10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington , D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2004

OR

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

For the transition period from                      to                     

Commission File Number 1-9733

CASH AMERICA INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Texas	75-2018239
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
1600 West 7th Street
Fort Worth, Texas	76102 – 2599
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:
(817) 335-1100

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, $.10 par value per share	New York Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act:

Common Stock Purchase Rights

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

Yes þ           No o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

Yes þ           No o

     The aggregate market value of 27,959,930 shares of the registrant’s Common Stock held by nonaffiliates on June 30, 2004 was approximately $643,078,000.

     At February 14, 2005 there were 29,383,066 shares of the registrant’s Common Stock, $.10 par value, issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the Registrant’s definitive Proxy Statement pertaining to the 2005 Annual Meeting of Shareholders are incorporated herein by reference into PART III of this Form 10-K.

CASH AMERICA INTERNATIONAL, INC.

YEAR ENDED DECEMBER 31, 2004

INDEX TO FORM 10-K

PART I	1
Item 1. Business	1
Item 2. Properties	13
Item 3. Legal Proceedings	14
Item 4. Submission of Matters to a Vote of Security Holders	15
PART II	16
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	16
Item 6. Selected Financial Data	17
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	37
Item 8. Financial Statements and Supplementary Data	38
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	72
Item 9A. Controls and Procedures	72
PART III	73
Item 10. Directors and Executive Officers of the Registrant	73
Item 11. Executive Compensation	73
Item 12. Security Ownership of Certain Beneficial Owners and Management	73
Item 13. Certain Relationships and Related Transactions	73
Item 14. Principal Accounting Fees and Services	73
PART IV	73
Item 15. Exhibits, Financial Statement Schedules	73
SIGNATURES	74
2004 Long-Term Incentive Plan
1st Amended and Restated Credit Agreement
Subsidiaries
Consent of PricewaterhouseCoopers LLP
Certification of CEO Pursuant to Rule 13a-14(a)
Certification of CFO Pursuant to Rule 13a-14(a)
Certification of CEO Pursuant to 18 U.S.C. Section 1350
Certification of CFO Pursuant to 18 U.S.C. Section 1350

PART I

ITEM 1. BUSINESS

General

     Cash America International, Inc. (the “Company”) was incorporated in 1984 to engage in the business of owning and operating pawnshops. Since that time, the Company has significantly broadened the geographic scope of its operations and expanded its offering of financial services to its customers. As of December 31, 2004, the Company provided specialty financial services through 839 total locations.

The Company is the nation’s largest provider of secured non-recourse loans, commonly referred to as pawn loans. In December 2004, the Company acquired a 41-store pawn lending chain based in Las Vegas, Nevada and operating under the trade name SuperPawn (“SuperPawn”). As of December 31, 2004, the Company provided pawn loans to individuals through 452 locations in 21 states. It also offers unsecured cash advances in most of its pawn lending locations. In addition, the Company is in the business of owning and operating cash advance locations. While these locations primarily offer cash advances, many offer check cashing services and other retail financial services and products such as money orders and money transfers. As of December 31, 2004, the Company’s cash advance operations consisted of 253 locations, including 175 locations through Cashland Financial Services, Inc. (“Cashland”), a wholly-owned subsidiary, 32 southern California locations operating under the brand names Urgent Money and GoldX, and 46 Cash America Payday Advance locations (collectively referred to as “cash advance locations”). The Company also offers check cashing services through 128 franchised and 6 company-owned check cashing centers of Mr. Payroll Corporation (“Mr. Payroll”), a wholly-owned subsidiary. In order to dedicate its strategic efforts and resources on the growth opportunities of pawn lending and cash advance activities in the United States, the Company sold its foreign pawn lending operations in the United Kingdom and Sweden in September 2004. See further discussion regarding the sale in Item 7 and Item 8. As a result of the sale of the foreign pawn lending operations, all discussions and financial information below have excluded the effect of the Company’s foreign pawn lending operations, as they have been classified as discontinued operations.

     The Company’s principal executive offices are located at 1600 West 7^th Street, Fort Worth, Texas 76102-2599, and its telephone number is (817) 335-1100. As used in this report, the term “Company” includes Cash America International, Inc. and its subsidiaries.

     The Company’s growth over the years has been the result of its business strategy of acquiring existing pawnshop locations and establishing new pawnshop locations that can benefit from the Company’s centralized management and standardized operations. In 2003, the Company expanded this strategy to include acquiring existing cash advance locations and establishing new cash advance locations. The Company intends to continue its business strategy of acquiring and establishing pawnshop and cash advance locations (collectively referred to as “lending locations”), increasing its share of the consumer loan business, and concentrating multiple lending locations in regional and local markets in order to expand market penetration, enhance name recognition and reinforce marketing programs. The Company also intends to offer new products and services in its lending locations in order to meet the growing financial services needs of its customers. Studies indicate to the Company that a large portion of its customers consists of individuals who do not regularly transact loan business with banks. (See, for example, Dr. Robert W. Johnson and Dr. Dixie P. Johnson, Pawnbroking in the U.S.: A Profile of Customers, Credit Research Center, Georgetown University, 1998.)

     The Company added 45 pawnshop locations including the SuperPawn locations in 2004, and 2 locations were either combined or closed. See further discussion of the SuperPawn acquisition in Item 7 and Item 8. In addition to its owned pawnshops, the Company offers and sells franchises to third parties for their independent ownership and operation of “Cash America” or “SuperPawn” pawnshops. The Company added 5 and terminated 1 franchise in 2004. As of December 31, 2004, there were 11 franchised lending locations in operation.

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     Website Access to Reports. Through its home page at www.cashamerica.com, the Company provides free access to its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after such reports are electronically filed with or furnished to the Securities and Exchange Commission.

Pawn Lending Activities

     Pawnshops function as convenient sources of consumer loans and as sellers primarily of previously owned merchandise acquired when customers do not redeem the pawned goods. The pledged goods in the Company’s pawn operations are generally tangible personal property, other than securities or printed evidence of indebtedness and generally consist of jewelry, tools, televisions and stereos, musical instruments, firearms, and other miscellaneous items. One convenient aspect of the pawn transaction is that the customer has no legal obligation to repay the amount loaned. Instead, the Company relies on the value of the pawned property as security in the event it is not redeemed, to recover the principal amount loaned plus a yield on the investment. As a result, the creditworthiness of the customer is not a factor, and a decision not to redeem pawned property has no effect on the customer’s personal credit status. (Although pawn transactions can take the form of an advance of funds secured by the pledge of property or a “buy-sell agreement” involving the actual sale of the property with an option to repurchase it, the transactions are referred to throughout this report as “pawn loans” for convenience.)

     In a pawn transaction, the Company contracts for a finance and service charge to compensate it for the use of the funds loaned. Finance and service charges contributed approximately 23.6% of the Company’s total revenue in 2004, 25.9% in 2003 and 27.0% in 2002. The finance and service charge is typically calculated as a percentage of the pawn loan amount based on the size and duration of the transaction, in a manner similar to which interest is charged on a bank loan, and has generally ranged from 12% to 300% annually, as permitted by applicable state pawnshop laws.

     At the time a pawn transaction is entered into, a pawn transaction agreement, commonly referred to as a pawn ticket, is delivered to the borrower (pledgor) that sets forth, among other items: the name and address of the pawnshop and the pledgor; the pledgor’s identification number from his or her driver’s license or other approved identification; the date; the identification and description of the pledged goods, including applicable serial numbers; the amount financed; the finance and service charge; the maturity date; the total amount that must be paid to redeem the pledged goods on the maturity date; and the annual percentage rate.

     The amount that the Company is willing to finance is typically based on a percentage of the pledged personal property’s estimated disposition value. The sources for the Company’s determination of the estimated disposition value are numerous and include the Company’s automated product valuation system as well as catalogues, “blue books”, newspapers, internet research and previous disposition experience with similar items. These sources, together with the employees’ experience in disposing of similar items of merchandise in particular pawnshops, influence the determination of the estimated disposition value of such items. The Company does not utilize a standard or mandated percentage of estimated disposition value in determining the amount to be financed. Instead, employees have the authority to set the percentage for a particular item and determine the ratio of loan amount to estimated disposition value with the expectation that, if the item is forfeited to the pawnshop, its subsequent disposition would yield a profit margin consistent with the Company’s historical experience. The pledged property is held through the term of the transaction, which generally is one month with an automatic sixty-day redemption period (see “Regulation” for exceptions in certain states), unless earlier repaid, renewed or extended. A majority of the amounts advanced by the Company are paid in full with accrued finance and service charges or are renewed or extended through payment of accrued finance and service charges. In the event the pledgor does not repay,

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renew or extend his loan, the unredeemed collateral is forfeited to the Company and then becomes merchandise available for disposition through the Company’s pawnshops, or through a major gold bullion bank. The Company does not record pawn loan losses or charge-offs because the amount advanced becomes the carrying cost of the forfeited collateral that is to be recovered through the merchandise disposition function described below.

     The recovery of the amount advanced, as well as realization of a profit on disposition of merchandise, is dependent on the Company’s initial assessment of the property’s estimated disposition value. Improper assessment of the disposition value of the collateral in the lending function could result in the disposition of the merchandise for an amount less than the amount advanced. However, the Company historically has experienced profits from the disposition of such merchandise. Declines in gold prices generally will also reduce the disposition value of jewelry items acquired in pawn transactions and could adversely affect the Company’s ability to recover the carrying cost of the acquired collateral. For 2004, 2003 and 2002, the Company experienced profit margins on disposition of merchandise of 38.5%, 37.5% and 34.8%, respectively.

     At December 31, 2004, the Company had approximately 1,233,000 outstanding pawn loans totaling $109,353,000, with an average balance of approximately $89 per loan.

     Presented below is information with respect to pawn loans made, acquired, and forfeited for the pawn lending operations for the years ended December 31, 2004, 2003 and 2002:

	2004			2003			2002
	($ in thousands)
Loans made, including loans renewed	$	336,021		$	313,264		$	302,911
Loans acquired		26,781			2,506			306
Loans repaid		(157,624	)		(149,808	)		(145,624	)
Loans renewed		(46,008	)		(40,875	)		(36,387	)
Loans forfeited for disposition		(130,971	)		(122,548	)		(119,333	)
Net increase in pawn loans outstanding	$	28,199		$	2,539		$	1,873
Loans repaid or renewed as a percent of loans made		60.6	%		60.9	%		60.1	%

Merchandise Disposition Activities

     The Company engages in the disposition of merchandise acquired when a pawn loan is not repaid, when used goods are purchased from the general public and when new merchandise is acquired from vendors. New goods consist primarily of accessory merchandise that enhances the marketability of existing merchandise, such as tools, consumer electronics and jewelry. For the year ended December 31, 2004, $171,484,000 of merchandise was added to merchandise held for disposition, of which $130,971,000 was from loans not repaid, $26,921,000 was purchased from customers and vendors, and $13,592,000 was added through acquisitions of pawnshops. Proceeds from disposition of merchandise contributed 53.3% of the Company’s total revenue in 2004, 60.7% in 2003 and 66.6% in 2002

     The Company offers a refund/exchange policy with respect to certain items of merchandise but otherwise does not provide its customers with warranties on used merchandise purchased from the Company. The Company permits its customers to purchase merchandise on a layaway plan whereby the customer agrees to purchase an item by making an initial cash deposit representing a small portion of the disposition price and making additional, non-interest bearing payments on the balance of the disposition price in accordance with a specified schedule. The Company then segregates the item and holds it until the disposition price is paid in full. Should the customer fail to make a required payment, the item is placed with the other merchandise held for disposition. At December 31, 2004, the Company held approximately $5,686,000 in customer layaway deposits.

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     The Company provides an allowance for valuation and shrinkage of its merchandise based on management’s evaluation. Management’s evaluation takes into consideration historical shrinkage, the quantity and age of slow-moving merchandise on hand and markdowns necessary to liquidate slow-moving merchandise. At December 31, 2004, total pawn operations merchandise on hand was $67,050,000, after deducting an allowance for valuation and shrinkage of merchandise of $1,445,000.

Cash Advance Activities

     In 2000, the Company began offering a short-term unsecured credit vehicle referred to as a cash advance through most of its Cash America pawnshops and in 2003 expanded the offering of this product through the establishment of Cash America Payday Advance locations. Effective August 1, 2003, the Company purchased substantially all of the assets of Cashland, Inc. a privately owned consumer finance company based in Dayton, Ohio. Cashland’s locations offer cash advances, check cashing and related money services.

     As of December 31, 2004, the cash advance product was available in 678 lending locations, which included 425 pawnshop locations and 253 cash advance locations. This included 366 units that offer the product on behalf of third-party banks that underwrite the advance to the customer and pay the Company a fee for its marketing and administrative services. Cash advances are generally offered for a term of 7 to 45 days, depending on state law and the customer’s next payday. The product offered by the Company in 312 locations provides customers with cash in exchange for a promissory note or other repayment agreement, which is typically supported by that customer’s personal check for the aggregate amount of the cash advanced plus a service fee. To repay the cash advance, customers may redeem their checks by paying cash or they may allow the checks to be presented for collection. (Although these cash advance transactions may take the form of loans or deferred check deposit transactions, the transactions are referred to throughout this report as “cash advances” for convenience.) Cash advance fees earned by the Company contributed approximately 21.1% of the Company’s total revenue in 2004, 12.1% in 2003 and 5.4% in 2002.

     As discussed above, in certain markets the cash advance product is offered in the Company’s locations by third-party banks. In April 2004, the Company entered into an agreement with a second third-party bank to offer cash advances in some of the Company’s locations. Under the current bank programs, the banks sell participation interests in bank originated cash advances to third parties, and the Company purchases sub-participation interests in certain of those participations. The Company also receives an administrative fee for its services. In order to benefit from the use of the Company’s collection resources and proficiency, all cash advances unpaid after maturity are assigned to the Company at a discount from the amount owed by the borrower. Losses on cash advances assigned to the Company that prove uncollectible are the responsibility of the Company. To the extent that the Company collects an amount owed by the customer in excess of the amount assigned, the Company is entitled to the excess and recognizes it in income when collected. Since the Company may not be successful in the collection of the assigned accounts, the Company’s provision for loan losses includes amounts estimated to be adequate to absorb credit losses from cash advances in the aggregate portfolio, including those expected to be assigned from each third-party bank’s portfolio. As of December 31, 2004, $51,670,000 of combined gross cash advances was outstanding, including a $10,150,000 non-participated interest owned by the banks that is not included in the Company’s consolidated balance sheet. An allowance for losses of $4,358,000 has been provided in the consolidated financial statements. The Company also provided accrued losses for bank owned portfolios of $342,000 at December 31, 2004, which is included in “Accounts payable and accrued expenses” in the accompanying consolidated balance sheet. See Item 8. Financial Statements and Supplementary Data, Note 5 of “Notes to Consolidated Financial Statements.”

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           Presented below is information with respect to the cash advance product for the years ended December 31, 2004, 2003 and 2002:

	2004		2003		2002
Locations offering cash advances at end of year		678		544		391
On behalf of the Company		312		240		82
On behalf of the banks		366		304		309
Amount of cash advances written (in thousands)	$	647,746	$	300,518	$	123,705
On behalf of the Company	$	408,872	$	143,040	$	17,561
On behalf of the banks	$	238,874	$	157,478	$	106,144
Amount of cash advances assigned by the banks (in thousands)	$	45,895	$	29,981	$	23,645
Average cash advance amount written	$	336	$	311	$	284

Check Cashing Activities

     While the Company’s primary business involves the acquisition, establishment and operation of pawn and cash advance lending locations, it also provides check cashing services primarily through its subsidiaries, Mr. Payroll and Cashland. As of December 31, 2004, Mr. Payroll’s operations consisted of 128 franchised and 6 company-owned check cashing centers in 20 states. Check cashing is provided in all 175 of the Cashland cash advance locations. Aggregate check cashing fees was 2.0% of the Company’s total revenue in 2004, 1.3% in 2003 and 1.0% in 2002.

Financial Information on Segments and Areas

     Additional financial information regarding the Company’s revenues and assets by each of its three operating segments is provided in Note 18 of “Notes to Consolidated Financial Statements.”

Operations

     Unit Management. Each location has a unit manager who is responsible for supervising its personnel and assuring that it is managed in accordance with Company guidelines and established policies and procedures. Each unit manager reports to a Market Manager, who typically oversees approximately ten unit managers. As of December 31, 2004, the Company had one pawn lending operating division, which is managed by an Executive Vice President. This operating division consists of five geographic operating regions, each of which is managed by a Region Vice President. Each Market Manager reports to a Region Vice President. The cash advance operating division consists of a similar geographic operating structure. The Chief Operating Officer of Cashland and two Region Vice Presidents of Cash America Payday Advance are managed by an Executive Vice President. Three Cashland supervisors oversee its geographic operating regions and report to its Chief Operating Officer. Each unit manager reports to a Market Manager, who typically oversees approximately ten unit managers.

     Trade Names. The Company operates its locations under the trade names “Cash America,” “Cashland,” “Mr. Payroll,” and “SuperPawn”. The Company’s marks “Cash America,” “Cashland,” “SuperPawn,” “Cash When It Counts,” and “Mr. Payroll” are registered with the United States Patent and Trademark Office.

     Personnel. At December 31, 2004, the Company employed 4,279 persons in its operations. Of the total employees, approximately 331 were in executive and administrative functions.

     The Company has an established training program that provides a combination of classroom instruction, video presentation and on-the-job loan and merchandise disposition experience. A new

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employee is introduced to the business through an orientation program and through a three-month training program that includes classroom and on-the-job training in loans, layaways, merchandise and general administration of unit operations.

     The experienced employee receives training and an introduction to the fundamentals of management to acquire the skills necessary to move into management positions within the organization. Manager training involves a twelve-month program that includes additional management principles and more extensive training in income maximization, recruitment, merchandise control, and cost efficiency.

Future Expansion

     The Company’s objective is to continue to expand the number of pawnshops and cash advance locations (collectively referred to as “lending locations”) it owns and operates through acquisitions and by establishing new units. Management believes that such anticipated expansion will continue to provide economies of scale in supervision, purchasing, administration and marketing by decreasing the overall average cost of such functions per unit owned. By concentrating multiple lending units in regional and local markets, the Company seeks to expand market penetration, enhance name recognition and reinforce marketing programs. The Company also intends to offer new products and services in its lending units in order to meet the growing financial services needs of its customers.

     The primary lending location acquisition criteria include evaluation of the volume of annual loan transactions, outstanding loan balances, and location and condition of the facility as well as lease terms or fair market value of the facility if it is to be purchased. The primary lending location start-up criteria include the facility-related items noted above and conditions in the surrounding community indicating a sufficient level of potential customers. The Company’s business strategy is to continue expanding its lending business within its existing geographic markets and into other markets that meet the risk/reward considerations of the Company.

     The Company’s expansion has not only been in acquiring previously owned lending locations, but also in establishing new locations. After a suitable location has been found and a lease and license are obtained, the new location can be ready for business within four to six weeks, with completion of counters, vaults and security system and the transfer of merchandise from other locations (for pawnshop locations). The approximate start-up costs, defined as the investment in property and equipment, for recently established pawnshops have ranged from $151,000 to $325,000, with an average estimated cost per location of approximately $238,000 in 2004. This amount does not include merchandise transferred from other locations, funds to advance on pawn loans and cash advances and operating expenses. The start-up costs for recently established cash advance locations have ranged from $42,000 to $157,000, with an average estimated cost per location of approximately $96,000 in 2004.

     The Company’s expansion program is subject to numerous factors that cannot be predicted, such as the availability of attractive acquisition candidates or sites on suitable terms and general economic conditions. Further, there can be no assurance that future expansion can be continued on a profitable basis. Among other factors, the following could impact the Company’s future planned expansion.

     Statutory Requirements. The Company’s ability to add start-up pawnshop locations in Texas counties having a population of more than 250,000 is limited by a law that became effective September 1, 1999, which restricts the establishment of new pawnshops within a certain distance of existing pawnshops. In addition, the present statutory and regulatory environment of some states renders expansion into those states impractical. See “Business – Regulation.”

     Competition. The Company faces competition in its expansion program. Several competing pawnshop and cash advance companies have implemented expansion and acquisition programs. A number of smaller companies have also entered the market. While the Company believes that it is the largest pawnshop operator in the United States, and one of the largest cash advance operators, there can be no

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assurance that the Company will be more successful than its competitors in pursuing acquisition opportunities and leases for attractive start-up locations. Increased competition could also increase prices for attractive acquisition candidates.

     Capital Requirements. In some states, the Company is required by law to maintain a minimum amount of certain unencumbered net assets (currently $150,000 in Texas) for each pawnshop location. The Company’s expansion plans will therefore be limited in these states to the extent the Company is unable to maintain these required levels of unencumbered net assets. At present, these requirements do not limit the Company’s growth opportunities.

     Availability of Qualified Unit Management Personnel. The Company’s ability to expand may also be limited by the availability of qualified unit management personnel. While the Company seeks to train its existing personnel to enable those capable to assume management positions, there can be no assurance that sufficient qualified personnel will be available to satisfy the Company’s needs with respect to its planned expansion.

Competition

     While pawnbroking is a time-honored American industry, it remains very fragmented with approximately 12,000 stores nationwide. The three largest publicly traded pawnshop companies operate approximately 850 total pawnshops in the United States. Management continues to believe that the Company can achieve economies of scale and increased operating efficiencies by increasing the number of stores under operation and utilizing modern point-of-sale systems and proven operating methods.

     The less fragmented cash advance industry is growing at a faster rate. According to the investment banking firm Stephens Inc., the number of cash advance transactions is estimated to be growing nationwide at a rate of 15% to 20% per year, and the three largest operators service approximately one-quarter of the market. Despite the concentration of major competitors in the cash advance industry, management believes that significant opportunities for growth remain in this business.

     The Company encounters significant competition in connection with its lending and merchandise disposition operations. In connection with the lending of money, the Company competes with other pawnshops and cash advance shops and other forms of financial institutions such as consumer finance companies, which generally lend on an unsecured as well as a secured basis. Other lenders may lend money on terms more favorable than the Company. Some competitors, such as certain commercial banks and consumer finance companies, may have greater financial resources than the Company. Several competing pawnshop and cash advance companies have implemented expansion and acquisition programs. See “Business – Future Expansion.” These competitive conditions may adversely affect the Company’s revenues and profitability.

Regulation

     The Company’s pawnshop operations are subject to extensive regulation, supervision and licensing under various federal, state and local statutes, ordinances and regulations in the 21 states in which it operates. (For a geographic breakdown of operating locations, see “Properties”.) Set forth below is a summary of the state pawnshop regulations in those states containing a preponderance of the Company’s operating locations.

     Texas Pawnshop Regulations. Under the Texas Pawnshop Act, the Texas Consumer Credit Commissioner has primary responsibility for the regulation of pawnshops and enforcement of laws relating to pawnshops in Texas. The Company is required to furnish the Texas Consumer Credit Commissioner with copies of information, documents and reports which are required to be filed by it with the Securities and Exchange Commission.

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     The Texas Pawnshop Act prescribes the stratified loan amounts and the maximum allowable rates of pawn service charge that pawnbrokers in Texas may charge for the lending of money within each stratified range of loan amounts. That is, the Texas law establishes the maximum allowable pawn service charge rates based on the amount financed per pawn loan. The maximum allowable rates under the Texas Pawnshop Act for the various stratified loan amounts for the fiscal years ended June 30, 2005, 2004 and 2003, are as follows:

Year Ending June 30, 2005						Year Ended June 30, 2004						Year Ended June 30, 2003
			Maximum						Maximum						Maximum
Amount			Allowable			Amount			Allowable			Amount			Allowable
Financed Per			Annual			Financed Per			Annual			Financed Per			Annual
Pawn Loan			Percentage Rate			Pawn Loan			Percentage Rate			Pawn Loan			Percentage Rate
$1	to	$156		240	%	$1	to	$153		240	%	$1	to	$150		240	%
157	to	1,040		180		154	to	1,020		180		151	to	1,000		180
1,041	to	1,560		30		1,021	to	1,530		30		1,001	to	1,500		30
1,561	to	13,000		12		1,531	to	12,750		12		1,501	to	12,500		12

     These rates are reviewed and established annually by the Texas Consumer Credit Commissioner. The maximum allowable service charge rates were established and have not been revised since 1971, when the Texas Pawnshop Act was enacted. Since 1981, the ceiling amounts for stratification of the loan amounts to which these rates apply have been revised each July 1 in relation to the Consumer Price Index, except that the Texas legislature amended the Texas Pawnshop Act to establish the ceiling amounts reflected above for the year ended June 30, 2003. Under current Texas law, a pawn loan may not exceed $13,000. In addition to establishing maximum allowable service charge rates and loan ceilings, the Texas Pawnshop Act also provides for the licensing of pawnshops and pawnshop employees. To be eligible for a pawnshop license in Texas, an applicant must (i) be of good moral character; (ii) have net assets of at least $150,000 readily available for use in conducting the business of each licensed pawnshop; (iii) show that the pawnshop will be operated lawfully and fairly in accordance with the Texas Pawnshop Act; (iv) show that the applicant has the financial responsibility, experience, character, and general fitness to command the confidence of the public in its operations; and, (v) in the case of a business entity, the good moral character requirement shall apply to each officer, director and holder of 5% or more of the entity’s outstanding shares.

     As part of the license application process, any existing pawnshop licensee who would be affected by the granting of the proposed application may request a public hearing at which to appear and present evidence for or against the application. For an application for a new license in a county with a population of 250,000 or more, the proposed facility must not be located within two miles of an existing licensed pawnshop.

