendment

     Now, therefore, the parties agree as follows:

     1. The Senior Subordinated Loan and Security Agreement is hereby amended as follows:

          a. The definition of Maturity Date contained in Section 1.1 is hereby amended to delete “October 25, 2013” and replace it with “March 31, 2015.”

          b. The definition of Senior Debt contained in Section 1.1 is amended by deleting each reference to “$240,000,000” therein and replacing it with “272,000,000.”

     2. This Amendment shall become effective when and only when:

          a. this Amendment shall be executed and delivered by each Borrower and each Lender;

          b. the Agent shall have received evidence acceptable to Lender of amendment of the Senior Credit Agreement and any other required amendments of the Senior Loan Documents;

          c. an amendment to the Subordination Agreement, in form and substance satisfactory to the Agent, shall be executed and delivered by the Senior Agent (as defined in the Subordination Agreement) and each Borrower;

          d. each Lender shall have received from the Borrower payment of a fee, in cash, in the amount of $15,000 in consideration of the Lenders entering into this Amendment;

          e. the Reaffirmation of Guaranty appearing in this Amendment following the Borrowers’ signature shall have been duly executed by Upstate Motor Company and delivered to the Agent; and

          f. the Agent shall have received such additional closing documents as it shall reasonably specify in connection with the transactions contemplated hereby.

     3. The Borrowers shall pay at the time this Amendment is executed (or as otherwise provided for in this Amendment) and deliver all fees, commissions, costs, charges, taxes and other expenses incurred by the Lender and its counsel in connection with this Amendment, including, but not limited to, reasonable fees and expenses of the Lender’s counsel and all recording fees, taxes and charges.

     4. This Amendment may be executed in any number of duplicate originals or counterparts, each of such duplicate originals or counterparts shall be deemed to be an original and taken together shall constitute but one and the same instrument. The parties agree that their respective signatures may be delivered by fax or email. Any party who chooses to deliver its signature by fax or email agrees to provide a counterpart of this Amendment with its inked signature promptly to each other party.

     5. This Amendment shall be governed by and interpreted in accordance with the laws of the State of New York, except that no doctrine of choice of law shall be used to apply the laws of any other state or jurisdiction to this Amendment.

     6. EACH BORROWER WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY CLAIM, COUNTERCLAIM, ACTION OR OTHER PROCEEDING ARISING UNDER OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

2

          IN WITNESS WHEREOF, the Borrowers and the Lender have executed this Fourth Amendment to the Senior Subordinated Loan and Security Agreement as of the date first above written.

REGIONAL MANAGEMENT CORP. REGIONAL FINANCE CORPORATION OF      SOUTH CAROLINA REGIONAL FINANCE CORPORATION OF GEORGIA REGIONAL FINANCE CORPORATION OF TEXAS REGIONAL FINANCE CORPORATION OF      NORTH CAROLINA REGIONAL FINANCE CORPORATION OF ALABAMA REGIONAL FINANCE CORPORATION OF      TENNESSEE
By:	/s/ Robert D. Barry
Name:	Robert D. Barry
Title:		Chief Financial Officer/EVP of each of the above-listed corporations

3

PALLADIUM CAPITAL MANAGEMENT III, L.L.C., as Agent
By:	/s/ Kevin L. Reymond
	Name:	Kevin L. Reymond
	Title:	CFO
PALLADIUM EQUITY PARTNERS III, L.P., as a Lender
By:	Palladium Equity Partners III, L.L.C.,
Its:	General Partner
By:	/s/ David Perez
	Name:	David Perez
	Title:	Managing Director
RICHARD A. GODLEY, as a Lender
/s/ Richard A. Godley
JERRY SHIRLEY,
as a Lender
/s/ Jerry Shirley
BRENDA KINLAW,
as a Lender
/s/ Brenda Kinlaw

4

Reaffirmation of Guaranty:

     The undersigned confirms and reaffirms all of the terms of the guaranty dated as of August 25, 2010 (the “Guaranty”) signed by the undersigned in which it, among other things, unconditionally guarantees payment and performance of all of the Borrowers’ Obligations under the Senior Subordinated Loan and Security Agreement, as amended by the foregoing Amendment. As of the date hereof, the undersigned confirms and reaffirms there are no claims, set-offs or defenses of any kind or nature to the undersigned’s obligations under the Guaranty. Except as otherwise defined in this reaffirmation, capitalized terms set forth in this reaffirmation have the meaning assigned in the Amendment.

UPSTATE MOTOR COMPANY
By:	/s/ Robert D. Barry
	Name:	Robert D. Barry
	Title:	Chief Financial Officer/EVP

5

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the use in this Registration Statement (No. 333-174245) on Form S-1 of Regional Management Corp. and Subsidiaries of our report dated February 20, 2012, relating to our audits of the consolidated financial statements, appearing in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to our firm under the captions “Experts” and “Selected Financial Data” in such Prospectus.

Raleigh, North Carolina
March 2, 2012