     The Texas Consumer Credit Commissioner may, after notice and hearing, suspend or revoke any license for a Texas pawnshop upon finding, among other things, that (i) any fees or charges have not been paid; (ii) the licensee violates (whether knowingly or unknowingly without due care) any provisions of the Texas Pawnshop Act or any regulation or order thereunder; or (iii) any fact or condition exists which, if it had existed at the time the original application was filed for a license, would have justified the Commissioner in refusing such license.

     Under the Texas Pawnshop Act, a pawnbroker may not accept a pledge from a person under the age of 18 years; make any agreement requiring the personal liability of the borrower; accept any waiver of any right or protection accorded to a pledgor under the Texas Pawnshop Act; fail to exercise reasonable care to protect pledged goods from loss or damage; fail to return pledged goods to a pledgor upon payment of the full amount due; make any charge for insurance in connection with a pawn transaction; enter into any pawn transaction that has a maturity date of more than one month; display for disposition in storefront windows or sidewalk display cases, pistols, swords, canes, blackjacks and similar weapons; operate a pawnshop between

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the hours of 9:00 p.m. and 7:00 a.m.; or purchase used or secondhand personal property or certain building construction materials unless a record is established containing the name, address and identification of the seller, a complete description of the property, including serial number, and a signed statement that the seller has the right to sell the property.

     Florida Pawnshop Regulations. The Florida Pawnbroking Act, adopted in 1996, provides for the licensing and bonding of pawnbrokers in Florida and for the Department of Agriculture and Consumer Services’ Division of Consumer Services to investigate the general fitness of applicants and generally to regulate pawnshops in the state. The statute limits the pawn service charge that a pawnbroker may collect to a maximum of 25% of the amount advanced in the pawn for each 30-day period of the transaction. The law also requires pawnbrokers to maintain detailed records of all transactions and to deliver such records to the appropriate local law enforcement officials. Among other things, the statute prohibits pawnbrokers from falsifying or failing to make entries in pawn transaction forms, refusing to allow appropriate law enforcement officials to inspect their records, failing to maintain records of pawn transactions for at least two years, making any agreement requiring the personal liability of a pledgor, failing to return pledged goods upon payment in full of the amount due (unless the pledged goods had been taken into custody by a court or law enforcement officer or otherwise lost or damaged), or engaging in title loan transactions at licensed pawnshop locations. It also prohibits pawnbrokers from entering into pawn transactions with a person who is under the influence of alcohol or controlled substances, a person who is under the age of eighteen, or a person using a name other than his own name or the registered name of his business.

     Nevada Pawnshop Regulations. The Nevada statute governing pawnbrokers establishes a maximum allowable interest rate of 10% per month for pawn transactions and allows an initial charge of $5 in addition to interest. All pledged property must be held for redemption for at least 120 days before it can be offered for sale to the public. The statute also (i) requires that certain bookkeeping records be maintained, (ii) requires that pawn transaction information be reported to local law enforcement agencies, and (iii) establishes a procedure for law enforcement officials to place a hold on property alleged to be related to criminal activity. The Nevada law also prohibits pawnbrokers from making false entries in their books or records, making false reports to law enforcement agencies, removing pledged property from their business premises unless specifically authorized under the statute, and receiving pledged property from certain persons, including a person who is under age 18 or intoxicated.

     Tennessee Pawnshop Regulations. Tennessee state law provides for the licensing of pawnbrokers in that state. It also (i) requires that pawn transactions be reported to local law enforcement agencies; (ii) requires pawnbrokers to maintain insurance coverage on the property held on pledge for the benefit of the pledgor; (iii) establishes certain hours during which pawnshops may be open for business; and (iv) requires that certain bookkeeping records be maintained. Tennessee law prohibits pawnbrokers from selling, redeeming or disposing of any goods pledged or pawned to or with them within 48 hours after making their report to local law enforcement agencies. The Tennessee statute establishes a maximum allowable interest rate of 24% per annum; however, the pawnshop operator may charge an additional fee of up to one-fifth of the amount of the loan per month for investigating the title, storing and insuring the security and various other expenses.

     Louisiana Pawnshop Regulations. Louisiana law provides for the licensing and bonding of pawnbrokers in that state. In addition, the act requires that pawn transactions be reported to local law enforcement agencies, establishes hours during which pawnbrokers may be open for business and requires certain bookkeeping practices. Louisiana state law establishes maximum allowable rates of interest on pawn loans of 10% per month. In addition, Louisiana law provides that the pawnbroker may charge a service charge not to exceed 10% per month for all other services. Under the Louisiana statute, no pawnbroker may sell any pledged collateral until the lapse of three months from the time the loan was made. Various municipalities and parishes in the state of Louisiana have adopted additional ordinances and regulations pertaining to pawnshops.

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     Georgia Pawnshop Regulations. Georgia state law requires pawnbrokers to maintain detailed permanent records concerning pawn transactions and to keep them available for inspection by duly authorized law enforcement authorities. The Georgia statute prohibits pawnbrokers from failing to make entries of material matters in their permanent records; making false entries in their records; falsifying, obliterating, destroying, or removing permanent records from their places of business; refusing to allow duly authorized law enforcement officers to inspect their records; failing to maintain records of each pawn transaction for at least four years; accepting a pledge or purchase from a person under the age of eighteen or who the pawnbroker knows is not the true owner of the property; making any agreement requiring the personal liability of the pledgor or seller or waiving any of the provisions of the Georgia statute; or failing to return or replace pledged goods upon payment of the full amount due (unless pledged goods have been taken into custody by a court or a law enforcement officer). In the event pledged goods are lost or damaged while in the possession of the pawnbroker, the pawnbroker must replace the lost or damaged goods with like kinds of merchandise. Under Georgia law, total interest and service charges may not, during each 30-day period of the loan, exceed 25% of the principal amount advanced in the pawn transaction (except that after ninety days from the original date of the loan, the maximum rate declines to 12.5% for each subsequent 30-day period). The statute provides that municipal authorities may license pawnbrokers, define their powers and privileges by ordinance, impose taxes upon them, revoke their licenses, and exercise such general supervision as will ensure fair dealing between the pawnbroker and his customers.

     Although pawnshop regulations vary from state to state to a considerable degree, the regulations summarized above are representative of the regulatory frameworks affecting the Company in the various states in which its operating units are located.

     Cash Advances. The Company offers a cash advance product referred to as “cash advances” in most of its pawnshops and in all of its cash advance locations. Each state in which the Company offers the product has specific laws dealing with the conduct of this business. Typically, the applicable regulations restrict the amount of finance and service charges that may be assessed and limit the customers’ ability to renew or extend these transactions. In many instances, the regulations also limit the aggregate amount that a provider may advance (and, in some cases, the number of cash advances the provider may make) to any one customer at one time. Providers typically must obtain a separate license from the state licensing authority in order to offer this product. The Company must also comply with the various disclosure requirements under the federal Truth in Lending Act (and Federal Reserve Regulation Z under that Act) in connection with these cash advance transactions.

     As previously noted, these cash advances are offered by third-party banks in 366 of the Company’s 678 locations that offered cash advances at December 31, 2004. The federal banking regulators who supervise the banks’ activities closely scrutinize all aspects of each bank’s cash advance programs. Further, certain state regulators have asserted that the Company must have a license under state law in order to perform the administrative services that it performs for the banks. In addition to a number of federal and state regulators, certain consumer advocacy groups and federal and state legislators have asserted that laws and regulations should be tightened so as to severely limit, if not eliminate, the availability of this cash advance product to consumers, despite the significant demand for it. Along with the leadership of the cash advance industry, the Company opposes such overly restrictive regulation and legislation. Nevertheless, the possibility exists that some combination of federal and state regulation and legislation could come to pass, which could restrict, or even eliminate, the availability of this cash advance product at some or all of the Company’s locations.

     As an example of restrictive legislation, the Georgia legislature passed a law in 2004 that, among other things, purported to prohibit a company from serving as an agent in connection with a third-party bank’s offering of cash advances to Georgia consumers if the agent “holds, acquires, or maintains a predominant economic interest in the revenues” generated by the cash advances. The Company serves as an agent for Community State Bank (the “Bank”) in connection with the Bank’s Georgia cash advance program. The Company and the Bank modified their contractual arrangement in 2004 to ensure that the

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Company’s compensation from the Bank is less than a predominant economic interest in the revenues generated by the Bank’s Georgia cash advances. In addition, the Company, the Bank, and several other banks and agents filed suit in U.S. District Court in April 2004 against the Georgia Attorney General and the Georgia Secretary of State seeking an injunction against enforcement of the new law primarily on the basis that it is preempted by federal law. While the District Court initially granted a temporary restraining order in the matter, it later denied the motion for an injunction. The plaintiffs in the case appealed that ruling to the U.S. Court of Appeals for the 11^th Circuit. If the Court of Appeals issues an adverse ruling, the precedent established by such a ruling could adversely affect legal proceedings that have been or might in the future be commenced against the Company or other companies in the cash advance business. A ruling of that nature could also influence other legislators and regulators to give even stronger consideration to overly restrictive legislation and regulation. Such trends could well have an adverse impact on the Company’s cash advance business.

     In 2003, the Federal Deposit Insurance Corporation (“FDIC”) adopted guidelines for cash advance programs that apply to all financial institutions under the FDIC’s supervision that offer these programs. The banks that offer cash advances in the Company’s locations are state chartered banks which are supervised by the FDIC. The guidelines describe the FDIC’s expectations for prudent risk management practices for cash advance activities, particularly with regard to capital, allowance for loan losses, and loan classifications. The guidelines also address recovery practices, income recognition, and managing risks associated with third-party relationships, as well as compliance with consumer protection laws. The guidelines form the basis for sound and appropriate regulation of cash advance programs conducted by FDIC-supervised financial institutions.

     Other Regulatory Matters, Etc. With respect to firearm sales, each pawnshop must comply with the Brady Handgun Violence Prevention Act (the “Brady Act”), which took effect on February 28, 1994. The Brady Act imposes a background check requirement in connection with the disposition of firearms by federally licensed firearms dealers. In addition, the Company must continue to comply with the longstanding regulations promulgated by the Department of the Treasury–Bureau of Alcohol, Tobacco and Firearms, which require each pawnshop dealing in guns to maintain a permanent written record of all receipts and dispositions of firearms.

     Under the federal Gramm-Leach-Bliley Act that took effect in 2001 and the federal regulations adopted to implement it, the Company is required to disclose to its customers its privacy policy and practices, including those relating to the sharing of customers’ nonpublic personal information with third parties. The disclosure must be made to customers at the time that the customer relationship is established and at least annually thereafter. Under these regulations, the Company is also required to ensure that its systems are designed to protect the confidentiality of customers’ nonpublic personal information.

     Under the USA PATRIOT Act passed by Congress in 2001, the Company is required to maintain an anti-money laundering compliance program covering certain of its business activities. The program must include: (1) the development of internal policies, procedures, and controls; (2) designation of a compliance officer; (3) an ongoing employee training program; and (4) an independent audit function to test the program. The United States Department of the Treasury is expected to issue regulations clarifying the requirements for anti-money laundering compliance programs for the pawnbroking and cash advance industries.

     In addition to the federal and state statutes and regulations described above, many of the Company’s operating units are subject to municipal ordinances, which may require, for example, local licenses or permits and specified recordkeeping procedures, among other things. Each of the Company’s pawnshops voluntarily or pursuant to municipal ordinance provides to the police department having jurisdiction daily information on all transactions involving pawn loans and over-the-counter purchases. These information reports are designed to provide the local police with a detailed description of the goods involved, including serial numbers (if any) and the name and address of the owner obtained from a valid identification card. This information is provided to local law enforcement agencies for processing to determine conflicting

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claims of rightful ownership. In addition, the Company voluntarily participates with other pawn lenders to provide similar information to a national database available to law enforcement in multiple jurisdictions. Goods held to secure pawn loans or goods purchased that are determined to belong to an owner other than the borrower or seller are subject to recovery by the rightful owner. However, the Company historically has not experienced a material number of claims of this nature, and the claims experienced have not had a material adverse effect on the Company’s results of operations.

     Casualty insurance, including burglary coverage, is maintained for each of the Company’s locations, and fidelity coverage is maintained on each of the Company’s employees.

     Management of the Company believes its operations are conducted in material compliance with all federal, state and local laws and ordinances applicable to its business.

     The Company’s franchising activities may be subject to various state regulations that, among other things, mandate disclosures to prospective franchisees and other requirements.

Executive Officers of the Registrant

     The following sets forth, as of February 24, 2005, certain data concerning the executive officers of the Company, all of whom are elected on an annual basis. There is no family relationship between any of the executive officers.

Name	Age		Position
Daniel R. Feehan		54	Chief Executive Officer and President
Thomas A. Bessant, Jr.		46	Executive Vice President – Chief Financial Officer
Robert D. Brockman		50	Executive Vice President – Administration
Jerry D. Finn		58	Executive Vice President – Pawn Operations
Michael D. Gaston		60	Executive Vice President – Business Development
William R. Horne		61	Executive Vice President – Information Technology
James H. Kauffman		60	Executive Vice President – Financial Services
Hugh A. Simpson		45	Executive Vice President – General Counsel and Secretary

     Daniel R. Feehan has been Chief Executive Officer and President since February 2000. He has served as President and Chief Operating Officer since January 1990. He served as Chairman and Co-Chief Executive Officer of Mr. Payroll Corporation from February 1998 to February 1999 before returning to the position of President and Chief Operating Officer of the Company.

     Thomas A. Bessant, Jr. joined the Company in May 1993 as Vice President – Finance and Treasurer. He was elected Senior Vice President – Chief Financial Officer in July 1997 and has served as Executive Vice President – Chief Financial Officer since July 1998. Prior to joining the Company, Mr. Bessant was a Senior Manager in the Corporate Finance Consulting Services Group of Arthur Andersen & Co., S.C. in Dallas, Texas from June 1989 to April 1993. Prior to that time, Mr. Bessant was a Vice President in the Corporate Banking Division of NCNB Texas, N.A., and its predecessor banking corporations, beginning in 1981.

     Robert D. Brockman joined the Company in July 1995 as Executive Vice President – Administration. Prior to that, he served as Vice President – Human Resources of THORN Americas, Inc., the operator of the Rent-A-Center chain of rent-to-own stores, from December 1986 to June 1995.

     Jerry D. Finn joined the Company in August 1994 and has served in various operations management positions since then, including Division Vice President from January 1995 to July 1997, Division Senior Vice President from July 1997 to April 1998, and Executive Vice President – Pawn

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Operations since April 1998. Prior to joining the Company, he served as District Supervisor for Kelly-Moore Paint Co. from March 1981 to August 1994.

     Michael D. Gaston joined the Company in April 1997 as Executive Vice President – Business Development. Prior to joining the Company, Mr. Gaston served as President of The Gaston Corporation, a private consulting firm, from 1984 to April 1997, and Executive Vice President of Barkley & Evergreen, an advertising and consulting agency, from 1991 to April 1997.

     William R. Horne joined the Company in February 1991 as Vice President – MIS. He was elected Senior Vice President – Information Technology in July 1997 and has served as Executive Vice President – Information Technology since October 1999.

     James H. Kauffman joined the Company in July 1996 as Executive Vice President – Chief Financial Officer. He served as President – Cash America Pawn from July 1997 to July 1998, and served as Chief Executive Officer of Rent-A-Tire, Inc. from July 1998 until August 2002. He also served as Executive Vice President – International Operations from October 1999 to September 2004. He has served as Executive Vice President – Financial Services since September 2004. Prior to joining the Company, Mr. Kauffman served as President of Keystone Steel & Wire Company, a wire products manufacturer, from July 1991 to June 1996.

     Hugh A. Simpson joined the Company in December 1990 as Vice President and General Counsel and was elected Vice President – General Counsel and Secretary in April 1991. He was elected Senior Vice President – General Counsel and Secretary in July 1997 and has served as Executive Vice President – General Counsel and Secretary since July 1998.

ITEM 2. PROPERTIES

     As of December 31, 2004, the Company owned the real estate and building for seven of its pawnshop locations. Since May 1992, the Company’s headquarters have been located in a nine-story building adjacent to downtown Fort Worth, Texas. The Company purchased the building in January 1992. All of the Company’s other locations are leased under non-cancelable operating leases with terms ranging from 3 to 15 years.

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     The following table sets forth, as of December 31, 2004, the number of owned pawn and cash advance locations by state. In addition to the locations listed below, the Company operates six owned Mr. Payroll check cashing locations in Texas.

			Cash
	Pawnshop		Advance
	Locations		Locations
Alabama		9		—
Arizona		10		—
California		1		32
Colorado		5		—
Florida		64		—
Georgia		17		—
Illinois		11		—
Indiana		13		15
Kentucky		9		17
Louisiana		20		—
Michigan		—		9
Missouri		16		—
Nevada		26		—
North Carolina		10		—
Ohio		6		134
Oklahoma		15		—
South Carolina		6		—
Tennessee		23		—
Texas		169		46
Utah		7		—
Washington		4		—
Total		441		253

     The Company considers its equipment, furniture and fixtures and owned buildings to be in good condition. The Company has its own construction supervisors who engage local contractors to selectively remodel and upgrade its lending facilities throughout the year.

     The Company’s leases typically require the Company to pay all maintenance costs, insurance costs and property taxes. For additional information concerning the Company’s leases, see Item 8. Financial Statements and Supplementary Data, Note 11 of “Notes to Consolidated Financial Statements.”

ITEM 3. LEGAL PROCEEDINGS

     On August 6, 2004, James E. Strong filed a purported class action lawsuit in the State Court of Cobb County, Georgia against Georgia Cash America, Inc., Cash America International, Inc. (together with Georgia Cash America, Inc., “Cash America”), Daniel R. Feehan, and several unnamed officers, directors, owners and “stakeholders” of Cash America. The lawsuit alleges many different causes of action, among the most significant of which is that Cash America has been making illegal payday loans in Georgia in violation of Georgia’s usury law, the Georgia Industrial Loan Act and Georgia’s Racketeer Influenced and Corrupt Organizations Act. Community State Bank has for some time made loans to Georgia residents through Cash America’s Georgia operating locations. The complaint in this lawsuit claims that Community State Bank is not the true lender with respect to the loans made to Georgia borrowers and that its involvement in the process is “a mere subterfuge.” Based on this claim, the suit alleges that Cash America

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is the “de facto” lender and is illegally operating in Georgia. The complaint seeks unspecified compensatory damages, attorney’s fees, punitive damages and the trebling of any compensatory damages. The Company believes that the claims in this suit are without merit and intends to vigorously defend this lawsuit. Cash America removed the case to federal court and filed a motion to compel the plaintiff to arbitrate his claim, in addition to denying the plaintiff’s allegations and asserting various defenses to his claim. The plaintiff has filed a motion to remand the case to Georgia state court. As of December 31, 2004, the parties await court rulings on the various motions. Because this case is at a very early stage, neither the likelihood of an unfavorable outcome nor the ultimate liability, if any, with respect to this litigation can be determined at this time.

     The Company is a defendant in certain lawsuits encountered in the ordinary course of its business. Certain of these matters are covered to an extent by insurance. In the opinion of management, the resolution of these matters will not have a material adverse effect on the Company’s financial position, results of operations or liquidity.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     There were no matters submitted to the Company’s security holders during the fourth quarter ended December 31, 2004.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market for Registrant’s Common Equity

     The New York Stock Exchange is the principal exchange on which Cash America International, Inc. common stock is traded under the symbol “CSH”. There were 616 stockholders of record (not including individual participants in security listings) as of February 14, 2005. The high, low and closing sales prices of common stock as quoted on the composite tape of the New York Stock Exchange and cash dividend declared per share during 2004 and 2003 were as follows:

	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
2004
High	$	24.46	$	24.33	$	24.98	$	30.45
Low		18.85		18.60		20.00		23.85
Close		23.05		23.00		24.46		29.73
Cash dividend declared per share		0.0175		0.0175		0.3175		0.0175
2003
High	$	9.99	$	13.50	$	18.49	$	21.50
Low		8.08		9.29		13.10		16.32
Close		9.48		13.22		16.40		21.18
Cash dividend declared per share		0.0125		0.0175		0.0175		0.0175

Issuer Purchases of Equity Securities

     The following table provides the information with respect to purchases made by the Company of shares of its common stock during each of the months in the fourth quarter of 2004:

						Total Number of		Maximum Number
	Total Number			Average		Shares Purchased as		of Shares that May
	of Shares			Price Paid		Part of Publicly		Yet Be Purchased
Period	Purchased			Per Share		Announced Plan		Under the Plan (1)
October 1 to October 31		40,426	(2)	$	24.97		40,000		552,700
November 1 to November 30		36,215	(3)		26.56		34,700		518,000
December 1 to December 31		1,269	(4)		28.23		—		518,000
Total		77,910		$	25.76		74,700

(1)	On July 25, 2002, the Company’s Board of Directors authorized the Company to purchase up to 1,000,000 shares of its common stock in the open market and terminated the open market purchase authorization established in 2000.
(2)	Includes 426 shares purchased on behalf of participants relating to the Company’s Non-Qualified Savings Plan.
(3)	Includes 376 shares received as partial payment for shares issued under stock option plans and 1,139 shares purchased on behalf of participants relating to the Company’s Non-Qualified Savings Plan.
(4)	Represents shares purchased on behalf of participants relating to the Company’s Non-Qualified Savings Plan.

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ITEM 6. SELECTED FINANCIAL DATA

Five-Year Summary of Selected Consolidated Financial Data of Continuing Operations
(Dollars in thousands, except per share data)
(Unaudited)

	Year Ended December 31,
	2004			2003			2002			2001			2000
Statement of Operations Data (a)
Total revenue	$	469,478		$	388,635		$	350,501		$	324,088		$	314,058
Income from operations	$	61,413		$	41,819		$	27,872		$	21,930		$	21,100
Income from continuing operations before income taxes (b)	$	55,023		$	34,325		$	19,313		$	12,506		$	3,606
Income (loss) from continuing operations (b)	$	34,965		$	22,030		$	11,917		$	7,281		$	(4,232	)
Income (loss) from continuing operations per share:
Basic	$	1.23		$	0.86		$	0.49		$	0.30		$	(0.17	)
Diluted	$	1.18		$	0.83		$	0.48		$	0.29		$	(0.17	)
Dividends declared per share	$	0.37		$	0.07		$	0.05		$	0.05		$	0.05
Weighted average shares:
Basic		28,402			25,586			24,424			24,643			25,461
Diluted		29,584			26,688			24,841			24,963			25,817
Balance Sheet Data at Year End
Pawn loans (a)	$	109,353		$	81,154		$	78,615		$	76,742		$	75,486
Cash advances, net (a)	$	36,490		$	28,401		$	2,639		$	1,695		$	811
Merchandise held for disposition, net (a)	$	67,050		$	49,432		$	49,564		$	60,270		$	55,915
Working capital (a)	$	209,463		$	156,142		$	118,619		$	121,067		$	134,506
Total assets (a)	$	555,165		$	377,194		$	287,006		$	299,131		$	277,297
Total debt (a)	$	166,626		$	148,040		$	137,000		$	159,220		$	153,037
Stockholders’ equity	$	333,936		$	276,493		$	192,335		$	168,431		$	178,458
Ratio Data at Year End (a)
Current ratio		4.6	x		4.3	x		4.0	x		3.6	x		5.7	x
Debt to equity ratio		49.9	%		53.5	%		71.2	%		94.5	%		85.8	%
Owned and Franchised Locations at Year End (a)
Pawn lending operations		452			405			409			417			426
Cash advance operations (c)		253			154			2			—			—
Check cashing operations (d)		134			135			135			134			132
Total		839			694			546			551			558

^(a) In September 2004, the Company sold its foreign pawn lending operations. The amounts for all periods presented have been reclassified to reflect the foreign operations as discontinued operations. In addition, in September 2001, the Company announced plans to exit the rent-to-own business. The amounts for the years 2000 through 2002 also reflect the reclassified rent-to-own business as discontinued operations.

(b)	See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Financial Statements and Supplementary Data” for amounts related to details of discontinued operations for years 2002 through 2004 and the gain from disposal of asset for 2003.
(c)	Includes only cash advance locations.
(d)	Mr. Payroll locations only.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

     The Company is a provider of specialty financial services to individuals in the United States. The Company offers secured non-recourse loans, commonly referred to as pawn loans, to individuals through its pawn lending operations. The pawn loan portfolio generates finance and service charges revenue. A related activity of the pawn lending operations is the disposition of merchandise, primarily collateral from unredeemed pawn loans. As an alternative to a pawn loan, the Company offers unsecured cash advances in selected lending locations and on behalf of third-party banks in other locations. The Company also provides check cashing and related financial services through many of its cash advance locations and through its franchised and company-owned check cashing centers. Prior to September 7, 2004, the Company also provided financial services to individuals in the United Kingdom and Sweden (the “foreign pawn lending operations”). The foreign pawn lending operations were sold to Rutland Partners LLP for approximately $112.9 million, consisting of cash and notes receivable valued at $8.0 million. See discussions of Discontinued Operations below and at Note 4 of Notes to Consolidated Financial Statements.

     In December 2004, the Company completed the acquisition of the pawn operating assets of Camco, Inc., which operated under the trade name “SuperPawn” in four states in the western United States. SuperPawn is a 41-store chain based in Las Vegas, Nevada. This transaction provided the Company its initial entry into the western United States for pawn lending activities. The aggregate purchase consideration and costs totaled $118.4 million, which consisted of $104.8 million in cash, 578,793 shares of the Company’s stock valued at $12.6 million and acquisition costs of $1.0 million. See Note 3 of Notes to Consolidated Financial Statements.

     Effective August 1, 2003, the Company, through its wholly-owned subsidiary, Cashland Financial Services, Inc. (“Cashland”), completed the purchase of substantially all of the assets of Cashland, Inc., a privately-owned consumer finance company based in Dayton, Ohio. The aggregate initial purchase consideration and costs totaled $50.5 million, which consisted of $32.0 million in cash, 1.5 million shares of the Company’s common stock valued at $16.8 million and acquisition costs of $1.7 million. The terms of the purchase included the potential for additional consideration to be paid based on the earnings performance of Cashland during the twelve months ending June 30, 2004. On February 2, 2004, the parties amended the purchase agreement to eliminate that provision and to provide instead for the Company to make a final payment of additional consideration in the amount of $5.4 million. The payment consisted of $2.9 million in cash and a subordinated note for $2.5 million which increased the final total purchase price to $55.9 million. See Notes 3 and 9 of Notes to Consolidated Financial Statements.

     As of December 31, 2004, the Company’s pawn lending operations consisted of 452 pawnshops, including 441 owned units and 11 unconsolidated franchised units in 21 states in the United States. For the three years ended December 31, 2004, the Company acquired 51 operating units, established 4 locations, and combined or closed 18 locations for a net increase in owned pawn lending units of 37. In addition, 5 franchise locations were acquired, 1 was opened, and 7 were either terminated and/or converted to Company-owned locations.

     At December 31, 2004, the Company’s cash advance operations consisted of 253 cash advance locations in 6 states. For the three year period ended December 31, 2004, the Company acquired 153 operating units, established 105 locations, and combined or closed 5 locations for a net increase in cash advance locations of 253.

     As of December 31, 2004, Mr. Payroll operated 128 franchised and 6 company-owned check cashing centers in 20 states.

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DISCONTINUED OPERATIONS

     In September 2004, in order to dedicate its strategic efforts and resources on the growth opportunities of its pawn lending and cash advance activities in the United States, the Company sold its foreign pawn lending operations in the United Kingdom and Sweden to Rutland Partners LLP for approximately $104.9 million cash after paying off the outstanding balance of the multi-currency line of credit, and notes receivable valued at $8.0 million. The Company realized a gain on the sale of $19.0 million ($15.4 million net of related tax). Additionally, in September 2001, the Company announced plans to exit the rent-to-own business in order to focus on its core business of lending activities. In June 2002, the Company sold the remaining assets of its “Rent-A-Tire” rent-to-own business. The results of the foreign pawn lending operations and the rent-to-own business have been reclassified as discontinued operations for all periods presented in accordance with the Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” in the accompanying consolidated financial statements. Income from discontinued operations was $6.5 million (excluding gain on the sale), $8.0 million, and $7.4 million for 2004, 2003 and 2002, respectively. See Note 4 of Notes to Consolidated Financial Statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

     Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements 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 dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, merchandise held for disposition, allowance for losses on cash advances, long-lived and intangible assets, income taxes, contingencies and litigation. Management bases its estimates on historical experience, empirical data and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. The development and selection of the critical accounting policies and the related disclosures below have been reviewed with the Audit Committee of the Board of Directors.

     Management believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

Finance and service charges revenue recognition. The Company accrues finance and service charges revenue only on those pawn loans that the Company deems collectible based on historical loan redemption statistics. Pawn loans written during each calendar month are aggregated and tracked for performance. Loan transactions may conclude based upon redemption, renewal, or forfeiture of the loan collateral. The gathering of this empirical data allows the Company to analyze the characteristics of its outstanding pawn loan portfolio and estimate the probability of collection of finance and service charges. In the event the future actual performance of the loan portfolio differs significantly (positively or negatively) from expectations, revenue for the next reporting period would be likewise affected.

     Due to the short-term nature of pawn loans, the Company is able to quickly identify performance trends. For 2004, $109.4 million, or 99.0%, of recorded finance and service charges represented cash collected from customers and the remaining $1.1 million, or 1.0%, represented an increase in the finance and service charges receivable during the year. At the end of the current year and based on the revenue recognition method described above, the Company had accrued $20.5 million of finance and service charges receivable. Assuming the year-end accrual of finance and service charges revenue was over estimated by 10%, finance and service charges revenue would decrease by $2.0 million in 2005 and net income would

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decrease by $1.3 million. Some or all of the decrease would potentially be mitigated through the profit on the disposition of the related forfeited loan collateral.

Merchandise held for disposition. Merchandise held for disposition consists primarily of forfeited collateral from pawn loans not repaid. The carrying value of the forfeited collateral is stated at the lower of cost (cash amount loaned) or market. Management provides an allowance for shrinkage and valuation based on its evaluation of the merchandise. Because pawn loans are made without the borrower’s personal liability, the Company does not investigate the creditworthiness of the borrower, but evaluates the pledged personal property as a basis for its lending decision. The amount the Company is willing to finance is typically based on a percentage of the pledged personal property’s estimated disposition value. The sources for the Company’s determination of the estimated disposition value are numerous and include the Company’s automated product valuation system as well as catalogues, “blue books”, newspapers, internet research and previous experience with similar items. The Company performs a physical count of its merchandise in each location on a cyclical basis and reviews the composition of inventory by category and age in order to assess the adequacy of the allowance, which was $1.4 million, representing 2.2% of the balance of merchandise held for disposition at December 31, 2004. Adverse changes in the disposition value of the Company’s merchandise may result in the need to increase the valuation allowance.

Allowance for losses on cash advances. The Company maintains an allowance for losses on Company-owned cash advances (including fees and interest) and accrues losses for bank-owned cash advances at a level estimated to be adequate to absorb credit losses in the outstanding combined cash advance portfolio. The Company’s cash advance product primarily services a customer base of non-prime borrowers. These advances are typically offered for a term of 7 to 45 days. Cash advances written during each calendar month are aggregated and tracked to develop a performance history. The Company stratifies the outstanding portfolio by age, delinquency and stage of collection when assessing the adequacy of the allowance for losses. Current portfolio performance as well as the performance of cash advances made in the same period twelve months ago and collection history are utilized to develop expected loss rates which are used for the establishment of the allowance. Increased defaults and credit losses may occur during a national or regional economic downturn, or could occur for other reasons, resulting in the need to increase the allowance. Unlike pawn loans, cash advances are unsecured, and the performance of the portfolio depends on the Company’s ability to collect on defaulted loans. The Company believes it effectively manages the risks inherent in this product by utilizing a variety of underwriting criteria, maintaining a customer database of performance and by closely monitoring the performance of the portfolio. Any remaining unpaid balance of a cash advance is charged off once it becomes 60 days past due, or sooner if deemed uncollectible. At December 31, 2004, allowance for losses on cash advances was $4.4 million and accrued losses on bank owned cash advances were $0.3 million, in aggregate representing 9.1% of the combined cash advance portfolio.

     During fiscal year 2004, the cash advance loss provision for the combined cash advance portfolio, which increases the allowance for loan losses, was $23.5 million and reflects 3.6% of gross combined cash advances written by the Company and third-party banks. Assuming future loss rates increased, or decreased, by 10% (0.36%) for 2004, the cash advance loss provision would increase, or decrease, by $2.3 million and net income would decrease, or increase, by $1.5 million, assuming the same volume of cash advances written in 2004.

     Valuation of long-lived and intangible assets. The Company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Intangible assets having an indefinite useful life are tested for impairment annually, or more frequently if events or changes in circumstances indicate that the assets might be impaired. Factors considered important which could trigger an impairment review include significant underperformance relative to expected historical or projected future cash flows, significant changes in the manner of use of the acquired assets or the strategy for the overall business, and significant negative industry trends. When management determines that the carrying value of long-lived and intangible assets may not be recoverable, impairment is measured based on the excess of the assets’ carrying value over the estimated fair value.

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Income Taxes. As part of the process of preparing the consolidated financial statements, the Company is required to estimate income taxes in each of the jurisdictions in which it operates. This process involves estimating the actual current tax exposure together with assessing temporary differences in recognition of income for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within the Company’s consolidated balance sheet. Management must then assess the likelihood that the deferred tax assets will be recovered from future taxable income and, to the extent it believes that recovery is not likely, it must establish a valuation allowance. An expense, or benefit, must be included within the tax provision in the statement of operations for any increase, or decrease, in the valuation allowance for a given period.

     Management judgment is required in determining the provision for income taxes, the deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets. The Company has recorded a valuation allowance of $0.2 million as of December 31, 2004, due to uncertainties related to the ability to utilize the deferred tax assets resulting from capital losses. The valuation allowance is based on Company estimates of capital gains expected to be recognized during the period over which the capital losses may be used to offset such gains. In the event that the Company determined that it would not be able to realize all or part of its other net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to provision for income taxes in the period that such determination was made. Likewise, should the Company determine that it would be able to realize its deferred tax assets in the future in excess of the net recorded amount, an adjustment to the deferred tax assets would reduce the provision for income taxes in the period that such determination was made.

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RESULTS OF CONTINUING OPERATIONS

     The following table sets forth the components of consolidated statements of operations as a percentage of total revenue for the periods indicated.

	Year Ended December 31,
	2004			2003			2002
Revenue
Finance and service charges		23.6	%		25.9	%		27.0	%
Proceeds from disposition of merchandise		53.3			60.7			66.6
Cash advance fees		21.1			12.1			5.4
Check cashing royalties and fees		2.0			1.3			1.0
Total Revenue		100.0			100.0			100.0
Cost of Revenue
Disposed merchandise		32.8			37.9			43.4
Net Revenue		67.2			62.1			56.6
Expenses
Operations		36.9			36.7			35.9
Cash advance loss provision		5.0			2.8			1.9
Administration		8.5			8.4			7.3
Depreciation and amortization		3.7			3.4			3.6
Total Expenses		54.1			51.3			48.7
Income from Operations		13.1			10.8			7.9
Interest expense		1.7			2.3			2.6
Interest income		(0.1	)		(0.1	)		(0.2	)
Foreign currency transaction gains		(0.2	)		—			—
Gain from disposal of asset		—			(0.3	)		—
Income from Continuing Operations before Income Taxes		11.7			8.9			5.5
Provision for income taxes		4.3			3.2			2.1
Income from Continuing Operations		7.4	%		5.7	%		3.4	%

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     The following table sets forth certain selected consolidated financial and non-financial data as of December 31, 2004, 2003 and 2002, and for each of the three years then ended ($ in thousands) related to the Company’s continuing operations.

	Year Ended December 31,
	2004			2003			2002
PAWN LENDING OPERATIONS:
Pawn loans
Annualized yield on pawn loans		131.1	%		128.4	%		126.0	%
Total amount of pawn loans written and renewed	$	336,021		$	313,264		$	302,911
Average pawn loan balance outstanding	$	84,283		$	78,432		$	74,969
Average pawn loan balance per average location in operation	$	211		$	199		$	187
Average pawn loan amount at end of year (not in thousands)	$	89		$	86		$	84
Profit margin on disposition of merchandise as a percentage of proceeds from disposition of merchandise		38.5	%		37.5	%		34.8	%
Average annualized merchandise turnover		3.0x			3.1x			2.9x
Average balance of merchandise held for disposition per average location in operation	$	130		$	122		$	130
Pawnshop locations in operation –
Beginning of year, owned		398			396			404
Acquired		42			7			2
Start-ups		3			1			—
Combined or closed		(2	)		(6	)		(10	)
End of year, owned		441			398			396
Franchise locations at end of year		11			7			13
Total pawnshop locations at end of year		452			405			409
Average number of owned pawnshop locations in operation		399			394			400
Cash advances
Total amount of cash advances written (a)	$	220,203		$	172,667		$	123,677
Number of cash advances written (not in thousands) (a)		675,008			584,690			435,079
Average amount per cash advance (not in thousands) (a)	$	326		$	295		$	284
Combined cash advances outstanding (a)	$	18,318		$	13,612		$	12,116
Cash advances outstanding per location at end of year (a)	$	43		$	35		$	31
Cash advances outstanding before allowance for losses (b)	$	11,301		$	11,961		$	3,958
Locations offering cash advances at end of year		425			390			389
Average number of locations offering cash advances		391			385			390
CASH ADVANCE OPERATIONS (c):
Total amount of cash advances written (a)	$	427,443		$	127,851		$	28
Number of cash advances written (not in thousands) (a)		1,252,177			380,770			81
Average amount per cash advance (not in thousands) (a)	$	341		$	336		$	346
Combined cash advances outstanding (a)	$	33,352		$	20,045		$	23
Cash advances outstanding per location at end of year (a)	$	132		$	130		$	12
Cash advances outstanding before allowance for losses (b)	$	29,547		$	19,833		$	—
Cash advance locations in operation –
Beginning of year		154			2			—
Acquired		32			121			—
Start-ups		72			31			2
Combined or closed		(5	)		—			—
End of year		253			154			2
Average number of cash advance locations in operation		192			70			—

(Continued on Next Page)

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	Year Ended December 31,
	2004			2003			2002
CHECK CASHING OPERATIONS (Mr. Payroll) (d):
Face amount of checks cashed	$	1,132,627		$	1,089,364		$	1,041,434
Gross fees collected	$	15,660		$	15,266		$	14,708
Fees as a percentage of checks cashed		1.4	%		1.4	%		1.4	%
Average check cashed (not in thousands)	$	372		$	358		$	349
Centers in operation at end of year		134			135			135
Average centers in operation for the year		135			136			135

(a)	Includes cash advances made by the Company and cash advances made by third-party banks offered at the Company’s locations.
(b)	Amounts recorded in the Company’s consolidated financial statements.
(c)	Includes only cash advance locations.
(d)	Includes franchised and company-owned locations.

OVERVIEW

Components of Consolidated Net Revenue. Consolidated net revenue is total revenue reduced by the cost of merchandise sold in the period. It represents the income available to satisfy expenses and is the measure management uses to evaluate top line performance. The growth in cash advance fees due to higher balances and the addition of new units, including the acquisition of Cashland in August 2003, has increased the comparative contribution from this product to the consolidated net revenue of the Company during 2004 compared to 2003 and 2002. While trending lower as a percent of total net revenue, pawn related net revenue, consisting of aggregate finance and service charges plus profit on the disposition of merchandise, remains the dominant source of net revenue at 65.6%, 78.5% and 88.6% for 2004, 2003 and 2002, respectively. The following graphs show consolidated net revenue and depict the mix of the components of net revenue for the years ended December 31, 2004, 2003 and 2002:

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Contribution to Increase in Net Revenue. Cash advance fees have increased since 2002 as the result of the growth and development of newly opened units, the inclusion of Cashland since August 1, 2003, and the higher average cash advance balances. As illustrated below, these increases represented 65.1% of the Company’s overall increase in net revenue from 2002 to 2003 and 70.2% of the overall increase from 2003 to 2004. The increase in pawn related net revenue in the aggregate, combined finance and service charges and profit from the disposition of merchandise, declined from 31.6% to 23.7% of the increase in net revenue from continuing operations for 2004 compared to 2003. Check cashing royalties and fees accounted for 6.1% and 3.3% of the increase in net revenue in 2004 and 2003, respectively. These trends are depicted in the following graphs:

Year Ended 2004 Compared to Year Ended 2003

Consolidated Net Revenue. Consolidated net revenue is total revenue reduced by the cost of merchandise sold in the period. It represents the income available to satisfy expenses and is the measure management uses to evaluate top line performance. Consolidated net revenue increased $74.4 million, or 30.8%, to $315.6 million during 2004 from $241.2 million during 2003. The following table sets forth 2004 and 2003 net revenue by operating segment ($ in millions):

	2004		2003		Increase
Pawn lending operations	$	239.9	$	216.3	$	23.6	10.9	%
Cash advance operations		72.1		21.3		50.8	238.5
Check cashing operations		3.6		3.6		—	—
Consolidated net revenue	$	315.6	$	241.2	$	74.4	30.8	%

     The increase in consolidated net revenue was partially due to the consolidation of the operating results of Cashland for the entire year for 2004 as compared to only five months for 2003. Excluding the impact of Cashland, net revenue for 2004 was up $31.0 million, or 14.0%, compared to 2003. Higher revenue from the Company’s cash advance product, higher finance and service charges from pawn loans, and higher profit from the disposition of merchandise accounted for the increase in net revenue.

     The components of net revenue are finance and service charges from pawn loans, which increased $9.8 million; profit from the disposition of merchandise, which increased $7.9 million; cash advance fees

25

generated both from pawn locations and cash advance locatons, which increased $52.2 million; and check cashing royalties and fees, which increased $4.5 million.

Finance and Service Charges. Finance and service charges increased $9.8 million, or 9.8%, from $100.7 million in 2003 to $110.5 million in 2004. An increase in the average balance of pawn loans outstanding contributed $7.5 million of the increase and the higher annualized yield of the pawn loan portfolio resulted in $2.3 million of the increase.

     The average balances of pawn loans were 7.5% higher in 2004 than in 2003. The increase in the average balance of pawn loans outstanding was driven by a 4.3% increase in the average number of pawn loans outstanding during 2004 coupled with a 3.0% increase in the average amount per loan. Management believes the higher average pawn loan balance outstanding is partially attributable to the current economic environment affecting the Company’s customers, which was conducive to an increase in loan demand, and expects this trend of higher demand for pawn loans to continue in 2005. Pawn loan balances at December 31, 2004 were $28.2 million, or 34.7% higher than at December 31, 2003, principally as a result of the acquisition of SuperPawn in December 2004. Annualized loan yield was 131.1% in 2004, compared to 128.4% in 2003. Favorable changes in the statutory rates and terms of pawn loans in some markets and improved performance of the pawn loan portfolio, including higher redemption rates and a slightly higher concentration of extended or renewed loans in the portfolio, contributed to the higher yield.

Profit from the Disposition of Merchandise. Profit from the disposition of merchandise represents the proceeds received from the disposition of merchandise in excess of the cost of disposed merchandise. The following table summarizes the proceeds from the disposition of merchandise and the related profit for 2004 as compared to 2003 ($ in millions):

	Year Ended December 31,
	2004									2003
	Merchan-			Refined						Merchan-			Refined
	dise			Gold			Total			dise			Gold			Total
Proceeds from disposition	$	208.6		$	41.7		$	250.3		$	202.3		$	33.7		$	236.0
Profit on disposition	$	83.4		$	13.0		$	96.4		$	79.0		$	9.6		$	88.6
Profit margin		40.0	%		31.2	%		38.5	%		39.1	%		28.5	%		37.5	%

     Total profit from the disposition of merchandise and refined gold increased $7.8 million, or 8.8%, due to higher profit margins on the disposition of merchandise (from 37.5% in 2003 to 38.5% in 2004) and a 6.1% increase in total proceeds from the disposition of merchandise. Excluding the effect of the disposition of refined gold, the profit margin on the disposition of merchandise increased to 40.0% in 2004 from 39.1% in 2003 due predominately to a heavier mix of jewelry sales. The profit margin on the disposition of refined gold was 31.2% in 2004 compared to 28.5% in 2003 due to the prevailing higher market prices of refined gold in 2004 than in 2003. Proceeds from disposition of merchandise, excluding refined gold, increased $6.3 million for 2004 due to higher levels of merchandise available for disposition and the acquisition of the SuperPawn stores in December 2004. Proceeds from disposition of refined gold increased $8.0 million, or 23.7%, due to higher market prices for gold and an increase in the volume of refined gold sold. The consolidated merchandise turnover rate decreased slightly to 3.0 times during 2004 from 3.1 times during 2003.

     Management anticipates that profit margin on the disposition of merchandise in the near term is likely to remain at or around current levels. Higher levels of merchandise available for disposition over the long term could result in lower profit margins which is generally offset by higher proceeds. The addition of SuperPawn operating results in 2005 should increase the average profit margin slightly due to a higher amount of jewelry sales which has historically produced higher gross profit margins. However, the increases in jewelry merchandise levels could reduce inventory turnover.

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Cash Advance Fees. Cash advance fees increased $52.2 million to $99.2 million in 2004 as compared to $47.0 million in 2003, an increase of 111.1%. The increase was primarily due to the growth and development of new cash advance units and the inclusion of Cashland for the full year in 2004, while only five months of operating results of Cashland were included in 2003. Higher average cash advance balances outstanding during 2004 from new unit growth and from the acquisition of 32 California units during the third quarter also contributed to the increase in cash advance fees. As of December 31, 2004, the product was available in 678 lending locations, which included 425 pawnshops, and 253 cash advance locations. This included 366 units that offer the product on behalf of third-party banks for which the Company performs administrative services. Cash advance fees include revenue from the cash advance portfolio owned by the Company and fees for administrative services performed for the banks. See further discussion in Note 5 of Notes to Consolidated Financial Statements. (Although cash advance transactions may take the form of loans or deferred check deposit transactions, the transactions are referred to throughout this discussion as “cash advances” for convenience.)

     The following table sets forth cash advance fees by operating segment for the years ended December 31, 2004 and 2003 ($ in thousands):

	2004		2003		Increase
Cash advance operations	$	66.2	$	20.0	$	46.2	231.0	%
Pawn lending operations		33.0		27.0		6.0	22.2
Total	$	99.2	$	47.0	$	52.2	111.1	%

     The amount of cash advances written increased $347.1 million, or 115.5% to $647.6 million in 2004 from $300.5 million in 2003. Included in the amount of cash advances written in 2004 and 2003 were $238.9 million and $157.5 million, respectively, extended to customers by the banks. The average amount per cash advance increased to $336 from $311 due to changes in permitted loan amounts and adjustments to underwriting. The combined Company and bank portfolio of cash advances generated $106.6 million in revenue during 2004 compared to $51.2 million in 2003. The outstanding combined portfolio balance of cash advances increased $18.0 million, or 53.4%, to $51.7 million at December 31, 2004 from $33.7 million at December 31, 2003. Included in these amounts are $40.8 million and $31.8 million for 2004 and 2003, respectively, that are included in the Company’s consolidated balance sheets. An allowance for losses of $4.4 million and $3.4 million has been provided in the consolidated financial statements for December 31, 2004 and 2003, respectively, which is netted against the outstanding cash advance amounts on the Company’s consolidated balance sheets.

     Management anticipates continued growth in cash advance fees for fiscal 2005 due to increased consumer awareness and demand for the cash advance product, higher outstanding balances at December 31, 2004 compared to December 31, 2003, and the growth of balances from new units opened in 2003, 2004, and planned openings in 2005.

Check Cashing Royalties and Fees. Check cashing fees for Mr. Payroll remained constant at $3.6 million in 2004. Check cashing revenue for Cashland for 2004 and 2003 was $5.8 million and $1.4 million, respectively. The increase in fees for Cashland is due to the inclusion of the entire year for 2004 and the growth in the units. Cash America Payday Advance contributed $0.1 million of the increase during 2004.

Operations and Administration Expenses. Consolidated operations and administration expenses, as a percentage of total revenue, was 45.4% in 2004 compared to 45.1% in 2003. These expenses increased $38.1 million, or 21.7%, in 2004 compared to 2003. Pawn lending and Cash America Payday Advance operating expenses increased $11.9 million, or 7.4%, primarily as a result of the net increase of 43 owned pawnshop locations and 59 Cash America Payday Advance locations. Slightly higher staffing levels and increased advertising expenditures for the cash advance product also contributed to the expense increase. Cashland accounted for $26.1 million of the increase as a result of the establishment of 40 cash advance locations net of 5 closures and an additional seven months of expenses included for 2004 as compared to

27

2003 due to the acquisition on August 1, 2003. Mr. Payroll accounted for the remaining $0.1 million increase.

     As a multi-unit operator in the consumer finance industry, the Company’s operations and administration expenses are predominately related to personnel and occupancy expenses. Personnel expenses include base salary and wages, performance incentives, and benefits. Occupancy expenses include rent, property taxes and insurance, utilities, and maintenance. The combination of personnel and occupancy expenses represents 82.0% of total operations and administration expenses in 2004 and 83.8% in 2003. The comparison is as follows ($ in millions):

			% of					% of
	2004		Revenue			2003		Revenue
Personnel	$	127.1		27.1	%	$	105.9		27.2	%
Occupancy		48.1		10.2			41.1		10.6
Other		38.3		8.1			28.3		7.3
Total	$	213.5		45.4	%	$	175.3		45.1	%

     Of the $21.2 million, or 20.0%, increase in personnel expense from 2003 to 2004, $14.3 million is attributable to the addition of Cashland for twelve months in 2004 versus five months in 2003. The balance of the increase is due to unit additions during the year, an increase in staffing levels, slightly higher incentive expenses as a result of increased operating results, and normal recurring salary adjustments. Of the $7.0 million, or 17.0%, increase in occupancy expenses from 2003 to 2004, $5.1 million is due to the addition of Cashland for twelve months in 2004 versus five months in 2003. The balance of the increase is primarily due to unit additions.

Cash Advance Loss Provision. The Company maintains an allowance for losses on cash advances at a level projected to be adequate to absorb credit losses inherent in the outstanding combined cash advance portfolio. The cash advance loss provision is utilized to increase the allowance carried against the outstanding company owned cash advance portfolio and accrued losses on the bank owned portfolios. The cash advance loss provision increased $12.7 million to $23.5 million in 2004, compared to $10.8 million in 2003, principally due to the significant increase in the size of the portfolio and the inclusion of Cashland for the full year in 2004, while only five months of operating results were included in 2003. Cashland provided $12.7 million and $3.9 million of the 2004 and 2003 loss provisions, respectively. The loss provision as a percentage of cash advance fees increased to 23.7% in the current year from 22.9% in the prior year. The increase in the loss provision as a percentage of cash advance fees is attributable to an emphasis on broadening the customer base for the payday loan product offered in pawnshops. On average, cash advance locations tend to originate more advances and experience lower loss rates than cash advances originated at pawnshop locations. Management expects that the addition of more cash advance locations will continue this trend.

Depreciation and Amortization. Depreciation and amortization expense as a percentage of total revenue was 3.7% in 2004 compared to 3.4% in 2003. Total depreciation and amortization expenses increased $3.9 million, or 29.3%, primarily due to the increase in operating locations and the amortization of intangibles such as non-competition agreements and customer relationships acquired in the Cashland and other acquisitions.

Interest Expense. Interest expense as a percentage of total revenue declined to 1.7% in 2004 from 2.3% in 2003. Interest expense decreased $0.7 million, or 8.0%, to $8.1 million in 2004 as compared to $8.8 million in 2003. The decrease was due to the lower debt balances outstanding as a result of the repayment of the outstanding U.S. line of credit upon the sale of the foreign pawn lending operations. The effective blended borrowing cost was 6.3% in 2004 and 6.1% in 2003 as a result of the increase in short-term borrowing rates. The average amount of debt outstanding decreased during 2004 to $130.0 million from $145.4 million during 2003.

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Interest Income. Interest income increased $0.3 million from $0.3 million in 2003 to $0.6 million in 2004, primarily due to the interest income totaling $0.5 million recorded on the subordinated notes received in the sale of the Company’s foreign pawn lending operations.

Foreign Currency Transaction Gains. The Company received two notes receivable denominated in Swedish kronor in the sale of the Company’s foreign pawn lending operations. Exchange rate changes between the United States dollar and the Swedish kronor resulted in gains of $1.1 million in 2004.

Gain from Disposal of Asset. During 2003, the Company sold real estate that was being held for investment purposes following the reconstruction of the corporate headquarters. The Company received cash proceeds of $1.6 million and realized a gain of $1.0 million.

Income Taxes. The Company’s effective tax rate for continuing operations for 2004 was 36.5% as compared to 35.8% for 2003. The Company’s consolidated effective tax rate for 2003 was affected by a reduction in the deferred tax valuation allowance for capital losses as a result of the recognition of the capital gain from the sale of real estate held for investment. The effective tax rate for 2003 would have been 37.3% excluding the gain and the related tax effect.

Income from Continuing Operations. Income from continuing operations was $35.0 million and $22.0 million for 2004 and 2003, respectively, up 59.1%. Diluted income from continuing operations per share was $1.18 for 2004, as compared to $0.83 for 2003, reflecting a 42.2% increase. Excluding the gain of $1.0 million from the sale of the asset ($1.1 million after income tax benefit), diluted income from continuing operations was $0.78 per share for 2003.

Year Ended 2003 Compared to Year Ended 2002

Consolidated Net Revenue. Consolidated net revenue increased $42.8 million, or 21.6%, to $241.2 million during 2003 from $198.4 million during 2002. The following table sets forth 2003 and 2002 net revenue by operating segment ($ in millions):

					Increase/
	2003		2002		(decrease)
Pawn lending operations	$	216.3	$	194.9	$	21.4	11.0	%
Cash advance operations		21.3		—		21.3	—
Check cashing operations		3.6		3.5		0.1	2.9
Consolidated net revenue	$	241.2	$	198.4	$	42.8	21.6	%

     The increase in consolidated net revenue was partially due to the acquisition of Cashland on August 1, 2003 and the inclusion of their operating results for five months in 2003. Excluding the impact of Cashland, net revenue for 2003 was up $22.8 million, or 11.5%, compared to 2002. The Company’s lending operations contributed the majority of the increase in consolidated net revenue excluding Cashland. Higher revenue from the Company’s cash advance product being offered in pawn locations, higher finance and service charges from pawn loans, and higher profit from the disposition of merchandise accounted for the increase in net revenue.

     The components of net revenue are finance and service charges from pawn loans, which increased $6.2 million; profit from the disposition of merchandise, which increased $7.3 million; cash advance fees, which increased $27.9 million; and check cashing royalties and fees, which increased $1.4 million.

Finance and Service Charges. Finance and service charges increased $6.2 million, or 6.6%, from $94.5 million in 2002 to $100.7 million in 2003. An increase in the average balance of pawn loans outstanding contributed $4.3 million of the increase and the higher annualized yield of the pawn loan portfolio resulted in $1.9 million of the increase.

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     The average balances of pawn loans were 4.6% higher in 2003 than in 2002. The increase in the average balance of pawn loans outstanding was driven by a 2.8% increase in the average number of pawn loans outstanding during 2003 coupled with a 1.8% increase in the average amount per loan. Management believes the higher average pawn loan balance outstanding is partially attributable to adverse trends in the U.S. economy, which were conducive to an increase in loan demand. As management expected, during the third quarter of 2003, the pawn lending operations experienced a slow down in the rate of growth of pawn loan balances due to the advance child tax credit payments distributed by the Internal Revenue Service to certain customers. Management believes that customers may have used these proceeds to repay loans and/or reduce demand for loans in that quarter. Pawn loan balances at December 31, 2003 were $2.5 million, or 3.2% higher than at December 31, 2002 mostly due to unit additions during 2003. Annualized loan yield was 128.4% in 2003, compared to 126.0% in 2002. Improved performance of the pawn loan portfolio, including higher redemption rates and a slightly higher concentration of extended or renewed loans in the portfolio, contributed to the higher yield.

Profit from the Disposition of Merchandise. Profit from the disposition of merchandise represents the proceeds received from the disposition of merchandise in excess of the cost of disposed merchandise. The following table summarizes the proceeds from the disposition of merchandise and the related profit for 2003 as compared to 2002 ($ in millions):

	Year Ended December 31,
	2003									2002
	Merchan-			Refined						Merchan-			Refined
	dise			Gold			Total			dise			Gold			Total
Proceeds from disposition	$	202.3		$	33.7		$	236.0		$	206.8		$	26.6		$	233.4
Profit on disposition	$	79.0		$	9.6		$	88.6		$	76.6		$	4.7		$	81.3
Profit margin		39.1	%		28.5	%		37.5	%		37.0	%		17.7	%		34.8	%

     Profit from the disposition of merchandise and refined gold increased $7.3 million, or 9.0%, due to higher profit margins on the total disposition of merchandise (from 34.8% in 2002 to 37.5% in 2003). Excluding the effect of the disposition of refined gold, the profit margin on the disposition of merchandise increased to 39.1% in 2003 from 37.0% in 2002 due predominately to lower levels of aged merchandise and the lower average cost of merchandise sold. Proceeds from disposition of merchandise, excluding refined gold, decreased $4.5 million for 2003 due to lower average balances of merchandise available for disposition. The profit margin on the disposition of refined gold was 28.5% in 2003 compared to 17.7% in 2002 due to the prevailing higher market prices of refined gold in 2003 than in 2002. Proceeds from disposition of refined gold increased $7.1 million, or 26.7%, due to higher market prices for gold and an increase in the volume of refined gold sold. The consolidated merchandise turnover rate increased to 3.1 times during 2003 from 2.9 times during 2002.

Cash Advance Fees. Cash advance fees increased $27.9 million to $47.0 million in 2003 as compared to $19.1 million in 2002, an increase of 146.1%. The increase was primarily due to the addition of the operating results of Cashland beginning August 1, 2003. Excluding the impact of Cashland, cash advance fees for 2003 were $28.3 million, up $9.2 million, or 48.2%, due to higher average cash advance balances outstanding during 2003 resulting from higher demand for the cash advance product. The Company introduced cash advances to its broad group of locations in 2000. The product was available in 544 U.S. lending locations, which included 390 pawnshop locations and 154 cash advance locations. This included 304 units that offer the product on behalf of a third-party bank for which the Company performs administrative services. Cash advance fees include revenue from the cash advance portfolio owned by the Company and fees for administrative services performed for the bank. During the first quarter of 2003, the Company terminated its relationship with the national bank that had offered this product in many of its stores and entered into an agreement with a state chartered bank to offer the product in those stores.

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     The following table sets forth cash advance fees by operating segment for the years ended December 31, 2003 and 2002 ($ in thousands):

	2003		2002		Increase
Cash advance operations	$	20.0	$	—	$	20.0	—	%
Pawn lending operations		27.0		19.1		7.9	41.1
Total	$	47.0	$	19.1	$	27.9	146.1	%

     Excluding the cash advance activities of Cashland, the amount of cash advances written increased $58.1 million, or 47.0%, to $181.8 million in 2003 from $123.7 million in 2002. Included in the amount of cash advances written in 2003 and 2002 were $157.5 million and $106.1 million, respectively, extended to customers by the bank. The average amount per cash advance increased to $297 from $284. The combined Company and bank portfolio of cash advances generated $32.5 million in revenue during 2003 compared to $21.7 million in 2002. The outstanding combined portfolio balance of cash advances increased $2.9 million to $15.0 million at December 31, 2003 from $12.1 million at December 31, 2002. Included in these amounts are $13.2 million and $4.0 million for 2003 and 2002, respectively, that are included in the Company’s consolidated balance sheets. An allowance for losses of $1.5 million and $1.7 million has been provided in the consolidated financial statements for December 31, 2003 and 2002, respectively, which offsets the outstanding cash advance amounts from these activities.

     The amount of cash advances written by Cashland for the period from August 1, 2003 through December 31, 2003 was $118.7 million. The average amount per cash advance was $336. Cashland generated cash advance fees of $18.7 million during the five-month period. At December 31, 2003, the Company’s consolidated balance sheet included an outstanding portfolio of $16.7 million, net of an allowance for losses of $1.9 million, related to activities of Cashland.

Check Cashing Royalties and Fees. Check cashing fees for Mr. Payroll increased $0.1 million in 2003. Check cashing revenue for Cashland for the period from August 1, 2003 through December 31, 2003 was $1.4 million.

Operations and Administration Expenses. Consolidated operations and administration expenses, as a percentage of total revenue, were 45.1% in 2003 compared to 43.2% in 2002. These expenses increased $23.9 million, or 15.8%, in 2003 compared to 2002. Pawn lending expenses increased $12.0 million, or 8.0%, as a result of higher expenses related to the cash advance product, including advertising and the establishment of 17 new locations and increased incentive expenses associated with the improvement in operating results. Slightly higher staffing levels also contributed to the increase in pawn lending operating expenses. The addition of Cashland beginning August 1, 2003 contributed $11.7 million of the increase. Mr. Payroll’s expenses increased $0.2 million.

     As a multi-unit operator in the consumer finance industry, the Company’s operations and administration expenses are predominately related to personnel and occupancy expenses. Personnel expenses include base salary and wages, performance incentives, and benefits. Occupancy expenses include rent, property taxes and insurance, utilities, and maintenance. The combination of personnel and occupancy expenses represents 83.8% of total operations and administration expenses in 2003 and 85.6% in 2002. The comparison is as follows ($ in millions):

			% of					% of
	2003		Revenue			2002		Revenue
Personnel	$	105.9		27.2	%	$	91.8		26.2	%
Occupancy		41.1		10.6			37.7		10.7
Other		28.3		7.3			21.9		6.3
Total	$	175.3		45.1	%	$	151.4		43.2	%

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     Of the $14.1 million, or 15.4%, increase in personnel expense, $6.2 million is attributable to the addition of Cashland in August 2003. The balance of the increase is due to unit additions during the year, higher incentive expenses as a result of the improved operating results, an increase in staffing levels, and normal recurring salary adjustments. Of the $3.4 million, or 9.0%, increase in occupancy expenses, $2.4 million is due to the addition of Cashland. The balance of the increase is primarily due to unit additions.

Cash Advance Loss Provision. The cash advance loss provision increased $4.1 million to $10.8 million in 2003, compared to $6.7 million in 2002, principally due to the acquisition of Cashland at August 1, 2003 and the significant increase in the size of the portfolio. Cashland provided $3.9 million of the 2003 loss provision. The loss provision as a percentage of cash advance fees decreased to 22.9% in the current year from 35.0% in the prior year. The decrease in the loss provision as a percentage of cash advance fees is due to lower loss rates experienced by the Company in the current year compared to the prior year. The Company continued to improve its collection performance in 2003. Also, the addition of Cashland for a partial year reduced the percentage of loss provision to cash advance fees due to their lower loss experience. The loss provision as a percentage of cash advance fees would have been 24.1% for the current year without Cashland. See Note 5 of Notes to Consolidated Financial Statements.

Depreciation and Amortization. Depreciation and amortization expense as a percentage of total revenue was 3.4% in 2003 compared to 3.6% in 2002. Total depreciation and amortization expenses increased $0.8 million, or 6.3%, primarily due to the addition of Cashland beginning in August 2003.

Interest Expense. Interest expense as a percentage of total revenue declined to 2.3% in 2003 from 2.6% in 2002. Interest expense decreased $0.2 million, or 2.2%, to $8.8 million in 2003 as compared to $9.0 million in 2002. Lower interest rates on floating rate debt and lower debt balances outstanding prior to the acquisition of Cashland on August 1, 2003 contributed to the decrease. The Company obtained cash of $32.0 million for the acquisition of Cashland through the expansion of its U.S. line of credit from $90.0 million to $135.0 million. The effective blended borrowing cost was 6.1% in 2003 and 5.9% in 2002. The increase in blended borrowing cost was partially due to the Company’s issuance of $42.5 million of long-term fixed rate notes in July 2002 that replaced lower cost floating rate debt.

Interest Income. Interest income decreased $0.2 million, from $0.5 million in 2002 to $0.3 million in 2003. The decrease is primarily due to the elimination of interest income from notes receivable repaid during 2003.

Loss from Derivative Valuation Fluctuations. There were no adjustments to the fair value of interest rate cap agreements during 2003, as compared to a loss of $0.2 million in 2002. See Note 14 of Notes to Consolidated Financial Statements.

Gain from Disposal of Asset. During 2003, the Company sold real estate that was being held for investment purposes following the reconstruction of the corporate headquarters. The Company received cash proceeds of $1.6 million and realized a gain of $1.0 million.

Income Taxes. The Company’s effective tax rate for 2003 was 35.8% as compared to 38.3% for 2002. The Company’s consolidated effective tax rate for 2003 was affected by a reduction in the deferred tax valuation allowance for capital losses as a result of the recognition of the capital gain from the sale of real estate held for investment. The effective tax rate for 2003 would have been 37.3% excluding the gain and the related tax effect.

Income from Continuing Operations. Income from continuing operations was $22.0 million and $11.9 million for 2003 and 2002, respectively. Diluted income from continuing operations per share was $0.83 for 2003, as compared to $0.48 for 2002. Excluding the gain of $1.0 million from the sale of asset ($1.1 million after income tax benefit), diluted income from continuing operations was $0.78 per share for 2003.

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LIQUIDITY AND CAPITAL RESOURCES

     The Company’s cash flows and other key indicators of liquidity are summarized as follows ($ in millions):

	Year Ended December 31,
	2004			2003			2002
Operating activities cash flows	$	80.7		$	69.8		$	39.4
Investing activities cash flows:
Pawn loans		(10.3	)		(5.1	)		0.1
Cash advances		(28.4	)		(23.6	)		(7.2	)
Acquisitions		(122.4	)		(45.5	)		(1.0	)
Proceeds from sale of subsidiaries/non-operating asset		104.9			1.6			—
Property and equipment additions		(28.5	)		(16.0	)		(9.1	)
Financing activities cash flows		7.2			28.5			(25.4	)
Working capital, excluding discontinued operations	$	209.5		$	156.1		$	118.6
Current ratio		4.6	x		4.3	x		4.0	x
Debt/EBITDA 1		2.1	x		2.7	x		3.4	x
Merchandise turnover		3.0	x		3.1	x		2.9	x

¹ Debt/EBITDA is a “non-GAAP” measure of liquidity. For the purpose of this analysis, EBITDA is calculated as follows:

          Income from operations + depreciation and amortization

Management views this ratio as an important measure of liquidity. This term is commonly recognized by the capital markets for this purpose and, therefore, is deemed to be a relevant measure for disclosure. Management is not aware of a comparable GAAP financial measure that would provide comparable information to investors.

Cash flows from operating activities. Net cash provided by operating activities of continuing operations was $80.7 million for 2004. Net cash generated from the Company’s pawn lending operations, cash advance operations and check cashing operations were $57.9 million, $22.1 million and $0.7 million, respectively. The improvement in cash flows from operating activities in 2004 as compared to 2003 was due to the improvement in results of pawn lending operations, the growth and development of cash advance locations opened in recent periods as well as the addition of Cashland for twelve months in 2004 versus five months in 2003.

     Historically, the Company’s finance and service charge revenue is highest in the first and fourth fiscal quarters (October through March) due to higher average loan balances. Proceeds from the disposition of merchandise are also generally highest in the Company’s fourth and first fiscal quarters (October through March) due to the holiday season and the impact of tax refunds. The net effect of these factors is that net revenues and net income typically are highest in the fourth and first fiscal quarters and likewise the Company’s cash flow is generally greatest in these two fiscal quarters.

Cash flows from investing activities. Higher lending activities led to increases in the Company’s investment in pawn loans and cash advances during 2004 that used cash of $10.3 million and $28.4 million, respectively. In addition, the Company acquired the assets of 42 pawnshops (including 41 SuperPawn locations in four western states) for a total of $104.8 million of cash and Company stock valued at $12.6 million. Of the total cash consideration, $1.5 million is payable in early 2005 and is included in “Accounts payable and accrued expenses” in the accompanying Consolidated Balance Sheet as of December 31, 2004. The Company also acquired 32 cash advance locations in southern California operating under the trade names of Urgent Money and GoldX for $14.6 million of cash. During the first quarter of 2004, the

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Company amended the Cashland asset purchase agreement and made a final payment of additional consideration in the amount of $5.4 million, consisting of $2.9 million in cash and a subordinated note for $2.5 million. The Company also invested $28.5 million in property and equipment in 2004 for the establishment of 3 new pawnshop locations, 72 cash advance locations (27 Cash America Payday Advance and 45 Cashland), the remodeling of selected operating units and ongoing enhancements to the information technology infrastructure, and other property additions.

     In September 2004, the Company sold its foreign pawn lending operations in the United Kingdom and Sweden to Rutland Partners LLP and received net cash proceeds of $104.9 million after paying off the outstanding balance of the multi-currency line of credit.

     Management anticipates that capital expenditures for 2005 will be approximately $30 to $40 million primarily for the establishment of approximately 75 to 85 combined total of new cash advance-only locations and pawnshops, for the remodeling of selected operating units, and for enhancements to communications and information systems. The additional capital required to pursue acquisition opportunities is not included in the estimate of capital expenditures because of the uncertainties surrounding any potential transaction of this nature at this time.

Cash flows from financing activities. During 2004, the Company had net borrowings of $24.4 million on bank lines of credit, of which $17.5 million was used to pay the additional cash portion of the acquisitions made during the year in excess of cash proceeds received upon the sale of the foreign lending operations. The Company made repayments of $8.3 million on senior unsecured notes. Additional uses of cash included $10.6 million (including a special dividend of $8.6 million declared upon the sale of the foreign pawn lending operations) for dividends paid and $4.3 million for the purchase of treasury shares (including $0.3 million purchases on behalf of participants relating to the Non-Qualified Savings Plan). On July 24, 2002, the Company’s Board of Directors authorized management to purchase up to one million shares of its common stock in the open market and terminated the open market purchase authorization established in 2000. During 2004, the Company purchased 173,200 shares for an aggregate amount of $4.0 million under this authorization. Additional purchases may be made from time to time in the open market, and it is expected that funding will come from operating cash flow. During 2004, options for 707,199 shares were exercised by its current and former directors, officers and employees and generated proceeds of $6.1 million of equity from the exercise of stock options.

     Under the terms of its U.S. line of credit agreement, as of March 31, 2004, the Company’s line of credit was reduced to $130.0 million from $135.0 million. At December 31, 2004, there was $92.5 million outstanding on this line of credit. See Note 9 of Notes to Consolidated Financial Statements.

     In February 2005, the Company amended and restated the existing line of credit agreement to increase the credit limit to $250.0 million and extend the maturity to February 2010. Interest on the amended line of credit is charged, at the Company’s option, at either LIBOR plus a margin or at the agent’s base rate. The margin on the line of credit varies from 0.875% to 1.875%, depending on the Company’s cash flow leverage ratios as defined in the amended agreement. The Company pays a fee on the unused portion ranging from 0.25% to 0.30% based on the Company’s cash flow leverage ratios as defined in the amended agreement.

     The credit agreement and the senior unsecured notes require the Company to maintain certain financial ratios. The Company is in compliance with all covenants and other requirements set forth in its debt agreements. A significant decline in demand for the Company’s products and services may cause the Company to reduce its planned level of capital expenditures and lower its working capital needs in order to maintain compliance with the financial ratios in those agreements. A violation of the credit agreements could result in an acceleration of the Company’s debt and increase the Company’s borrowing costs and could even adversely affect the Company’s ability to renew existing credit facilities, or obtain access to new credit facilities in the future. The Company does not anticipate a significant decline in demand for its

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services and has historically been successful in maintaining compliance with and renewing its debt agreements.

     The following table summarizes the Company’s contractual obligations of its continuing operations at December 31, 2004, and the effect such obligations are expected to have on its liquidity and cash flow in future periods, before giving effect to the February 2005 amendment to the Company’s line of credit (in millions):

	2005		2006		2007		2008		2009		Thereafter		Total
Line of Credit	$	—	$	92.5	$	—	$	—	$	—	$	—	$	92.5
Other long-term debt		16.8		17.1		17.1		13.0		8.7		1.4		74.1
Non-cancelable leases		29.5		24.4		19.0		13.9		9.3		11.8		107.9
Total	$	46.3	$	134.0	$	36.1	$	26.9	$	18.0	$	13.2	$	274.5

     Management believes that borrowings available under the credit facilities, cash generated from operations and current working capital of $209.5 million should be sufficient to meet the Company’s anticipated future capital requirements.

RECENT ACCOUNTING PRONOUNCEMENTS

     See discussion in Note 2 of Notes to the Consolidated Financial Statements.

CAUTIONARY STATEMENT REGARDING RISKS AND UNCERTAINTIES THAT MAY AFFECT FUTURE RESULTS

     This Annual Report on Form 10-K, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains statements that are forward-looking, as that term is defined by the Private Securities Litigation Reform Act of 1995 or by the Securities and Exchange Commission in its rules. The Company intends that all forward-looking statements be subject to the safe harbors created by these laws and rules. When used in this Annual Report on Form 10-K, the words “believes”, “estimates”, “plans”, “expects”, “anticipates”, and similar expressions as they relate to the Company or its management are intended to identify forward-looking statements. All forward-looking statements are based on current expectations regarding important risk factors. These risks and uncertainties are beyond the ability of the Company to control, and, in many cases, the Company cannot predict all of the risks and uncertainties that could cause its actual results to differ materially from those expressed in the forward-looking statements. Accordingly, actual results may differ materially from those expressed in the forward-looking statements, and such statements should not be regarded as a representation by the Company or any other person that the results expressed in the statements will be achieved.

Risk Factors

     Important risk factors that could cause results or events to differ from current expectations are described below. These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect the operations, performance, development and results of the Company’s business.

•   Changes in customer demand for the Company’s products and specialty financial services could adversely affect results. Although the Company’s products and services are a staple of its customer base, a significant change in the needs or wants of customers and the Company’s failure to adapt to those needs or wants could result in a significant decrease in the revenues of the Company.

•   The actions of third-parties who offer products, services or support at the Company’s locations could adversely affect results. The Company makes products and services available to its customers through various third parties. A failure of a third-party provider to provide its product or service or to maintain the quality and consistency of its product or service could result in a loss of customers and a

35

related loss in revenue from those products or services. The Company also utilizes third parties to support and maintain certain of its computerized point-of-sale and information systems. The failure of such a third party to fulfill its support and maintenance obligations could cause a disruption in the Company’s unit operations.

•

Circumstances could adversely affect the ability of the Company to open and acquire new operating units in accordance with its plans. The Company’s expansion program is subject to numerous factors which cannot be predicted or controlled, such as the availability of attractive acquisition candidates and the Company’s ability to attract, train and retain qualified unit management personnel. Another such factor is the availability of sites with acceptable restrictions and suitable terms and general economic conditions.

•   Changes in competition from various sources such as banks, savings and loans, short-term consumer lenders, and other similar financial services entities, as well as retail businesses that offer products and services offered by the Company, could put additional pressure on the Company. The Company encounters significant competition in connection with its lending and merchandise disposition operations from other pawnshops, cash advance companies and other forms of financial institutions such as consumer finance companies. Significant increases in these competitive influences could adversely affect the Company’s operations through a decrease in the number of cash advances and pawn loans originated, resulting in lower levels of earning assets in these categories.

•   Changes in economic conditions could reduce earnings. While the credit risk for most of the Company’s consumer lending is mitigated by the collateralized nature of pawn lending, a sustained deterioration in the economic environment could adversely affect the Company’s operations through a deterioration in performance of its pawn loan or cash advance portfolios, or by reducing consumer demand for the purchase of pre-owned merchandise.

•   Adverse real estate market fluctuations could affect the Company’s profits. A significant rise in real estate prices could result in an increase in the cost of store leases as the Company opens new locations and renews leases for existing locations.

•   Interest rates could rise and affect earnings. Although the softness in the U.S. economy over the past several years has resulted in relatively low interest rates offered by lending institutions, the Federal Reserve Bank has embarked on a program to gradually increase the federal funds rates. If current trends continue in interest rates, this could increase the cost of borrowing to the Company.

•   Changes in the capital markets or the Company’s financial condition could reduce available capital. The Company regularly accesses the debt capital markets to refinance existing debt obligations and to obtain capital to finance growth. Efficient access to these markets is critical to the Company’s ongoing financial success; however, the Company’s future access to the debt capital markets could become restricted should the Company experience deterioration of its cash flows, balance sheet quality, or overall business or industry prospects.

•   Changes in tax and other laws and governmental rules and regulations applicable to the specialty financial services industry can have adverse effects. The Company’s lending activities are subject to extensive regulation and supervision under various federal, state and local laws, ordinances and regulations. The Company faces the risk that new laws and regulations could be enacted that could have a negative impact on the Company’s U.S. lending activities.

•   Other factors are discussed under Quantitative and Qualitative Disclosures about Market Risk.

•   Other risks that are indicated in the Company’s filings with the Securities and Exchange Commission may apply as well.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Market risks relating to the Company’s operations result primarily from changes in interest rates and gold prices. The Company does not engage in speculative or leveraged transactions, nor does it hold or issue financial instruments for trading purposes.

Interest Rate Risk. Management’s objective is to minimize the cost of borrowing through an appropriate mix of fixed and floating rate debt. Derivative financial instruments, such as interest rate cap agreements, may be used for the purpose of managing fluctuating interest rate exposures that exist from ongoing business operations. After considering the effectiveness, if any, of the interest rate cap agreements, the Company had net variable rate borrowings outstanding of $92.5 million and $68.1 million at December 31, 2004 and 2003, respectively. If prevailing interest rates were to increase 100 basis points over the rates at December 31, 2004 and 2003, respectively, and the variable rate borrowings outstanding remained constant, the Company’s interest expense would increase by $0.9 million and $0.8 million, and net income after taxes would decrease by $0.6 million and $0.5 million in 2004 and 2003, respectively. If prevailing interest rates were to decrease 100 basis points from the rates at December 31, 2004 and 2003, respectively, the combined fair values of the Company’s outstanding fixed rate debt ($76.6 million and $84.5 million, respectively) would increase by $1.8 million and $2.4 million as of December 31, 2004 and 2003, respectively.

Gold Price Risk. The Company periodically uses forward sale contracts with a major gold bullion bank to sell a portion of the expected amount of refined gold produced in the normal course of business from its liquidation of forfeited gold merchandise. A significant decrease in the price of gold would result in a reduction of proceeds from the disposition of refined gold to the extent that amounts sold were in excess of the amount of contracted forward sales. In addition, a significant and sustained decline in the price of gold would negatively impact the value of some of the goods pledged as collateral by customers and identified for liquidation as refined gold. In this instance, management believes some customers would be willing to add additional items of value to their pledge in order to obtain the desired loan amount. However, those customers unable or unwilling to provide additional collateral would receive lower loan amounts, possibly resulting in a lower balance of pawn loans outstanding for the Company.

Foreign Exchange Risk. The notes receivable received in the sale of the Company’s foreign operations are subject to the risk of unexpected change in the Swedish kronor exchange rates. As a result of fluctuations in the Swedish kronor, the Company recorded foreign currency transaction gains of $1.1 million in 2004. A hypothetical 10% decline in the exchange rate of the Swedish kronor at December 31, 2004 would have decreased net income by $0.5 million.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm	39
Report of Management on Internal Control over Financial Reporting	41
Consolidated Balance Sheets – December 31, 2004 and 2003	42
Consolidated Statements of Operations – Years Ended December 31, 2004, 2003 and 2002	43
Consolidated Statements of Stockholders’ Equity – Years Ended December 31, 2004, 2003 and 2002	44
Consolidated Statements of Comprehensive Income – Years Ended December 31, 2004, 2003 and 2002	44
Consolidated Statements of Cash Flows – Years Ended December 31, 2004, 2003 and 2002	45
Notes to Consolidated Financial Statements	46

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Cash America International, Inc.

We have completed an integrated audit of Cash America International, Inc.’s 2004 consolidated financial statements and of its internal control over financial reporting as of December 31, 2004 and audits of its 2003 and 2002 consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our opinions, based on our audits, are presented below.

Consolidated financial statements

In our opinion, the accompanying consolidated balance sheets and related consolidated statements of operations, stockholders’ equity, comprehensive income and cash flows present fairly, in all material respects, the financial position of Cash America International, Inc. and its subsidiaries (the “Company”) at December 31, 2004 and 2003, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2004 in conformity with accounting principles generally accepted in the United States of America. 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 of these statements 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. An audit of financial statements 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, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

Internal control over financial reporting

Also, in our opinion, management’s assessment, included in the accompanying Report of Management on Internal Control Over Financial Reporting, that the Company maintained effective internal control over financial reporting as of December 31, 2004 based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly stated, in all material respects, based on those criteria. Furthermore, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control — Integrated Framework issued by the COSO. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management’s assessment and on the effectiveness of the Company’s internal control over financial reporting based on our audit. We conducted our audit of internal control over financial reporting 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 effective internal control over financial reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that,

39

in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As described in the Report of Management on Internal Control Over Financial Reporting, management has excluded the pawn operating assets acquired from Camco, Inc. which operated under the trade name of SuperPawn (“SuperPawn”) from its assessment of internal control over financial reporting as of December 31, 2004, because they were acquired by the Company in a purchase business combination during 2004. We have also excluded SuperPawn from our audit of internal control over financial reporting. SuperPawn is included in a consolidated subsidiary and SuperPawn’s total revenues and total assets represented 1.2% and 21.2%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2004.

/s/ PricewaterhouseCoopers LLP

Fort Worth, Texas
February 24, 2005

40

REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

     Management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of the Company’s internal control over financial reporting. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

     Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004. In making its assessment of the effectiveness of the Company’s internal control over financial reporting, management of the Company has utilized the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

     Based on management’s assessment, we concluded that, as of December 31, 2004, the Company’s internal control over financial reporting is effective based on those criteria. Our assessment of the effectiveness of our internal control over financial reporting as of December 31, 2004 has excluded the pawn operating assets acquired from Camco, Inc., which operated under the trade name SuperPawn (“SuperPawn”), because they were acquired by the Company in a purchase business combination during 2004. SuperPawn is included in a consolidated subsidiary and SuperPawn’s total revenues and total assets represented 1.2% and 21.2%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2004.

     Our assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears in this Form 10-K.

/s/ DANIEL R. FEEHAN	/s/ THOMAS A. BESSANT, JR.
Daniel R. Feehan	Thomas A. Bessant, Jr.
President and Chief Executive Officer	Executive Vice President and
	Chief Financial Officer
February 24, 2005	February 24, 2005

41

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	December 31,
	2004			2003
Assets
Current assets:
Cash and cash equivalents	$	15,103		$	11,959
Pawn loans		109,353			81,154
Cash advances, net		36,490			28,401
Merchandise held for disposition, net		67,050			49,432
Finance and service charges receivable		20,458			15,667
Other receivables and prepaid expenses		10,547			6,612
Income taxes recoverable		—			2,853
Deferred tax assets		9,293			6,868
Current assets of discontinued operations		—			82,265
Total current assets		268,294			285,211
Property and equipment, net		87,612			67,852
Goodwill		164,073			99,084
Intangible assets, net		24,361			4,717
Other assets		10,825			2,595
Non-current assets of discontinued operations		—			30,128
Total assets	$	555,165		$	489,587
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	33,854		$	34,416
Customer deposits		5,686			4,102
Income taxes currently payable		2,505			—
Current portion of long-term debt		16,786			8,286
Current liabilities of discontinued operations		—			4,742
Total current liabilities		58,831			51,546
Deferred tax liabilities		10,999			5,052
Other liabilities		1,559			1,450
Long-term debt		149,840			139,754
Non-current liabilities of discontinued operations		—			15,292
Commitments and contingencies (Note 11)
Stockholders’ equity:
Common stock, $.10 par value per share, 80,000,000 shares authorized; 30,235,164 shares issued in 2004 and 2003		3,024			3,024
Additional paid-in capital		154,294			141,867
Retained earnings		187,860			141,642
Accumulated other comprehensive income		—			7,995
Notes receivable secured by common stock		(2,488	)		(2,488	)
Treasury shares at cost (938,386 shares in 2004 and 2,040,180 shares in 2003)		(8,754	)		(15,547	)
Total stockholders’ equity		333,936			276,493
Total liabilities and stockholders’ equity	$	555,165		$	489,587

See notes to consolidated financial statements.

42

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

	Year Ended December 31,
	2004			2003			2002
Revenue
Finance and service charges	$	110,495		$	100,699		$	94,458
Proceeds from disposition of merchandise		250,291			236,032			233,396
Cash advance fees		99,202			46,955			19,084
Check cashing royalties and fees		9,490			4,949			3,563
Total Revenue		469,478			388,635			350,501
Cost of Revenue
Disposed merchandise		153,866			147,456			152,071
Net Revenue		315,612			241,179			198,430
Expenses
Operations		173,277			142,816			125,911
Cash advance loss provision		23,529			10,756			6,676
Administration		40,183			32,519			25,484
Depreciation and amortization		17,210			13,269			12,487
Total Expenses		254,199			199,360			170,558
Income from Operations		61,413			41,819			27,872
Interest expense		8,148			8,817			8,958
Interest income		(642	)		(310	)		(549	)
Foreign currency transaction gains		(1,116	)		—			—
Loss from derivative valuation fluctuations		—			—			150
Gain from disposal of asset		—			(1,013	)		—
Income from Continuing Operations before Income Taxes		55,023			34,325			19,313
Provision for income taxes		20,058			12,295			7,396
Income from Continuing Operations		34,965			22,030			11,917
Income from discontinued operations (including gain on disposal of $19,023 for 2004)		28,284			11,809			10,803
Provision for income taxes (including $3,608 on gain on disposal for 2004)		6,414			3,803			3,411
Income from discontinued operations		21,870			8,006			7,392
Net Income	$	56,835		$	30,036		$	19,309
Net income per share:
Basic –
Income from continuing operations	$	1.23		$	0.86		$	0.49
Income from discontinued operations	$	0.77		$	0.31		$	0.30
Net income	$	2.00		$	1.17		$	0.79
Diluted –
Income from continuing operations	$	1.18		$	0.83		$	0.48
Income from discontinued operations	$	0.74		$	0.30		$	0.30
Net income	$	1.92		$	1.13		$	0.78
Weighted average common shares outstanding:
Basic		28,402			25,586			24,424
Diluted		29,584			26,688			24,841
Dividends declared per common share	$	0.370		$	0.065		$	0.050

See notes to consolidated financial statements.

43

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data)

	Year Ended December 31,
	2004						2003						2002
	Shares			Amount			Shares			Amount			Shares			Amount
Common stock
Balance at end of year		30,235,164		$	3,024			30,235,164		$	3,024			30,235,164		$	3,024
Additional paid-in capital
Balance at beginning of year					141,867						127,819						127,821
Reissuance of treasury shares					7,298						5,597						—
Exercise of stock options					210						(249	)					(11	)
Stock-based compensation expense					1,199						14						—
Tax benefit from exercise of stock options					3,720						8,686						9
Balance at end of year					154,294						141,867						127,819
Retained earnings
Balance at beginning of year					141,642						113,278						95,192
Net income					56,835						30,036						19,309
Dividends declared					(10,617	)					(1,672	)					(1,223	)
Balance at end of year					187,860						141,642						113,278
Accumulated other comprehensive income (loss)
Balance at beginning of year					7,995						(2,718	)					(10,820	)
Foreign currency translation gain					(1,741	)					10,713						8,102
Sale of subsidiaries					(6,254	)					—						—
Balance at end of year					—						7,995						(2,718	)
Notes receivable secured by common stock
Balance at beginning of year					(2,488	)					(5,864	)					(5,890	)
Payments on notes receivable during year					—						3,376						26
Balance at end of year					(2,488	)					(2,488	)					(5,864	)
Treasury shares at cost
Balance at beginning of year		(2,040,180	)		(15,547	)		(5,939,794	)		(43,204	)		(5,643,318	)		(40,896	)
Purchases of treasury shares		(184,198	)		(4,328	)		(198,158	)		(2,320	)		(303,851	)		(2,362	)
Reissuance of treasury shares		578,793			5,264			1,533,333			11,208			—			—
Exercise of stock options		707,199			5,857			2,564,439			18,769			7,375			54
Balance at end of year		(938,386	)		(8,754	)		(2,040,180	)		(15,547	)		(5,939,794	)		(43,204	)
Total Stockholders’ Equity				$	333,936					$	276,493					$	192,335

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Year Ended December 31,
	2004			2003		2002
Net income	$	56,835		$	30,036	$	19,309
Other comprehensive income (loss) net of tax of $0 –
Foreign currency translation gain (loss)		(1,741	)		10,713		8,102
Total Comprehensive Income	$	55,094		$	40,749	$	27,411

See notes to consolidated financial statements.

44

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended December 31,
	2004			2003			2002
Cash Flows from Operating Activities:
Net income	$	56,835		$	30,036		$	19,309
Less: Income from discontinued operations		21,870			8,006			7,392
Income from continuing operations		34,965			22,030			11,917
Adjustments to reconcile income from continuing operations to net cash provided by operating activities of continuing operations:
Depreciation and amortization		17,210			13,269			12,487
Cash advance loss provision		23,529			10,756			6,676
Stock-based compensation expense		1,199			14			—
Foreign currency transaction gains		(1,116	)		—			—
Gain from disposal of asset		—			(1,013	)		—
Loss from derivative valuation fluctuations		—			—			150
Changes in operating assets and liabilities -
Merchandise held for disposition		4,830			5,907			9,155
Finance and service charges receivable		(1,359	)		(928	)		(697	)
Other receivables and prepaid expenses		(2,569	)		1,530			(2,276	)
Accounts payable and accrued expenses		(5,723	)		12,502			(5,480	)
Customer deposits, net		714			8			89
Current income taxes, net		3,918			4,455			902
Deferred income taxes, net		5,074			1,299			6,524
Net cash provided by operating activities of continuing operations		80,672			69,829			39,447
Cash Flows from Investing Activities:
Pawn loans made		(290,013	)		(272,388	)		(266,524	)
Pawn loans repaid		157,624			149,810			145,624
Principal recovered on forfeited loans through dispositions		122,115			117,447			120,960
Cash advances made, assigned or purchased		(447,113	)		(181,190	)		(37,325	)
Cash advances repaid		418,647			157,592			30,175
Acquisitions, net of cash acquired		(122,413	)		(45,508	)		(1,017	)
Purchases of property and equipment		(28,491	)		(16,063	)		(9,103	)
Proceeds from dispositions of assets		104,908			1,639			—
Net cash used by investing activities of continuing operations		(84,736	)		(88,661	)		(17,210	)
Cash Flows from Financing Activities:
Net borrowings (repayments) under bank lines of credit		24,372			23,611			(55,500	)
Issuance of long-term debt		—			—			42,500
Payments on notes payable, capital leases and other obligations		(8,286	)		(12,571	)		(9,220	)
Change in notes receivable secured by common stock		—			2,968			288
Proceeds from exercise of stock options		6,067			18,520			42
Treasury shares purchased		(4,328	)		(2,320	)		(2,362	)
Dividends paid		(10,617	)		(1,672	)		(1,223	)
Net cash provided (used) by financing activities of continuing operations		7,208			28,536			(25,475	)
Cash provided (used) by continuing operations		3,144			9,704			(3,238	)
Cash provided by discontinued operations		—			—			3,145
Cash and cash equivalents at beginning of year		11,959			2,255			2,348
Cash and cash equivalents at end of year	$	15,103		$	11,959		$	2,255

See notes to consolidated financial statements.

45

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Nature of the Company

     Cash America International, Inc. (the “Company”) is a provider of specialty financial services to U.S. consumers. The Company offers secured non-recourse loans, commonly referred to as pawn loans, to individuals through its pawn lending operations. The pawn loan portfolio generates finance and service charges revenue. A related activity of the lending operations is the disposition of merchandise, primarily collateral from unredeemed pawn loans. As an alternative to a pawn loan, the Company offers unsecured cash advances in selected locations and on behalf of third-party banks in other locations. The Company also provides check cashing and other money services through many of its cash advance locations and through its franchised and company owned check cashing centers. Prior to September 7, 2004, the Company also provided financial services to individuals in the United Kingdom and Sweden (the “foreign pawn lending operations”). The foreign pawn lending operations were sold to an investor in the United Kingdom. See Note 4.

     As of December 31, 2004, the Company’s pawn lending operations consisted of 452 pawnshops, including 441 owned units and 11 franchised units in 21 states.

     As of December 31, 2004, the Company’s cash advance operations consisted of 253 locations, including 175 locations through Cashland Financial Services, Inc. (“Cashland”), a wholly-owned subsidiary, 32 southern California locations that have historically operated under the trade names “Urgent Money” and “GoldX”, and 46 Cash America Payday Advance locations (collectively referred to as “cash advance locations”).

     As of December 31, 2004, the check cashing operations of Mr. Payroll Corporation (“Mr. Payroll”), a wholly-owned subsidiary, consisted of 128 franchised and 6 company-owned check cashing centers in 20 states.

2.   Summary of Significant Accounting Policies

Basis of Presentation • The consolidated financial statements include the accounts of the Company’s majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

     In September 2004, the Company sold its foreign pawn lending operations in the United Kingdom and Sweden. The results of the foreign pawn lending operations have been reclassified as discontinued operations for all periods presented in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”. See Note 4. Additionally, in September 2001, the Company announced plans to exit the rent-to-own business in order to focus on its core lending business. In June 2002, the Company sold the remaining assets of its rent-to-own business. The results of the rent-to-own business have been reclassified as discontinued operations in accordance with Accounting Standards Board (“APB”) Opinion 30, “Reporting of Results of Operations—Discontinued Events and Extraordinary Items”.

Use of Estimates • The preparation of financial statements in conformity with generally accepted accounting principles 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 dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, management evaluates its estimates and judgments, including those related to revenue

46

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

recognition, merchandise held for disposition, allowance for losses on cash advances, long-lived and intangible assets, income taxes, contingencies and litigation. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.

Foreign Currency Translations • Notes receivable and related interest receivable resulting from the sale of the Company’s foreign pawn lending operations are denominated in the Swedish kronor. The balances are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. Interest income on the notes is translated at the monthly average exchange rates. All realized and unrealized transaction gains and losses are included in determining net income for the reporting period.

     For the periods prior to the sale of its foreign pawn lending operations, the functional currencies for the foreign subsidiaries are the local currencies. The assets and liabilities of those subsidiaries are translated into U.S. dollars at the exchange rates in effect at each balance sheet date, and the resulting adjustments are accumulated in other comprehensive income (loss) as a separate component of stockholders’ equity. Revenue and expenses are translated at the monthly average exchange rates occurring during each year.

Cash and Cash Equivalents • The Company considers cash on hand in operating locations, deposits in banks and short-term marketable securities with original maturities of 90 days or less as cash and cash equivalents.

Revenue Recognition • Pawn loans are made on the pledge of tangible personal property. The Company accrues finance and service charges revenue only on those pawn loans that the Company deems collectible based on historical loan redemption statistics. Pawn loans written during each calendar month are aggregated and tracked for performance. The gathering of this empirical data allows the Company to analyze the characteristics of its outstanding pawn loan portfolio and estimate the probability of collection of finance and service charges. For loans not repaid, the carrying value of the forfeited collateral (“merchandise held for disposition”) is stated at the lower of cost (cash amount loaned) or market. Revenue is recognized at the time that merchandise is sold. Interim customer payments for layaway sales are recorded as customer deposits and subsequently recognized as revenue during the period in which the final payment is received.

     Cash advances provide customers with cash in exchange for a promissory note or other repayment agreement supported by that customer’s personal check for the aggregate amount of the cash advanced plus a service fee. To repay the cash advance, customers may redeem their check by paying cash or they may allow the check to be presented for collection. The Company accrues fees and interest on cash advances on a constant yield basis ratably over their terms. For those locations that offer cash advances from third-party banks, the Company receives an administrative fee for services provided on the banks’ behalf. These fees are recorded in revenue when earned.

     The Company records fees derived from its owned check cashing locations and cash advance locations in the period in which the service is provided. Royalties derived from franchise locations are recorded on the accrual basis.

Allowance for Losses on Cash Advances • In order to manage its portfolio of cash advances effectively, the Company utilizes a variety of underwriting criteria, monitors the performance of the portfolio, and maintains an allowance for losses.

47

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     The Company maintains an allowance for losses on cash advances (including fees and interest) at a level estimated to be adequate to absorb credit losses inherent in the outstanding combined Company and bank portfolio. The allowance for losses on Company-owned cash advances offsets the outstanding cash advance amounts in the consolidated balance sheets. Active bank-originated cash advances that the Company doesn’t have a participation interest in are not included in the consolidated balance sheet. Since losses on cash advances assigned to the Company by the banks are the Company’s responsibility, an accrual for losses on bank-owned cash advances is maintained and included in “Accounts payable and accrued expenses” in the accompanying consolidated balance sheet. See Note 5.

     Cash advances written by the Company during each calendar month are aggregated and tracked to develop a performance history. The Company stratifies the outstanding combined portfolio by age, delinquency, and stage of collection when assessing the adequacy of the allowance for losses. Historical collection performance adjusted for recent portfolio performance trends is utilized to develop expected loss rates, which are used for the establishment of the allowance. Increases in the allowance are created by recording a cash advance loss provision in the consolidated statements of operations. The Company charges off all cash advances once they are 60 days past due, or sooner if deemed uncollectible. Recoveries on losses previously charged to the allowance are credited to the allowance when collected.

     The allowance deducted from the carrying value of cash advances was $4,358,000 and $3,393,000 at December 31, 2004 and 2003, respectively. The accrual for losses on bank-owned cash advances was $342,000 and $55,000 at December 31, 2004 and 2003, respectively. See Note 5.

Merchandise Held for Disposition and Cost of Disposed Merchandise • Merchandise held for disposition includes merchandise acquired from unredeemed loans, merchandise purchased directly from the public and merchandise purchased from vendors. Merchandise held for disposition is stated at the lower of cost (specific identification) or market. The cost of merchandise, computed on the specific identification basis, is removed from merchandise held for disposition and recorded as a cost of revenue at the time of sale. The Company provides an allowance for valuation and shrinkage based on management’s evaluation of the characteristics of the merchandise. The allowance deducted from the carrying value of merchandise held for disposition amounted to $1,445,000 and $1,410,000 at December 31, 2004 and 2003, respectively.

Property and Equipment • Property and equipment is recorded at cost. The cost of property retired or sold and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in the consolidated statements of operations. Depreciation expense is generally provided on a straight-line basis, using the following estimated useful lives:

Buildings and building improvements (1)	7 to 40 years
Leasehold improvements (2).	2 to 10 years
Furniture, fixtures and equipment.	3 to 7 years
Computer software.	3 to 5 years

(1)	Structural components are depreciated over 30 to 40 years and the remaining building systems and features are depreciated over 7 to 10 years.
(2)	Leasehold improvements are depreciated over the terms of the lease agreements.

Software Development Costs • The Company develops computer software for internal use. Internal and external costs incurred for the development of computer applications, as well as for upgrades and enhancements that result in additional functionality of the applications, are capitalized. Internal and external training and maintenance costs are charged to expense as incurred. When an application is placed in service, the Company begins amortizing the related capitalized software costs using the straight-line method and an estimated useful life varying from 3 to 5 years.

48

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Goodwill and Other Intangible Assets • SFAS No. 142, “Goodwill and Other Intangible Assets”, became effective January 1, 2002, and, as a result, the Company discontinued the amortization of goodwill as of that date. In lieu of amortization, the Company is required to perform an impairment review of goodwill at least annually. The Company completed its reviews during 2002, 2003 and 2004. Based on the results of these tests, management determined that there was no impairment as the respective fair values of each of the Company’s reporting units exceeded their respective carrying amounts. See Note 7.

     The Company amortizes intangible assets with an estimable life on the basis of their expected periods of benefit, generally 2 to 10 years. Accumulated amortization of these intangible assets was $1,947,000 and $783,000 at December 31, 2004 and 2003, respectively.

     The costs of start-up activities and organization costs are charged to expense as incurred.

Impairment of Long-Lived Assets • An evaluation of the recoverability of property and equipment and intangible assets subject to amortization is performed whenever the facts and circumstances indicate that the carrying value may be impaired. An impairment loss is recognized if the future undiscounted cash flows associated with the asset are less than the asset’s corresponding carrying value. The amount of the impairment loss, if any, is the excess of the asset’s carrying value over its estimated fair value.

Income Taxes • The provision for income taxes is based on income before income taxes as reported for financial statement purposes. Deferred income taxes are provided for in accordance with the assets and liability method of accounting for income taxes in order to recognize the tax effects of temporary differences between financial statement and income tax accounting.

Hedging and Derivatives Activity • As a policy, the Company does not engage in speculative or leveraged transactions, nor does it hold or issue financial instruments for trading purposes. The Company does periodically use derivative financial instruments, such as interest rate cap agreements, for the purpose of managing interest rate exposures that exist from ongoing business operations. At December 31, 2004, the Company entered into an interest rate cap agreement that is designated neither as a cash flow hedge nor a fair value hedge pursuant to SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133), and its corresponding amendments under SFAS No. 138 “Accounting for Certain Derivative Instruments and Certain Hedging Activities — an Amendment of FASB Statement No. 133” (“SFAS 138”) and SFAS No. 149 “Amendment of FASB Statement No. 133 on Derivative and Hedging Activities” (“SFAS 149”). The fair value of the interest rate cap agreement is recognized in the accompanying balance sheet and changes in its fair value are recognized in earnings. The Company may also periodically enter into forward sale contracts with a major gold bullion bank to sell fine gold that is produced in the normal course of business from the Company’s liquidation of forfeited gold merchandise. These contracts are not accounted for as derivatives because they meet the criteria for the normal purchases and normal sales scope exception in SFAS 133. In addition, the Company may periodically transfer funds between currencies and may concurrently enter into short-term currency swaps to eliminate the risk of currency fluctuations. See Note 14.

Advertising Costs • Costs of advertising are expensed at the time of first occurrence. Advertising expense for continuing operations was $11,210,000, $7,355,000 and $3,811,000 for the years ended December 31, 2004, 2003, and 2002, respectively.

Stock-Based Compensation • The Company accounts for its stock-based employee compensation plans in accordance with APB Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”), often referred to as the “intrinsic value” based method, and accordingly, no compensation expense has been

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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

recognized. In October 1995, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”). SFAS 123 encourages expensing the fair value of employee stock options, but allows an entity to continue to account for stock based compensation under APB 25 with disclosures of the pro forma effect on net income had the fair value accounting provisions of SFAS 123 been adopted. In December 2002, SFAS 123 was amended by SFAS No. 148, “Accounting for Stock-Based Compensation - Transition and Disclosure, an amendment of FASB Statement No. 123”. The table below illustrates the effect on net income and earnings per share if the Company had applied SFAS 123 and calculated the fair value of options granted using the Black-Scholes option-pricing model (in thousands, except per share amounts).

     Included in the pro forma amounts below for 2004 and 2003 is the effect of the vesting of 576,547 and 1,021,725 shares, respectively, which accelerated pursuant to the original terms of the options due to price performance of the shares of the Company. As a result, the pro forma compensation expense of those option shares is moved forward into the current year, eliminating it from future years had scheduled vesting occurred during the years 2005 through 2007.

	2004		2003		2002
Net income - as reported	$	56,835	$	30,036	$	19,309
Deduct: Total stock-based employee compensation expense (a)		1,005		4,107		1,379
Net income - pro forma	$	55,830	$	25,929	$	17,930
Net income per share -
Basic:
As reported	$	2.00	$	1.17	$	0.79
Pro forma	$	1.97	$	1.01	$	0.73
Diluted:
As reported	$	1.92	$	1.13	$	0.78
Pro forma	$	1.88	$	0.97	$	0.72

^(a) Determined under fair value based method for all awards, net of related tax effects. “All awards” refers to awards granted, modified, or settled in fiscal periods beginning after December 15, 1994, that is, options for which the fair value was required to be measured under SFAS 123.

     The pro forma amounts of stock options granted were estimated on the date of grant using the Black-Scholes option-pricing model. No stock options were granted during 2004. For options granted during 2003 and 2002, the following weighted average assumptions were made:

	2003			2002
Expected term (years)		8.2			8.2
Risk-free interest rate		4.14	%		5.23	%
Expected dividend yield		0.54	%		0.63	%
Expected volatility		49.5	%		56.7	%

Net Income Per Share • Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding during the year. Diluted net income per share is calculated by giving effect to the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares during the year.

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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     The following table sets forth the reconciliation of numerators and denominators of basic and diluted earnings per share computations for the three years ended December 31, 2004 (in thousands):

	2004		2003		2002
Numerator:
Income from continuing operations available to common stockholders	$	34,965	$	22,030	$	11,917
Income from discontinued operations		21,870		8,006		7,392
Net income available to common stockholders	$	56,835	$	30,036	$	19,309
Denominator:
Basic earnings per share computation —
Weighted average common shares outstanding		28,402		25,586		24,424
Diluted earnings per share computation —
Weighted average common shares		28,402		25,586		24,424
Dilutive effect of share-based compensation		1,116		1,039		350
Dilutive effect of non-qualified savings plan		66		63		67
Total diluted shares		29,584		26,688		24,841

     As of December 31, 2004, no anti-dilutive shares were included in the above computations.

Recent Accounting Pronouncements • In December 2004, FASB issued Statement 123 (revised 2004), “Share-Based Payment” (“SFAS 123R”). SFAS 123R requires that the cost resulting from all share-based payment transactions be recognized in the financial statements over the period during which an employee is required to provide service in exchange for the award. SFAS 123R establishes fair value as the measurement objective in accounting for share-based payment arrangements and requires all entities to apply a fair-value-based method in accounting for share-based transactions with employees. SFAS 123R also amends FASB Statement No. 95, “Statement of Cash Flows”, to require that excess tax benefits be reported as a financing cash inflow rather than as a reduction of taxes paid. SFAS 123R is effective as of the beginning of the first interim reporting period that begins after June 15, 2005 and is not expected to have a significant impact on the Company’s consolidated financial position or results of operations because of the Company’s decision to transition from its stock option compensation program to a restricted stock unit compensation program that is recognized as an expense, prior to the implementation of the new pronouncement.

     In December 2003, the Accounting Standards Executive Committee (“AcSEC”) issued Statement of Position 03-3 (“SOP 03-3”), “Accounting for Certain Loans or Debt Securities Acquired in a Transfer.” SOP 03-3 requires that the excess of contractual cash flows over cash flows expected to be collected not be recognized as an adjustment of yield, loss accrual, or valuation allowance. Subsequent increases in cash flows expected to be collected generally should be recognized prospectively through adjustment of the loan’s yield over its remaining life and decreases in cash flows expected to be collected should be recognized as impairment. SOP 03-3 is effective for loans acquired in fiscal years beginning after December 15, 2004 and is not expected to have a material effect on the Company’s consolidated financial position or results of operations.

Reclassifications • Certain amounts in the consolidated financial statements for 2003 and 2002 have been reclassified to conform to the presentation format adopted in 2004. These reclassifications have no effect on net income or stockholders’ equity previously reported.

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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3.   Acquisitions

SuperPawn • In keeping with its business strategy to expand its service offerings to a larger number of potential customers, on December 10, 2004, the Company completed the acquisition of substantially all of the pawn operating assets of Camco, Inc., which operated under the trade name “SuperPawn” in four states in the western United States. SuperPawn is a 41-store chain based in Las Vegas, Nevada. The transaction provided the Company its initial entry into the western United States for pawn lending activities. The aggregate purchase consideration and costs totaled $118,363,000, which consisted of $104,802,000 in cash which includes a payable for $1,500,000 that is to be reconciled upon post transaction accounting and settled in early 2005, 578,793 shares of the Company’s stock valued at $12,562,000 and acquisition costs of $999,000.

Other Acquisitions • The Company acquired, in two distinct transactions, the operating assets of 32 cash advance locations in southern California operating under the trade names “GoldX” (acquired on August 31, 2004) and “Urgent Money” (acquired on September 20, 2004) for $14,628,000 in cash. The Company also acquired a pawnshop in Florida in November 2004 for $589,000. The operating results of those locations have been included in the consolidated financial statements since the respective dates of acquisition.

     The Company’s June 30, 2003 asset purchase agreement for the purchase of the assets of Cashland, Inc. through Cashland Financial Services, Inc. (“Cashland”), a wholly-owned subsidiary, contained a provision under which the seller could potentially have received additional consideration based upon the future earnings of the business. On February 2, 2004, the parties amended the asset purchase agreement to eliminate that provision and to provide instead for the Company to make a final payment of additional consideration in the amount of $5,400,000. The payment consisted of $2,900,000 in cash and a subordinated note for $2,500,000 (see Note 9). The Company increased goodwill for the additional consideration and other cost adjustments totaling $5,406,000.

     The following table provides information concerning the acquisitions made by the Company’s continuing operations during 2004 and 2003 ($ in thousands):

	2004			2003
Number of store acquired:
Pawnshops		42			7
Cash advance locations		32			121
Check cashing center		—			1
Purchase price allocated to:
Pawn loans	$	26,781		$	2,506
Finance and service charges receivable		3,715			307
Cash advances and fees receivable		2,302			12,876
Merchandise held for disposition, net		13,592			677
Property and equipment		7,165			6,514
Goodwill		65,285			34,673
Non-competition agreements		5,310			1,170
Customer relationships		3,539			2,530
Tradenames		4,326			1,000
Licenses		7,649			—
Other assets, net of accrued liabilities		(679	)		60
Total purchase price, net of cash acquired		138,985			62,313
Stock issued in acquisitions		(12,562	)		(16,805	)
Note issued in acquisition		(2,500	)		—
Cash consideration payable		(1,510	)		—
Cash paid for acquisitions	$	122,413		$	45,508

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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     The following table provides unaudited condensed pro forma statements of operations information on the acquisition of SuperPawn for the years ended December 31, 2004 and 2003 (in thousands, except per share amounts):

	Year Ended December 31,
	2004				2003
	As Reported		Pro Forma (a)		As Reported		Pro Forma (a)
Total revenue	$	469,478	$	536,276	$	388,635	$	449,950
Income from continuing operations		34,965		41,829		22,030		27,143
Income from continuing operations per share:
Basic	$	1.23	$	1.45	$	0.86	$	1.04
Diluted		1.18		1.39		0.83		1.00

(a) Pro forma adjustments reflect:

(i)	the inclusion of operating results of Camco, Inc. for the period January 1, 2004 through December 10, 2004, the date of acquisition, for 2004 and for the entire year of 2003;
(ii)	the eliminations of certain general and administrative expenses of Camco, Inc. primarily consisting of compensation and related expenses of Camco, Inc.’s owner and other members of its management team not employed by the Company;
(iii)	the adjustments of depreciable asset bases and lives for property and equipment and amortization of intangible assets acquired by the Company;
(iv)	the additional interest incurred in the acquisition of Cameo, Inc.’s operating assets;
(v)	the elimination of bad debt expense on receivables due from a Camco, Inc. affiliate not associated with the core business;
(vi)	the tax effect of Camco, Inc. earnings and net pro forma adjustments at statutory rate of 35%; and
(vii)	the weighted average number of shares of common stock issued in acquisition of Camco, Inc’s operating assets.

4.  Discontinued Operations

     In order to dedicate its strategic efforts and resources on the growth opportunities of pawn lending and cash advance activities in the United States, the Company announced in September 2004, the sale of its foreign pawn lending operations in the United Kingdom and Sweden to Rutland Partners LLP for $104,908,000 cash after paying off the outstanding balance of the multi-currency line of credit, and two separate subordinated notes receivable valued at $7,962,000. The Company realized a gain of $19,023,000 ($15,415,000 net of related taxes) upon the sale of the discontinued operations. The amount of goodwill included in the determination of the gain was $18,479,000. In connection with the sale, the Company declared a special dividend of $0.30 per share to its shareholders that was paid in December 2004. The special dividend reflects a share of the significant gain realized on the sale.

     The subordinated notes received are the sole obligation of the company that acquired the Swedish pawn lending operations and are both subordinated as to rights and payment terms to certain senior lenders in the transaction. The senior subordinated note received in the maximum principal amount of SEK 80,400,000 (approximately $10,685,000 face value at the date of sale with a discounted value of $8,262,000 at December 31, 2004) bears a coupon rate of 8.33% per annum (effective yield of 16.4% per annum) payable quarterly with scheduled principal payments due between 2007 and 2011 subject to terms of the senior indebtedness. The convertible junior subordinated note received in the amount of SEK 13,400,000 (approximately $1,781,000 face value at the date of sale with discounted value of $874,000 at December 31, 2004) bears a coupon rate of 10.0% per annum (effective yield of 25.5% per annum) payable quarterly with the entire principal or remaining unconverted principal due in 2014. This subordinated note is convertible after two years, at the Company’s option, into approximately 27.7% of the equity interest on a fully diluted basis in the acquiring company. Upon conversion to equity shares, the Company has no voting rights.

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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     As the issuer of the two subordinated notes is heavily leveraged with minimal equity, and due to the subordination feature and the payment structure of the two notes, the Company has valued the notes based on comparable yields for securities of this nature and discounted the senior subordinated note with 8.33% coupon rate and face value of $10,685,000 to $7,197,000 at the date of sale to yield 16.4% per annum, and the junior subordinated convertible note with 10.0% coupon rate and face value of $1,781,000 to $765,000 at the date of sale to yield 25.5% per annum. Foreign currency transaction gains of $1,116,000 on the U.S. dollar equivalent value of the subordinated notes and the accrued interest receivable at December 31, 2004 was recognized in the Company’s consolidated statements of operations.

     In addition, in September 2001, the Company adopted a formal plan to exit the rent-to-own business conducted by the Company’s subsidiary, Rent-A-Tire, Inc. (“Rent-A-Tire”). The Company closed 21 Rent-A-Tire operating locations and held the remaining 22 locations for sale. In conjunction with the plan, a charge was recorded in the quarter ended September 30, 2001 to establish a reserve for the estimated loss on disposal of the rental business segment. This charge included a provision for operating losses subsequent to September 1, 2001, the effective date of the plan, and a provision for the estimated loss on the sale of remaining assets. On June 14, 2002, the Company sold the assets of the 22 Rent-A-Tire stores for proceeds of approximately $3,000,000 in cash. During 2002, the Company recorded a $1,214,000 ($800,000 after income tax) reduction in the original charge to the reserve, due to both a decrease in the Company’s expected future operating lease obligations (net of expected sublease income) for closed stores and proceeds from the sale of assets in excess of the original estimate. The remaining balance of the reserve of $325,000 at December 31, 2004, consists primarily of expected future operating lease obligations (net of expected sublease income) for closed stores. The reserve is included in “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets.

     The carrying amounts of the major classes of the assets and liabilities for the discontinued operations at December 31, 2003 were as follows (in thousands):

Assets
Pawn loans	$	60,717
Merchandise held for disposition, net		6,688
Finance and service charges receivable		7,901
Other current assets		6,959
Current assets of discontinued operations		82,265
Goodwill		18,879
Other non-current assets		11,249
Non-current assets of discontinued operations		30,128
Total assets of discontinued operations	$	112,393
Liabilities
Current liabilities of discontinued operations		4,742
Deferred tax liabilities		2,652
Long-term debt		12,640
Non-current liabilities of discontinued operations		15,292
Total liabilities of discontinued operations.	$	20,034

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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     The summarized financial information for the discontinued operations for the years ended December 31, 2004, 2003 and 2002, is as follows (in thousands):

	Year Ended December 31,
	2004 (1)		2003		2002
Revenue
Finance and service charges	$	23,820	$	28,608	$	23,790
Proceeds from disposition of merchandise		15,433		18,572		12,547
Check cashing royalties and fees		1,771		1,862		1,005
Total Revenue		41,024		49,042		37,342
Cost of Revenue
Disposed merchandise		11,140		12,557		8,640
Net Revenue		29,884		36,485		28,702
Expenses
Operations		13,865		16,107		11,987
Administration		4,365		5,026		4,075
Depreciation and amortization		1,963		2,872		2,472
Total Expenses		20,193		24,005		18,534
Income from Operations		9,691		12,480		10,168
Interest expense and other, net		430		671		579
Income before Income Taxes		9,261		11,809		9,589
Provision for income taxes		2,806		3,803		2,997
Income from Operations before Gain on Disposal		6,455		8,006		6,592
Gain on disposal of discontinued operations, net of applicable of income taxes of $3,608 and $414 for 2004 and 2002, respectively		15,415		—		800	(2)
Income from Discontinued Operations	$	21,870	$	8,006	$	7,392
Diluted Income Per Share from Discontinued Operations	$	0.74	$	0.30	$	0.30

(1)	For period from January 1, 2004 through September 7, 2004 (the date of sale).
(2)	Rent-A-Tire.

5.   Cash Advances, Allowance for Losses and Accruals for Losses on Bank-Owned Cash Advances

     The Company offers the cash advance product through most of its pawnshops and cash advance locations. Cash advances are generally offered for a term of 7 to 45 days, depending on the customer’s next payday. The Company originates cash advances in some of its locations and markets and services cash advances made by third-party banks in other Company locations. The Company entered into an agreement with a second third-party bank that began offering cash advances in some of those locations in the second quarter of 2004.

     Under the banks’ program, the banks sell participation interests in the bank originated cash advances to third parties, and the Company purchases sub-participation interests in certain of those participations. The Company also receives an administrative fee for its services. In order to benefit from the use of the Company’s collection resources and proficiency, the banks assign cash advances unpaid after maturity to the Company at a discount from the amount owed by the borrower. Losses on cash advances assigned to the Company that prove uncollectible are the responsibility of the Company. To the extent that the Company collects an amount owed by the customer in excess of the amount assigned by the banks, the Company is entitled to the excess and recognizes it in income when collected. Since the Company may not be successful in the collection of the assigned accounts, the Company’s cash advance loss provision

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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

includes amounts estimated to be adequate to absorb credit losses from cash advances in the aggregate portfolio, including those expected to be assigned to the Company. The accrued losses on portfolios owned by the banks are included in “Accounts payable and accrued expenses” in the accompanying consolidated balance sheet.

     Cash advances outstanding at December 31, 2004 and 2003, were as follows (in thousands):

	2004		2003
Originated by the Company
Active cash advances and fees receivable	$	23,967	$	17,107
Cash advances and fees in collection		5,376		4,014
Total originated by the Company		29,343		21,121
Originated by banks
Active cash advances and fees receivable		17,532		9,891
Cash advances and fees in collection		4,795		2,646
Total originated by banks		22,327		12,537
Combined gross portfolio		51,670		33,658
Less: Elimination of cash advances owned by banks		10,150		1,335
Less: Discount on cash advances assigned by banks		672		529
Company cash advances and fees receivable, gross		40,848		31,794
Less: Allowance for losses		4,358		3,393
Cash advances and fees receivable, net	$	36,490	$	28,401

     Changes in the allowance for losses for the years ended December 31, were as follows (in thousands):

	2004			2003			2002
Company-owned cash advances
Balance at beginning of year	$	3,393		$	1,319		$	711
Cash advance loss provision		23,242			11,130			6,247
Charge-offs		(29,833	)		(12,453	)		(7,691	)
Recoveries		7,556			3,397			2,052
Balance at end of year	$	4,358		$	3,393		$	1,319
Accrual for bank-owned cash advances
Balance at beginning of year	$	55		$	429		$	—
Increase/(decrease) in loss provision		287			(374	)		429
Balance at end of year	$	342		$	55		$	429
Combined statistics
Combined cash advance loss provision	$	23,529		$	10,756		$	6,676
Combined cash advance loss provision as a % of combined cash advances written		3.6	%		3.6	%		5.4	%
Charge-offs (net of recoveries) as a % of combined cash advances written		3.4	%		3.0	%		4.6	%
Combined allowance for losses and accrued bank losses as a % of combined gross portfolio		9.1	%		10.2	%		14.4	%

56

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     Cash advances assigned to the Company for collection were $45,895,000 and $29,981,000 for 2004 and 2003, respectively. The Company’s participation interest in bank originated cash advances at December 31, 2004 and 2003 was $7,382,000 and $8,557,000, respectively.

6.   Property and Equipment

     Major classifications of property and equipment at December 31, 2004 and 2003, were as follows (in thousands):

	2004							2003
			Accumulated							Accumulated
	Cost		Depreciation			Net		Cost		Depreciation			Net
Land	$	3,263	$	—		$	3,263	$	2,598	$	—		$	2,598
Buildings and leasehold improvements		107,124		(50,860	)		56,264		90,684		(44,883	)		45,801
Furniture, fixtures and equipment		57,456		(33,734	)		23,722		49,514		(33,980	)		15,534
Computer software		19,350		(14,987	)		4,363		18,906		(14,987	)		3,919
Total	$	187,193	$	(99,581	)	$	87,612	$	161,702	$	(93,850	)	$	67,852

7.   Goodwill and Other Intangible Assets

     Effective January 1, 2002, all goodwill and other intangible assets having an indefinite useful life are no longer amortized to earnings but are tested for impairment annually at June 30, or more frequently if events or changes in circumstances indicate that the assets might be impaired, using a two-step impairment assessment. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, and the second step of the impairment test is not necessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The useful lives of other intangible assets must be reassessed and the remaining amortization periods adjusted accordingly.

     The Company adopted the provisions of SFAS 142 on January 1, 2002. Based on the results of the initial and the subsequent annual impairment tests, management determined that there have been no impairments.

Goodwill • Changes in the carrying value of goodwill for the years ended December 31, 2004 and 2003, were as follows (in thousands):

	Pawn			Cash			Check
	Lending			Advance			Cashing		Consolidated
Balance as of January 1, 2004, net of amortization of $20,788	$	65,934		$	27,840		$	5,310	$	99,084
Acquisitions		48,425			16,860			—		65,285
Adjustments		(18	)		(278	)		—		(296	)
Balance as of December 31, 2004	$	114,341		$	44,422		$	5,310	$	164,073
Balance as of January 1, 2003, net of amortization of $20,788	$	59,222		$	—		$	5,183	$	64,405
Acquisitions		6,712			27,840			127		34,679
Balance as of December 31, 2003	$	65,934		$	27,840		$	5,310	$	99,084

57

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Acquired Intangible Assets • Acquired intangible assets that are subject to amortization as of December 31, 2004 and 2003, were as follows (in thousands):

	2004							2003
			Accumulated							Accumulated
	Cost		Amortization			Net		Cost		Amortization			Net
Non-competition agreements	$	7,085	$	(680	)	$	6,405	$	1,800	$	(389	)	$	1,411
Customer relationships		6,069		(1,197	)		4,872		2,530		(339	)		2,191
Other		179		(70	)		109		170		(55	)		115
Total	$	13,333	$	(1,947	)	$	11,386	$	4,500	$	(783	)	$	3,717

     Non-competition agreements are amortized over the applicable terms of the contracts. Customer relationships are generally amortized over five to six years based on the pattern of economic benefits provided. Tradenames of $4,326,000 and $1,000,000 obtained in the acquisition of SuperPawn and Cashland, respectively, and licenses of $7,649,000 obtained in the SuperPawn acquisition at December 31, 2004 are not subject to amortization.

Amortization • Amortization expense for the acquired intangible assets is as follows (in thousands):

Actual amortization expense for the year ended December 31,
2004	$	1,315
2003		600
2002		478
Estimated amortization expense for the years ended December 31:
2005	$	3,155
2006		2,660
2007		2,188
2008		1,078
2009		634

8.   Accounts Payable and Accrued Expenses

           Accounts payable and accrued expenses at December 31, 2004 and 2003, were as follows (in thousands):

	2004		2003
Trade accounts payable	$	8,560	$	9,343
Accrued taxes, other than income taxes		2,577		3,615
Accrued payroll and fringe benefits		15,077		16,272
Accrued interest payable		2,540		2,696
Purchase consideration payable		1,510		—
Accrual for losses on bank-owned cash advances		342		55
Other accrued liabilities		3,248		2,435
Total	$	33,854	$	34,416

58

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9.   Long-term Debt

     The Company’s long-term debt instruments and balances outstanding at December 31, 2004 and 2003, were as follows (in thousands):

	2004		2003
U.S. line of credit up to $130,000 due July 31, 2006	$	92,483	$	68,111
8.14% senior unsecured notes due 2007		12,000		16,000
7.10% senior unsecured notes due 2008		17,143		21,429
7.20% senior unsecured notes due 2009		42,500		42,500
12.0% subordinated note due 2014		2,500		—
Total debt		166,626		148,040
Less current portion		16,786		8,286
Total long-term debt	$	149,840	$	139,754

     In connection with the sale of the foreign pawn lending operations and the acquisition of SuperPawn, the Company entered into agreements to amend certain terms and calculations of covenants under the U.S. line of credit, and the 8.14%, 7.10% and 7.20% senior notes.

     Under the terms of its U.S. line of credit agreement, as of March 31, 2004, the borrowing capacity was reduced to $130,000,000 from $135,000,000. In February 2005, the Company amended and restated the existing line of credit agreement to increase the credit limit to $250,000,000 and extend the maturity to February 2010. Interest on the amended line of credit is charged, at the Company’s option, at either LIBOR plus a margin or at the agent’s base rate. The margin on the line of credit varies from 0.875% to 1.875%, depending on the Company’s cash flow leverage ratios as defined in the amended agreement. The Company pays a fee on the unused portion ranging from 0.25% to 0.30% based on the Company’s cash flow leverage ratios as defined in the amended agreement.

     The credit agreements and the senior unsecured notes require the Company to maintain certain financial ratios. The Company is in compliance with all covenants or other requirements set forth in its debt agreements.

     Pursuant to the amended Cashland asset purchase agreement, the Company issued a subordinated note for $2,500,000 as a partial consideration of the final payment. Interest on this note accrues at 12% per annum and is payable semi-annually. The note principal is payable in nine equal annual installments beginning in February 2006. The final payment is due in February 2014. However, the note may be prepaid after February 1, 2006.

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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

      As of December 31, 2004, annual maturities of the outstanding long-term debt, including its lines of credit, for each of the five years after December 31, 2004 are as follows (in thousands):

2005	$	16,786
2006		109,546
2007		17,063
2008		13,064
2009		8,778
Thereafter		1,389
	$	166,626

10.   Income Taxes

     The components of the Company’s deferred tax assets and liabilities as of December 31, 2004 and 2003, were as follows (in thousands):

	2004			2003
Deferred tax assets:
Allowance for valuation of merchandise held for disposition	$	278		$	266
Tax over book accrual of finance and service charges		4,349			3,857
Allowance for cash advance losses		1,639			1,206
Valuation of notes receivable – sale of discontinued operations		1,165			—
Deferred compensation		2,102			1,132
Net capital losses		356			7,210
Other		1,271			1,713
Total deferred tax assets		11,160			15,384
Valuation allowance for deferred tax assets		(225	)		(7,204	)
Deferred tax assets, net		10,935			8,180
Deferred tax liabilities:
Amortization of acquired intangibles		5,861			4,224
Property and equipment		5,928			1,547
Other		852			593
Total deferred tax liabilities		12,641			6,364
Net deferred tax (liabilities) assets	$	(1,706	)	$	1,816
Balance sheet classification:
Current deferred tax assets	$	9,293		$	6,868
Non-current deferred tax liabilities		(10,999	)		(5,052	)
Net deferred tax (liabilities) assets	$	(1,706	)	$	1,816

60

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     The components of the provision for income taxes and the income to which it relates for the years ended December 31, are shown below (in thousands):

	2004		2003			2002
Income from continuing operations before income taxes	$	55,023	$	34,325		$	19,313
Current provision:
Federal	$	13,887	$	10,229		$	5,052
State and local		1,097		767			568
		14,984		10,996			5,620
Deferred provision (benefit):
Federal		5,008		1,326			1,739
State and local		66		(27	)		37
		5,074		1,299			1,776
Total provision	$	20,058	$	12,295		$	7,396

     The effective tax rate on income from continuing operations differs from the federal statutory rate of 35% for the following reasons (in thousands):

	2004			2003			2002
Tax provision computed at the federal statutory income tax rate	$	19,258		$	12,014		$	6,760
State and local income taxes, net of federal tax benefits		756			481			394
Valuation allowance		(166	)		(487	)		—
Other		210			287			242
Total provision	$	20,058		$	12,295		$	7,396
Effective tax rate		36.5	%		35.8	%		38.3	%

     As of December 31, 2004, the Company had net capital loss carryovers of $1,017,000, principally related to a previous investment. These losses may only be used to offset net capital gains. Any unused losses expire in 2006 through 2007. The deferred tax valuation allowances at December 31, 2004 and 2003 were provided to reduce deferred tax benefits of capital losses that the Company does not expect to realize. During 2004 and 2003, the Company reduced the valuation allowance by $6,979,000 and $487,000, respectively, as a result of capital gains arising during those years. The decrease in the valuation allowance during 2004 includes $6,813,000 attributable to gains recognized on disposal of discontinued foreign operations. The tax benefit resulting from that portion of the decrease reduced the tax provision on the gain from disposal of discontinued foreign operations (see Note 4). Upon adoption of SFAS 142 in 2002 (see Note 7) $406,000 of deferred tax assets was eliminated through a corresponding increase in goodwill.

61

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11.   Commitments and Contingencies

Leases • The Company leases certain of its facilities under operating leases with terms ranging from 3 to 15 years and certain rights to extend for additional periods. Future minimum rentals due under non-cancelable leases for continuing operations are as follows for each of the years ending December 31 (in thousands):

2005.	$	29,495
2006		24,344
2007		18,967
2008		13,934
2009		9,322
Thereafter		11,841
Total.	$	107,903

     Rent expense for continuing operations was $24,734,000, $21,151,000 and $19,904,000 for 2004, 2003 and 2002, respectively.

Guarantees • The Company guaranteed obligations under certain operating leases for the premises related to the 22 Rent-A-Tire stores sold in June 2002. In the event the buyer is unable to perform under the operating leases, the Company’s maximum aggregate potential obligation under these guarantees was approximately $827,000 at December 31, 2004. This amount is reduced dollar-for-dollar by future amounts paid on these operating leases by the buyer. In the event that the buyer fails to perform and the Company is required to make payments under these leases, the Company will seek to mitigate its losses by subleasing the properties or buying out of the leases. See Note 4.

Litigation • On August 6, 2004, James E. Strong filed a purported class action lawsuit in the State Court of Cobb County, Georgia against Georgia Cash America, Inc., Cash America International, Inc. (together with Georgia Cash America, Inc., “Cash America”), Daniel R. Feehan, and several unnamed officers, directors, owners and “stakeholders” of Cash America. The lawsuit alleges many different causes of action, among the most significant of which is that Cash America has been making illegal payday loans in Georgia in violation of Georgia’s usury law, the Georgia Industrial Loan Act and Georgia’s Racketeer Influenced and Corrupt Organizations Act. Community State Bank has for some time made loans to Georgia residents through Cash America’s Georgia operating locations. The complaint in this lawsuit claims that Community State Bank is not the true lender with respect to the loans made to Georgia borrowers and that its involvement in the process is “a mere subterfuge.” Based on this claim, the suit alleges that Cash America is the “de facto” lender and is illegally operating in Georgia. The complaint seeks unspecified compensatory damages, attorney’s fees, punitive damages and the trebling of any compensatory damages. The Company believes that the claims in this suit are without merit and intends to vigorously defend this lawsuit. Cash America has filed a motion to compel Mr. Strong to arbitrate his claim. Discovery has not yet commenced in this lawsuit, and as a result neither the likelihood of an unfavorable outcome nor the ultimate liability, if any, with respect to this litigation can be determined at this time. Cash America removed the case to federal court and filed a motion to compel the plaintiff to arbitrate his claim, in addition to denying the plaintiff’s allegations and asserting various defenses to his claim. The plaintiff has filed a motion to remand the case to Georgia state court. As of December 31, 2004, the parties await court rulings on the various motions. Because this case is at a very early stage, neither the likelihood of an unfavorable outcome nor the ultimate liability, if any, with respect to this litigation can be determined at this time.

     The Company is also a defendant in certain lawsuits encountered in the ordinary course of its business. Certain of these matters are covered to an extent by insurance. In the opinion of management, the resolution of these matters will not have a material adverse effect on the Company’s financial position, results of operations or liquidity.

62

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12.   Stockholders’ Equity

     During 2004, the Company received net proceeds totaling $6,067,000 from the exercise of stock options for 707,199 shares. The Company issued 578,793 and 1,533,333 treasury shares valued at $12,562,000 and $16,805,000, respectively, in connection with the acquisitions of SuperPawn in 2004 and Cashland in 2003.

     The Company received 5,605 and 436 shares of its common stock valued at $130,000, and $8,000 during 2004 and 2003, respectively, as partial payment for shares issued under stock option plans. The Company also received 21,800 shares valued at $200,000 as partial payment on officer loans.

     On July 25, 2002, the Company’s Board of Directors authorized management to purchase up to one million shares of its common stock in the open market and terminated the existing open market purchase authorization established in 2000. The following table summarizes the aggregate shares purchased under these plans during each of the three years ended December 31:

	2004		2003		2002
Shares purchased:
Under 2000 authorization		—		—		176,700
Under 2002 authorization		173,200		199,800		109,000
Total shares purchased		173,200		199,800		285,700
Aggregate amount (in thousands)	$	3,976	$	2,281	$	2,220
Average price paid per share	$	22.96	$	11.42	$	7.77

     Periodically, shares are purchased in the open market on behalf of participants relating to the Non-Qualified Savings Plan. Certain amounts are subsequently distributed or transferred to participants’ 401(k) account annually based on results of the plan’s administration testing results. Activities during each of the three years ended December 31 are summarized as follows:

	2004		2003		2002
Purchases:
Number of shares		13,355		13,756		24,206
Aggregate amount (in thousands)	$	315	$	173	$	200
Distributions and transfers to 401(k) savings plan:
Number of shares		8,162		15,834		27,855
Aggregate amount (in thousands)	$	83	$	143	$	258

     The Board of Directors adopted an officer stock loan program (the “Program”) in 1994 and modified it in 1996, 2001 and 2002. The amendment in 2002 provided that no further advances would be made to existing participants and closed the plan to new participants. Prior to the 2002 amendment, Program participants utilized loan proceeds to acquire and hold the Company’s and affiliates’ common stock by means of stock option exercises or otherwise. Common stock held as a result of the loan is pledged to the Company in support of the obligation. Interest accrues at 6% per annum. The entire unpaid balance of principal and interest on these loans is due and payable on July 24, 2007. During 2003, the Chairman of the Board of Directors sold 139,400 shares of common stock that had been pledged to the Company to secure a loan under the Program. The proceeds of $1,749,000 from the sale were used to repay the loan in full. The Company’s Chief Executive Officer and other officers also made principal and interest payments totaling $1,795,000 toward such loans during 2003. Amounts due under the Program are reflected as a reduction of stockholders’ equity in the accompanying consolidated balance sheets.

63

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13.   Employee Benefit Plans

     The Cash America International, Inc. 401(k) Savings Plan is open to substantially all employees who meet specific length of employment and age requirements. The Cash America International, Inc. Nonqualified Savings Plan is available to certain members of management. Participants may contribute up to 50% of their earnings to these plans. The Company makes matching cash contributions of 50% of each participant’s contributions, based on participant contributions of up to 5% of compensation. Company contributions vest at the rate of 20% each year after one year of service; thus a participant is 100% vested after five years of service. The Company’s total contributions to the 401(k) Savings plan for the continuing operations were $952,000, $716,000 and $617,000 in 2004, 2003 and 2002, respectively.

     In addition to the retirement plans mentioned above, the Company established a Supplemental Executive Retirement Plan (“SERP”) for its officers in 2003. The Company makes an annual discretionary cash contribution to the SERP based on the objectives of the plan as approved by the Management Development and Compensation Committee of the Board of Directors. The Company recorded compensation expense of $455,000 and $432,000 for contributions to the SERP during 2004 and 2003, respectively.

     The amounts included in the Company’s consolidated balance sheets relating to the Nonqualified Savings Plan and the SERP were as follows (in thousands):

	As of December 31,
	2004		2003
Other receivables and prepaid expenses	$	3,910	$	2,799
Accounts payable and accrued expenses		3,910		2,799
Other liabilities		630		412
Treasury shares		873		634

14.   Derivative Instruments and Hedging Activities

     The Company entered into an interest rate cap agreement on December 31, 2004 with a notional amount of $12,000,000 of the Company’s outstanding floating rate U.S. line of credit for a term of 12 months at a fixed rate of 4.0%. This interest rate cap is not designated as a cash flow hedge or a fair value hedge pursuant to SFAS 133, SFAS 138 and SFAS149. The fair value of the interest rate cap agreement of $9,000 at December 31, 2004 is included in “Other assets” of the accompanying consolidated balance sheet. There was no derivative instrument outstanding at December 31, 2003.

     The accompanying consolidated statements of operations include losses from derivative valuation fluctuations of $177,000 during the year ended December 31, 2002 as a result of adjustments to the estimated fair value of interest rate cap agreements.

15.   Stock Purchase Rights

     In August 1997, the Board of Directors declared a dividend distribution of one Common Stock Purchase Right (the “Rights”) for each outstanding share of its common stock. The Rights become exercisable in the event a person or group acquires 15% or more of the Company’s common stock or announces a tender offer, the consummation of which would result in ownership by a person or group of 15% or more of the common stock. If any person becomes a 15% or more shareholder of the Company, each Right (subject to certain limits) will entitle its holder (other than such person or members of such group) to purchase, for $37.00, the number of shares of the Company’s common stock determined by dividing $74.00 by the then current market price of the common stock. The Rights will expire on August 5, 2007.

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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

16.   Stock Options and Restricted Stock Units

     Under various equity compensation plans (the “Plans”) it sponsors, the Company is authorized to issue 8,300,000 shares of Common Stock pursuant to “Awards” granted as incentive stock options (intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended), nonqualified stock options and restricted stock units.

Stock Options • Stock options granted under the Plans have contractual terms of 5 to 15 years and have an exercise price equal to or greater than the fair market value of the stock at grant date. Stock options granted vest over periods ranging from 1 to 7 years. However, the terms of options with the 7-year vesting periods and certain of the 4-year and 5-year vesting periods include provisions which accelerate vesting if specified share price appreciation criteria are met. During 2004 and 2003, 576,547 and 1,021,725 shares vested due to the acceleration provisions. No accelerated vesting of stock options occurred in 2002.

     A summary of the Company’s stock option activity for each of the three years ended December 31, is as follows (shares in thousands):

	2004						2003						2002
					Weighted						Weighted						Weighted
					Average						Average						Average
					Exercise						Exercise						Exercise
	Shares				Price		Shares				Price		Shares				Price
Outstanding at beginning of year		2,342			$	9.75		4,374			$	8.13		3,997			$	8.16
Granted		—				—		572				10.80		428				7.99
Exercised		(707	)			8.58		(2,565	)			7.22		(7	)			5.70
Forfeited		(2	)			10.13		(39	)			9.65		(44	)			9.44
Outstanding at end of year		1,633			$	10.26		2,342			$	9.75		4,374			$	8.13
Exercisable at end of year		1,583			$	10.04		1,559			$	9.29		2,898			$	7.54
Weighted average fair value of options granted			$	—					$	7.37					$	6.22

     Stock options outstanding and exercisable as of December 31, 2004, are summarized below (shares in thousands):

Options Outstanding							Options Exercisable
					Weighted Average				Weighted
			Weighted		Years of				Average
Range of	Number		Average		Remaining		Number		Exercise
Exercise Prices	Outstanding		Exercise Price		Contractual Life		Exercisable		Price
$    5.94   to   $    9.41		329	$	7.94		5.2		329	$	7.94
$    9.42   to   $  12.63		1,164		10.19		5.1		1,164		10.19
$  12.64   to   $  17.14		140		16.32		7.0		90		15.86
$    5.94   to   $  17.14		1,633	$	10.26		5.3		1,583	$	10.04

Restricted Stock Units • In January 2004, the Company changed its approach to annual equity based compensation awards and granted restricted stock units to its officers under the provisions of the 1994 Long-Term Incentive Plan in lieu of stock options. In April 2004, the Company adopted the 2004 Long-Term Incentive Plan, which was approved by shareholders at the 2004 annual shareholders meeting held April 21, 2004 and granted restricted stock units to the non-management members of the Board of Directors.

65

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The aggregate fair value of these restricted units was $2,597,000 based on their market value as of the date of the grant. The amount attributable to officer grants is being amortized to expense over a four-year period, as the officer units vest on each of the first four anniversaries of the grant date. Director units have the same vesting schedule, but for directors with five or more years of service the vesting of units held for one year or more accelerates upon the director’s departure from the Board. Because all of the Company’s current directors have served for more than five years, the market value of the units attributable to directors is being amortized to expense over a one-year period.

     In December 2003, the Company granted restricted stock units to its officers in conjunction with the adoption of the Supplemental Executive Retirement Plan. Each vested restricted stock unit entitles the holder to receive a share of the common stock of the Company to be issued upon termination of employment from the Company. The aggregate fair value of these restricted stock units was $4,485,000 based on their market value as of the date of grant. This amount is being amortized to expense over the vesting periods of 4 to 15 years.

     Compensation expense totaling $1,199,000 ($779,000 net of related taxes) and $14,000 ($9,000 net of related taxes) were recognized for 2004 and 2003, respectively, for all of the above restricted stock units granted.

     The following table summarizes the restricted stock units activity during 2004 and 2003:

	2004					2003
				Weighted				Weighted
				Average				Average
				Fair Value				Fair Value
				at Date of				at Date of
	Units			Grant		Units		Grant
Outstanding at beginning of year		233,223		$	19.23		—	$	—
Granted		114,749			22.63		233,223		19.23
Forfeited		(5,174	)		22.84		—		—
Outstanding at end of year		342,798		$	20.31		233,223	$	19.23
Restricted stock units vested at end of year		26,111		$	19.23		—	$	—

17.   Supplemental Disclosures of Cash Flow Information

     The following table sets forth certain cash and non-cash activities for the years ended December 31 (in thousands):

	2004		2003		2002
Cash paid during the year for —
Interest	$	8,274	$	11,238	$	7,769
Income taxes		11,067		6,542		382
Non-cash investing and financing activities —
Pawn loans forfeited and transferred to merchandise held for disposition	$	130,971	$	122,548	$	119,333
Pawn loans renewed		46,008		40,875		36,387
Cash advances renewed		7,404		5,969		4,042
Notes payable issued in acquisition		2,500		—		—
Notes receivable received from sale of subsidiaries		7,962		—		—
Common stock issued in acquisitions		12,562		16,805		—
Liabilities assumed in acquisitions		950		176		5

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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

18.   Operating Segment Information

     During the quarter ended March 31, 2004, the Company realigned its segment reporting to reflect the business mix and management reporting structure. The Company’s continuing operations has three reportable operating segments, the pawn lending operations; the cash advance operations; and the check cashing operations (Mr. Payroll). Cash advance and check cashing are managed separately due to the different operational strategies required and therefore, are reported as separate segments.

     The accounting policies of the segments are the same as those described in Note 2. Management of the Company evaluates performance based on income from operations before net interest expense, other miscellaneous items of income or expense, and the provision for income taxes. There are no sales between operating segments.

     As described in Note 4, the Company reclassified the results of operations of its foreign lending operations and rent-to-own business as discontinued operations. These businesses were previously reported as a separate operating segment. The segment data included below has been restated to exclude amounts related to these discontinued operations.

     Information concerning the operating segments is set forth below (in thousands):

	Pawn		Cash		Check
	Lending		Advance		Cashing		Consolidated
Year Ended December 31, 2004:
Revenue
Finance and service charges	$	110,495	$	—	$	—	$	110,495
Proceeds from disposition of merchandise		250,291		—		—		250,291
Cash advance fees		32,952		66,250		—		99,202
Check cashing royalties and fees		—		5,904		3,586		9,490
Total revenue		393,738		72,154		3,586		469,478
Cost of revenue — disposed merchandise		153,866		—		—		153,866
Net revenue		239,872		72,154		3,586		315,612
Expenses
Operations		134,878		36,982		1,417		173,277
Cash advance loss provision		8,750		14,779		—		23,529
Administration		30,034		9,178		971		40,183
Depreciation and amortization		11,984		4,754		472		17,210
Total expenses		185,646		65,693		2,860		254,199
Income from operations	$	54,226	$	6,461	$	726	$	61,413
Expenditures for property and equipment	$	14,107	$	14,269	$	115	$	28,491
As of December 31, 2004:
Total assets	$	442,420	$	105,650	$	7,095	$	555,165

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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

	Pawn		Cash		Check
	Lending		Advance		Cashing		Consolidated
Year Ended December 31, 2003:
Revenue
Finance and service charges	$	100,699	$	—	$	—	$	100,699
Proceeds from disposition of merchandise		236,032		—		—		236,032
Cash advance fees		27,017		19,938		—		46,955
Check cashing royalties and fees		—		1,381		3,568		4,949
Total revenue		363,748		21,319		3,568		388,635
Cost of revenue — disposed merchandise		147,456		—		—		147,456
Net revenue		216,292		21,319		3,568		241,179
Expenses
Operations		130,076		11,179		1,561		142,816
Cash advance loss provision		6,435		4,321		—		10,756
Administration		29,177		2,598		744		32,519
Depreciation and amortization		11,349		1,387		533		13,269
Total expenses		177,037		19,485		2,838		199,360
Income from operations	$	39,255	$	1,834	$	730	$	41,819
Expenditures for property and equipment	$	11,530	$	4,458	$	75	$	16,063
As of December 31, 2003:
Total assets	$	302,863	$	66,971	$	7,360	$	377,194
Year Ended December 31, 2002:
Revenue
Finance and service charges	$	94,458	$	—	$	—	$	94,458
Proceeds from disposition of merchandise		233,396		—		—		233,396
Cash advance fees		19,084		—		—		19,084
Check cashing royalties and fees		—		—		3,563		3,563
Total revenue		346,938		—		3,563		350,501
Cost of revenue — disposed merchandise		152,071		—		—		152,071
Net revenue		194,867		—		3,563		198,430
Expenses
Operations		124,471		—		1,440		125,911
Cash advance loss provision		6,676		—		—		6,676
Administration		24,874		—		610		25,484
Depreciation and amortization		11,794		—		693		12,487
Total expenses		167,815		—		2,743		170,558
Income from operations	$	27,052	$	—	$	820	$	27,872
Expenditures for property and equipment	$	8,740	$	—	$	363	$	9,103
As of December 31, 2002:
Total assets	$	279,118	$	150	$	7,738	$	287,006

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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

19.   Related Party Transactions

     In December 1999, the Company sold three pawnshops, including certain real estate, for $4,520,000 to Ace Pawn, Inc (“Ace”) whose sole stockholder, J.D. Credit, Inc. (“J. D. Credit”) is controlled by the Chairman of the Board of Directors of the Company. The purchase price was determined by independent appraisal and approved by the Board of Directors of the Company. A gain of $2,224,000 was recognized on the transaction. The Company received promissory notes from Ace that were collateralized by all of its assets. In addition, J.D. Credit pledged the common stock of Ace and the Chairman of the Board provided a personal guaranty for repayment of the notes. The notes required quarterly principal payments and interest payments at 10% per annum with a final balloon payment due in December 2002. Ace paid off the notes in full on January 13, 2003. The Company recorded interest income from the notes of $9,000 and $285,000 in 2003 and 2002, respectively.

     Upon completion of the sale, the three pawnshops were converted to Company franchise units. Royalties recorded by the Company for these units were $54,000, $77,000 and $83,000 for 2004, 2003, and 2002, respectively. The Company has the right of first refusal in the event of a proposed resale of these pawnshops.

     In October 2003, the Company purchased one of the pawnshops from Ace for $2,461,000 cash. The purchase price was determined by independent appraisal and approved by the Board of Directors of the Company.

     In February 2004, pursuant to the amended Cashland asset purchase agreement, the Company made a final payment of additional consideration in the amount of $5,400,000 to the seller, who was a senior officer of the Company through January 31, 2005. The payment consisted of $2,900,000 in cash and a subordinated note for $2,500,000 (see Note 9). The Company recorded interest expense of $275,000 in 2004. At December 31, 2004, the accrued interest payable on this note was $125,000. The Company also paid rent of $122,000 and $51,000 during 2004 and 2003, respectively, for three Cashland administrative offices and facilities that are owned by the seller.

     Under the Company’s now discontinued officer stock loan program, the Company recorded interest income of $150,000 and $299,000, respectively, in 2004 and 2003. During 2003, the Company’s Chief Executive Officer and other officers made total principal and interest payment of $3,544,000 on these notes. At December 31, 2004 and 2003, the outstanding notes balance was $2,488,000, and accrued interest on these notes was $435,000 and $286,000, respectively.

69

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

20.   Fair Values of Financial Instruments

     The carrying amounts and estimated fair values of financial instruments at December 31, 2004 and 2003, were as follows (in thousands):

	2004				2003
	Carrying		Estimated		Carrying		Estimated
	Value		Fair Value		Value		Fair Value
Financial assets:
Cash and cash equivalents	$	15,103	$	15,103	$	11,959	$	11,959
Pawn loans		109,353		109,353		81,154		81,154
Cash advances, net		36,490		36,490		28,401		28,401
Subordinated notes receivable		9,136		9,243		—		—
Interest rate cap		9		9		—		—
Financial liabilities:
Bank lines of credit	$	92,483	$	92,483	$	68,111	$	68,111
Senior unsecured notes		71,643		73,963		79,929		84,480
Subordinated note		2,500		2,683		—		—

     Cash and cash equivalents bear interest at market rates and have maturities of less than 90 days. Pawn loans have relatively short maturity periods depending on local regulations, generally 90 days or less. Cash advances have maturity periods of 45 days or less. Finance and service charge rates are determined by regulations and bear no valuation relationship to the capital markets’ interest rate movements. Generally, pawn loans may only be resold to a licensed pawnbroker.

     The fair value of the subordinated notes receivables are estimated by taking the present value of the expected cash flow over the life of the notes discounted at a rate prevalent to financial instruments with similar credit profiles and like terms.

     The Company’s bank credit facility bears interest at a rate that is frequently adjusted on the basis of market rate changes. The fair values of the remaining long-term debt instruments are estimated based on market values for debt issues with similar characteristics or rates currently available for debt with similar terms.

70

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

21.   Quarterly Financial Data (Unaudited)

     The Company’s operations are subject to seasonal fluctuations. Revenue tends to be highest during the first and fourth calendar quarters, when the average amount of pawn loans and cash advance balances are the highest and consistent with heavier disposition of merchandise activities compared to the other two quarters. The following is a summary of the quarterly results of operations for the years ended December 31, 2004 and 2003 (in thousands, except per share data):

	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
2004 (1)
Total revenue	$	117,018	$	101,143	$	110,536	$	140,781
Cost of revenue		40,829		31,338		33,588		48,111
Net revenue		76,189		69,805		76,948		92,670
Income from continuing operations		9,142		4,926		7,181		13,716
Income from discontinued operations (2)		2,248		2,413		16,483		726
Net income		11,390		7,339		23,664		14,442
Diluted income per share –
Income from continuing operations	$	0.31	$	0.17	$	0.24	$	0.46
Income from discontinued operations		0.08		0.08		0.56		0.02
Net income		0.39		0.25		0.80		0.48
Diluted weighted average common shares		29,453		29,443		29,522		29,884
2003 (1)
Total revenue	$	95,320	$	82,305	$	95,038	$	115,972
Cost of revenue		39,503		31,984		33,599		42,370
Net revenue		55,817		50,321		61,439		73,602
Income from continuing operations		4,999		3,743		4,085		9,203
Income from discontinued operations		1,770		1,908		1,957		2,371
Net income		6,769		5,651		6,042		11,574
Diluted income per share –
Income from continuing operations	$	0.20	$	0.15	$	0.15	$	0.32
Income from discontinued operations		0.07		0.08		0.07		0.08
Net income		0.27		0.22		0.22		0.40
Diluted weighted average common shares		24,784		25,128		27,197		28,921

(1)	On September 7, 2004, the Company sold its foreign pawn lending operations; all prior periods presented have been restated to reflect that business as discontinued operations.
(2)	Income from discontinued operations includes a gain on sale of $15,415 (after related taxes of $3,608) for the quarter end September 30, 2004.

71

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

     None.

ITEM 9A. CONTROLS AND PROCEDURES

     Under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, management of the Company has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of December 31, 2004 (“Evaluation Date”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are effective in timely alerting them to the material information relating to the Company required to be included in its periodic filings with the Securities and Exchange Commission.

     The Report of Management on Internal Control Over Financial Reporting is included in Item 8 of this annual report on Form 10-K. There have been no significant changes during the fourth quarter of the year ended December 31, 2004 in the Company’s internal control over financial reporting that was identified in connection with management’s evaluation described in Item 9A above and has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Management’s assessment of the Company’s internal control over financial reporting excluded the pawn operating assets acquired from Camco, Inc., which operated under the trade name “SuperPawn,” because they were acquired by the Company in a purchase transaction during 2004.

     The Company’s management, including its Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s disclosure controls and procedures or internal controls will prevent all possible error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

72

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Information required by this Item 10 with respect to directors, the Audit Committee of the Board of Directors and Audit Committee financial experts is incorporated into this report by reference to the Company’s Proxy Statement for the 2005 Annual Meeting of Shareholders (“Proxy Statement”), and in particular to the information in the Proxy Statement under the captions “Election of Directors” and “Meetings and Committees of the Board of Directors.” Information concerning executive officers is contained in Item 1 of this report under the caption “Executive Officers of the Registrant.” Information regarding Section 16(a) compliance is incorporated into this report by reference to the information contained under the caption “Compliance With Section 16(a) of the Securities Exchange Act of 1934” in the Proxy Statement.

     The Company has adopted a Code of Business Conduct and Ethics that applies to all of its directors, officers, and employees. This Code is publicly available on the Company’s website at www.cashamerica.com. Amendments to this Code and any grant of a waiver from a provision of the Code requiring disclosure under applicable SEC rules will be disclosed on the Company’s website. These materials may also be requested in print and without charge by writing to the Company’s Secretary at Cash America International, Inc., 1600 West 7^th Street, Fort Worth, Texas 76102.

ITEM 11. EXECUTIVE COMPENSATION

     Information contained under the caption “Executive Compensation” in the Proxy Statement is incorporated by reference into this report in response to this Item 11.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Information contained under the captions “Security Ownership of Certain Beneficial Owners and Management” and “Executive Compensation – Equity Compensation Plan Information” in the Proxy Statement is incorporated into this report by reference in response to this Item 12.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Information contained under the caption “Executive Compensation” in the Proxy Statement is incorporated into this report by reference in response to this Item 13.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

     Information contained under the caption “Independent Registered Public Accounting Firm” in the Proxy Statement is incorporated into this report by reference in response to this Item 14.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)	(1)	Financial Statements: See Item 8, “Financial Statements and Supplementary Data,” on pages 38 through 71 hereof, for a list of the Company’s consolidated financial statements and report of independent registered accounting firm.
	(2)	Financial Statement Schedule: The following financial statement schedule of the Company is included herein on pages 75 through 76.
		Report of Independent Registered Public Accounting Firm on Financial Statement Schedule (page 75)

	Schedule II – Valuation Accounts (page 76)
	All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions, are inapplicable, or the required information is included elsewhere in the financial statements.
(3)	Exhibits required by Item 601 of Regulation S-K: The exhibits filed in response to this item are listed in the Exhibit Index on pages 77 through 79.

73

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 25, 2005.

CASH AMERICA INTERNATIONAL, INC.
By:	/s/	DANIEL R. FEEHAN
		Daniel R. Feehan
		Chief Executive Officer and President

     Pursuant to the requirements of the Securities and Exchange Act of 1934, the report has been signed by the following persons on February 25, 2004 on behalf of the registrant and in the capacities indicated.

Signature	Title	Date
/s/ JACK R. DAUGHERTY	Chairman of the Board	February 25, 2005
	of Directors
Jack R. Daugherty
/s/ DANIEL R. FEEHAN	Chief Executive Officer,	February 25, 2005
	President and Director
Daniel R. Feehan	(Principal Executive Officer)
/s/ THOMAS A. BESSANT, JR.	Executive Vice President and	February 25, 2005
	Chief Financial Officer
Thomas A. Bessant, Jr.	(Principal Financial and
	Accounting Officer)
/s/ A. R. DIKE	Director	February 25, 2005
A. R. Dike
/s/ JAMES H. GRAVES	Director	February 25, 2005
James H. Graves
/s/ B. D. HUNTER	Director	February 25, 2005
B. D. Hunter
/s/ TIMOTHY J. McKIBBEN	Director	February 25, 2005
Timothy J. McKibben
/s/ ALFRED M. MICALLEF	Director	February 25, 2005
Alfred M. Micallef

74

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON FINANCIAL STATEMENT SCHEDULE

To the Board of Directors of
Cash America International, Inc.

     Our audits of the consolidated financial statements, of management’s assessment of the effectiveness of internal control over financial reporting and of the effectiveness of internal control over financial reporting referred to in our report dated February 24, 2005 appearing in this Annual Report on Form 10-K also included an audit of the financial statement schedule listed in Item 15(a)(2) of this Form 10-K. In our opinion, this financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

/s/ PricewaterhouseCoopers LLP

Fort Worth, Texas
February 24, 2005

75

SCHEDULE II

CASH AMERICA INTERNATIONAL, INC.
VALUATION ACCOUNTS
For the Three Years Ended December 31, 2004
(dollars in thousands)

			Additions
	Balance at		Charged			Charged						Balance at
	Beginning		To			to						End
Description	of Period		Expense			Other			Deductions			of Period
Allowance for losses on cash advances –
Year Ended:
December 31, 2004	$	3,393	$	23,242		$	7,556	(a)	$	29,833		$	4,358
December 31, 2003	$	1,319	$	11,130		$	3,397	(a)	$	12,453		$	3,393
December 31, 2002	$	711	$	6,247		$	2,052	(a)	$	7,691		$	1,319
Accrual for losses on bank-owned cash advances –
Year Ended:
December 31, 2004	$	55	$	287		$	—		$	—		$	342
December 31, 2003	$	429	$	(374	)	$	—		$	—		$	55
December 31, 2002	$	—	$	429		$	—		$	—		$	429
Allowance for valuation of inventory –
Year Ended:
December 31, 2004	$	1,410	$	542		$	—		$	507	(b)	$	1,445
December 31, 2003	$	1,435	$	552		$	—		$	577	(b)	$	1,410
December 31, 2002	$	1,585	$	696		$	—		$	846	(b)	$	1,435
Allowance for valuation of deferred tax assets –
Year Ended:
December 31, 2004	$	7,204	$	—		$	—		$	6,979	(c)	$	225
December 31, 2003	$	7,691	$	(487	)	$	—		$	—		$	7,204
December 31, 2002	$	7,628	$	63		$	—		$	—		$	7,691
Allowance for valuation of discontinued operations (d) –
Year Ended:
December 31, 2004	$	389	$	30		$	—		$	94		$	325
December 31, 2003	$	623	$	36		$	—		$	270		$	389
December 31, 2002	$	8,093	$	(1,214	)	$	—		$	6,256		$	623

(a)	Recoveries.
(b)	Deducted from allowance for write-off or other disposition of merchandise.
(c)	Includes $6,813 attributable to gains recognized on disposal of discontinued foreign operations.
(d)	Represents amounts related to business discontinued in 2001.

76

EXHIBIT INDEX

     The following documents are filed as a part of this report. Those exhibits previously filed and incorporated herein by reference are identified by reference to the list of prior filings after the list of exhibits. Exhibits not required for this report have been omitted.

Exhibit	Description
3.1	Articles of Incorporation of Cash America Investments, Inc. filed in the office of the Secretary of State of Texas on October 4, 1984. (a) (Exhibit 3.1)
3.2	Articles of Amendment to the Articles of Incorporation of Cash America Investments, Inc. filed in the office of the Secretary of State of Texas on October 26, 1984. (a) (Exhibit 3.2)
3.3	Articles of Amendment to the Articles of Incorporation of Cash America Investments, Inc. filed in the office of the Secretary of State of Texas on September 24, 1986. (a) (Exhibit 3.3)
3.4	Articles of Amendment to the Articles of Incorporation of Cash America Investments, Inc. filed in the office of the Secretary of State of Texas on September 30, 1987. (b) (Exhibit 3.4)
3.5	Articles of Amendment to the Articles of Incorporation of Cash America Investments, Inc. filed in the office of the Secretary of State of Texas on April 23, 1992 to change the Company’s name to “Cash America International, Inc.” (c) (Exhibit 3.5)
3.6	Articles of Amendment to the Articles of Incorporation of Cash America International, Inc. filed in Office of the Secretary of State of Texas on May 21, 1993. (d) (Exhibit 3.6)
3.7	Bylaws of Cash America International, Inc. (e) (Exhibit 3.5)
3.8	Amendment to Bylaws of Cash America International, Inc. dated effective September 26, 1990. (f) (Exhibit 3.6)
3.9	Amendment to Bylaws of Cash America International, Inc. dated effective April 22, 1992. (c) (Exhibit 3.8)
4.1	Form of Stock Certificate. (c) (Exhibit 4.1)
10.1	Note Agreement between the Company and Teachers Insurance and Annuity Association of America dated as of July 7, 1995. (g) (Exhibit 10.1)
10.2	First Supplement (November 10, 1995) to 1995 Note Agreement between the Company and Teachers Insurance and Annuity Association of America. (h) (Exhibit 10.2)
10.3	Second Supplement (December 30, 1996) to 1995 Note Agreement between the Company and Teachers Insurance and Annuity Association of America. (i) (Exhibit 10.16)
10.4	Third Supplement (December 30, 1997) to 1995 Note Agreement between the Company and Teachers Insurance and Annuity Association of America. (j) (Exhibit 10.20)
10.5	Fourth Supplement (December 31, 1998) to 1995 Note Agreement between the Company and Teachers Insurance and Annuity Association of America. (k) (Exhibit 10.23)
10.6	Fifth Supplement (September 29, 1999) to 1995 Note Agreement between the Company and Teachers Insurance and Annuity Association of America. (l) (Exhibit 10.2)
10.7	Sixth Supplement (June 30, 2000) to 1995 Note Agreement between the Company and Teachers Insurance and Annuity Association of America. (m) (Exhibit 10.2)
10.8	Seventh Supplement (September 30, 2001) to 1995 Note Agreement between the Company and Teachers Insurance and Annuity Association of America. (n) (Exhibit 10.26)
10.9	Eighth Supplement (September 7, 2004) to 1995 Note Agreement between the Company and Teachers Insurance and Annuity Association of America. (o) (Exhibit 10.1)
10.10	Note Agreement dated as of December 1, 1997 among the Company and the Purchasers named therein for the issuance of the Company’s 7.10% Senior Notes due January 2, 2008 in the aggregate principal amount of $30,000,000. (j) (Exhibit 10.23)
10.11	First Supplement (December 31, 1998) to Note Agreement dated as of December 1, 1997 among the Company and the purchasers named therein. (k) (Exhibit 10.29)

77

Exhibit	Description
10.12	Second Supplement (September 29, 1999) to Note Agreement dated as of December 1, 1997 among the Company and the purchasers named therein. (l) (Exhibit 10.1)
10.13	Third Supplement (June 30, 2000) to Note Agreement dated as of December 1, 1997 among the Company and the purchasers named therein. (m) (Exhibit 10.1)
10.14	Fourth Supplement (September 30, 2000) to Note Agreement dated as of December 1, 1997 among the Company and the purchasers named therein. (n) (Exhibit 10.38)
10.15	Fifth Supplement (September 7, 2004) to Note Agreement dated as of December 1, 1997 among the Company and the purchasers named therein. (o) (Exhibit 10.1)
10.16	Note Agreement dated as of August 12, 2002 among the Company and the Purchasers named therein for the issuance of the Company’s 7.20% Senior Notes due August 12, 2009 in the aggregate principal amount of $42,500,000. (p) (Exhibit 10.1)
10.17	Amendment No. 1 (September 7, 2004) to Note Agreement dated as of August 12, 2002 among the Company and the purchasers named therein. (o) (Exhibit 10.1)
10.18	Supplemental Executive Retirement Plan dated effective January 1, 2003. (q) (Exhibit 10.32)
10.19	Executive Change-in-Control Severance Agreement dated December 22, 2003 between the Company and each of its Executive Vice Presidents (Thomas A. Bessant, Jr., Robert D. Brockman, Jerry D. Finn, Michael D. Gaston, William R. Horne, James H. Kauffman, Hugh A. Simpson) (q) (Exhibit 10.31)
10.20	Amended and Restated Executive Employment Agreement between the Company and Mr. Feehan dated as of January 21, 2004. (q) (Exhibit 10.30)
10.21	2004 Long-Term Incentive Plan.
10.22	First Amended and Restated Credit Agreement among the Company, certain lenders named therein, and Wells Fargo Bank, National Association, as Administrative Agent dated as of February 24, 2005.
14	Code of Ethics. The Company’s Code of Business Conduct and Ethics may be accessed via the Company’s website at www.cashamerica.com.
21	Subsidiaries of Cash America International, Inc.
23	Consent of PricewaterhouseCoopers LLP.
31.1	Certification of Chief Executive Officer.
31.2	Certification of Chief Financial Officer.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certain Exhibits are incorporated by reference to the Exhibits shown in parenthesis contained in the Company’s following filings with the Securities and Exchange Commission:

(a)	Registration Statement Form S-1, File No. 33-10752.
(b)	Amendment No. 1 to its Registration Statement on Form S-4, File No. 33-17275.
(c)	Annual Report on Form 10-K for the year ended December 31, 1992.
(d)	Annual Report on Form 10-K for the year ended December 31, 1993.
(e)	Post-Effective Amendment No. 1 to its Registration Statement on Form S-4, File No. 33-17275.
(f)	Annual Report on Form 10-K for the year ended December 31, 1990.
(g)	Quarterly Report on Form 10-Q for the quarter ended June 30, 1995.
(h)	Quarterly Report on Form 10-Q for the quarter ended September 30, 1995.
(i)	Annual Report on Form 10-K for the year ended December 31, 1996.
(j)	Annual Report on Form 10-K for the year ended December 31, 1997.

78

Exhibit	Description
(k)	Annual Report on Form 10-K for the year ended December 31, 1998.
(l)	Quarterly Report on Form 10-Q for the quarter ended September 30, 1999.
(m)	Quarterly Report on Form 10-Q for the quarter ended September 30, 2000.
(n)	Annual Report on Form 10-K for the year ended December 31, 2001.
(o)	Current Report on Form 8-K dated September 7, 2004.
(p)	Current Report on Form 8-K dated August 15, 2002.
(q)	Annual Report on Form 10-K for the year ended December 31, 2003.

79

EX-10.21

Exhibit 10.21

CASH AMERICA INTERNATIONAL, INC.
2004 LONG-TERM INCENTIVE PLAN

SECTION 1. PURPOSE

     The purpose of the Plan is to promote the interests of the Company and its stockholders by giving the Company a competitive advantage in attracting, retaining and motivating employees, officers, consultants and Directors capable of assuring the future success of the Company, to offer such persons incentives that are directly linked to the profitability of the Company’s business and increases in stockholder value, and to afford such persons an opportunity to acquire a proprietary interest in the Company.

SECTION 2. DEFINITIONS

     “Act” shall mean the Securities Act of 1933, as amended from time to time.

     “Affiliate” shall mean any entity that, directly or indirectly through one or more intermediaries, is controlled by, controlling or under common control with the Company.

     “Applicable Laws” shall mean the legal requirements relating to the administration of stock incentive plans, if any, under applicable provisions of federal securities laws, state corporate and securities laws, the Code, the rules of any applicable stock exchange or national market system, and the rules of any foreign jurisdiction applicable to Awards granted to residents therein.

     “Award” shall mean a grant or award granted under the Plan, as evidenced by an Award Agreement.

     “Award Agreement” shall mean any written agreement, contract or other instrument or document evidencing any Award granted under the Plan. Each Award Agreement shall be subject to the applicable terms and conditions of the Plan and any other terms and conditions (not inconsistent with the Plan) determined by the Committee.

     “Board of Directors” shall mean the Board of Directors of the Company.

     “Change in Control” shall have the meaning set forth in Section 14 of the Plan.

     “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder.

1

     “Committee” shall mean a committee of Directors designated by the Board to administer the Plan, which shall initially be the Management Development and Compensation Committee of the Board of Directors. The Committee shall be composed of not less than such number of Directors as shall be required to permit Awards granted under the Plan to qualify under Rule 16b-3 and under Section 162(m) of the Code, and each member of the Committee shall be an Outside Director.

     “Common Stock” or “Stock” shall mean the Common Stock of the Company.

     “Company” shall mean Cash America International, Inc., a Texas corporation.

     “Covered Employee” shall mean a Participant designated prior to the grant of an Award by the Committee who is or may be a “covered employee” within the meaning of Section 162(m)(3) of the Code in the year in which any such Award is granted or in the year in which such Award is expected to be taxable to such Participant.

     “Designated Beneficiary” shall mean the beneficiary designated by the Participant, in a manner determined by the Committee, to receive amounts due the Participant in the event of the Participant’s death. In the absence of an effective designation by the Participant, the term “Designated Beneficiary” shall mean the Participant’s estate.

     “Director” shall mean a member of the Board, including any Outside Director.

     “Effective Date” shall have the meaning set forth in Section 15 of the Plan.

     “Eligible Individual” shall mean any employee, officer, Director or consultant providing services to the Company or any Affiliate, and prospective employees and consultants who have accepted offers of employment or consultancy from the Company or any Affiliate, whom the Committee determines to be an Eligible Individual.

     “Employee” shall mean any person treated as an employee (including an officer or a Director who is also treated as an employee) in the records of the Company or any Affiliate and, with respect to any Incentive Stock Option granted to such person, who is an employee for purposes of Section 422 of the Code; provided, however, that neither service as a Director nor payment of a Director’s fee shall be sufficient to constitute employment for purposes of the Plan. The Company shall determine in good faith and in the exercise of its discretion whether an individual has become or has ceased to be an Employee and the effective date of such individual’s employment or termination of employment without regard to any notice period or period of “garden leave”, as the case may be. For purposes of an individual’s rights, if any, under the Plan as of the time of the Company’s determination, all such determinations by the Company shall be final, binding and conclusive, notwithstanding that the Company or any court of law or governmental agency subsequently makes a contrary determination.

     “Employer” shall mean the Company or any Affiliate.

2

     “Exercise Price” has the meaning set forth in Section 6 of the Plan.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

     “Fair Market Value” shall mean the closing price of the Common Stock on the last day prior to the date in question on which the Stock was traded on the New York Stock Exchange or such other national securities market or exchange as may at the time be the principal market for the Common Stock as designated by the Committee, or if the Shares were not traded on such national securities market or exchange on such date, then on the next preceding date on which the Shares are traded, all as reported by such source as the Committee may select.

     “Fiscal Year” shall mean the fiscal year of the Company beginning on January 1 and ending on the following December 31.

     “Incentive Stock Option” means any Stock Option granted under Section 6 of the Plan that is designated as, and intended to qualify as, an “incentive stock option” within the meaning of Section 422 of the Code.

     “Non-Stock-Based Incentive Compensation” refers to incentive compensation whose value is not based in whole or in part on the value of Common Stock.

     “Nonqualified Stock Option” means any Option granted under Section 6 of the Plan that is not an Incentive Stock Option.

     “Option” shall mean an Incentive Stock Option or a Nonqualified Stock Option.

     “Outside Director” means any Director who qualifies as an “outside director” within the meaning of Section 162(m) of the Code, as a “non-employee director” within the meaning of Rule 16b-3 and as an “independent director” within the meaning of the listing requirements of the New York Stock Exchange or such other national securities market or exchange as may at the time be the principal market for the Common Stock.

     “Participant” means an Eligible Individual designated to be granted an Award under the Plan.

     “Payment Value” shall mean the dollar amount assigned to a Performance Share, which shall be equal to the Fair Market Value of the Common Stock on the day of the Committee’s determination under Section 8(c) with respect to the applicable Performance Cycle.

     “Performance Cycle” or “Cycle” shall mean the period of years selected by the Committee during which performance is measured for the purpose of determining the extent to which an award of Performance Shares has been earned.

     “Performance Goals” means the performance goals established by the Committee in connection with the grant of an Award. In the case of Qualified Performance-Based Awards, (i) such

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goals shall be based on the attainment of one or more of the following objective measures with respect to the Company or an Affiliate, or such subsidiary, division or department of the Company or an Affiliate for or within which the Participant performs services: revenue growth; earnings before interest, taxes, depreciation, and amortization; earnings before interest and taxes; operating income; pre- or after- tax income; earnings per share; cash flow; cash flow per share; return on equity; return on invested capital; return on assets; economic value added (or an equivalent metric); share price performance; total shareholder return; improvement in or attainment of expense levels; improvement in or attainment of working capital levels; (ii) such Performance Goals shall be set by the Committee in writing within the time period prescribed by Section 162(m) of the Code so that the outcome is substantially uncertain at the time the Performance Goals are established; and (iii) the Committee certifies that such Performance Goals were met. Such Performance Goals also may be based upon the attaining of specified levels of Company performance under one or more of the measures described above relative to the performance of other companies.

     “Qualified Performance-Based Award” means an Award of Restricted Stock, Restricted Stock Units or Performance Shares designated as such by the Committee at the time of grant, based upon a determination that (i) the recipient is or may be a Covered Employee in the year in which the Company would expect to be able to claim a tax deduction with respect to such Restricted Stock, Restricted Stock Units, Options or Performance Shares and (ii) the Committee wishes such Award to qualify for the Section 162(m) Exemption.

     “Restricted Period” shall mean the period of years selected by the Committee during which a grant of Restricted Stock or Restricted Stock Units may be forfeited to the Company.

     “Restricted Stock” shall mean shares of Common Stock contingently granted to a Participant under Section 9 of the Plan.

     “Restricted Stock Unit” shall mean any unit granted under Section 9 of the Plan evidencing the right to receive a Share (or the cash payment equal to the Fair Market Value of a Share) at some future date.

     “Rule 16b-3” shall mean Rule 16b-3, as promulgated by the Securities and Exchange Commission under Section 16(b) of the Exchange Act, as amended from time to time.

     “Section 162(m) Exemption” shall mean the exemption from the limitation on deductibility imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(C) of the Code.

     “Share” or “Shares” shall mean a share or shares of Common Stock.

     “Stock Appreciation Right” shall mean a right granted under Section 7 of the Plan.

     “Stock Exchange” shall mean the New York Stock Exchange or such other national securities market or exchange as may at the time be the principal market for the Shares.

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     “Stock Unit Award” shall mean an award of Common Stock or units granted under Section 10 of the Plan.

     “Stockholders Meeting” shall mean the annual meeting of stockholders of the Company in each year.

SECTION 3. ADMINISTRATION

     (a) POWER AND AUTHORITY OF THE COMMITTEE. The Plan shall be administered by the Committee. Subject to the terms of the Plan and to applicable law, the Committee shall have full power and authority to:

          (i) designate Participants;

          (ii) determine whether and to what extent any type (or types) of Award is to be granted hereunder;

          (iii) determine the number of Shares to be covered by (or the method by which payments or other rights are to be determined in connection with) each Award;

          (iv) determine the terms and conditions of any Award or Award Agreement;

          (v) subject to Section 13 hereof, amend the terms and conditions of any Award or Award Agreement and accelerate the vesting and/or exercisability of any Option or waive any restrictions relating to any Award; PROVIDED, HOWEVER, that (A) except for adjustments pursuant to Section 5(c) of the Plan, in no event may any Option granted under this Plan be (x) amended to decrease the Exercise Price thereof, (y) cancelled in conjunction with the grant of any new Option with a lower Exercise Price, or (z) otherwise subject to any action that would be treated, for accounting purposes, as a “repricing” of such Option, unless such amendment, cancellation, or action is approved by the stockholders of the Company to the extent required by applicable law and stock exchange rules and (B) the Committee may not adjust upward the amount payable to a Covered Employee with respect to a Qualified Performance-Based Award or waive or alter the Performance Goals associated herewith in a manner that would violate Section 162(m) of the Code;

          (vi) determine whether, to what extent and under what circumstances the exercise price of Awards may be paid in cash, Shares, other securities, other Awards or other property, or canceled, forfeited or suspended;

          (vii) determine whether, to what extent and under what circumstances cash, Shares, other securities, other Awards, other property and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder thereof or the Committee;

          (viii) interpret and administer the Plan and any instrument or agreement, including an Award Agreement, relating to the Plan;

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          (ix) adopt, alter, suspend, waive or repeal such rules, guidelines and practices and appoint such agents as it shall deem advisable or appropriate for the proper administration of the Plan; and

          (x) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award or Award Agreement shall be within the sole discretion of the Committee, may be made at any time, and shall be final, conclusive and binding upon all persons, including without limitation, the Company, its Affiliates, subsidiaries, shareholders, Eligible Individuals and any holder or beneficiary of any Award.

     (b) ACTION BY THE COMMITTEE; DELEGATION. Except to the extent prohibited by applicable law or the applicable rules of a Stock Exchange, the Committee may delegate all or any part of its duties and powers under the Plan to one or more persons, including Directors or a committee of Directors, subject to such terms, conditions and limitations as the Committee may establish in its sole discretion; PROVIDED, HOWEVER, that the Committee shall not delegate its powers and duties under the Plan (i) with regard to officers or Directors of the Company or any Affiliate who are subject to Section 16 of the Exchange Act or (ii) in a manner that would cause an Award designated as a Qualified Performance-Based Award not to qualify for, or to cease to qualify for, the Section 162(m) Exemption; and PROVIDED, FURTHER, that any such delegation may be revoked by the Committee at any time.

     (c) POWER AND AUTHORITY OF THE BOARD. Notwithstanding anything to the contrary contained herein, except to the extent that the grant or exercise of such authority would cause any Award or transaction to become subject to (or lose an exemption under) the short-swing profit recovery provisions of Section 16 of the Exchange Act or cause an Award designated as a Qualified Performance-Based Award not to qualify for, or to cease to qualify for, the Section 162(m) Exemption, the Board may, at any time and from time to time, without any further action of the Committee, exercise the powers and duties of the Committee under the Plan. To the extent that any permitted action taken by the Board conflicts with action taken by the Committee, the Board action shall control.

SECTION 4. ELIGIBILITY

     Any Eligible Individual shall be eligible to be designated a Participant. In determining which Eligible Individuals shall receive an Award and the terms of any Award, the Committee may take into account the nature of the services rendered by the respective Eligible Individuals, their present and potential contributions to the success of the Company, or such other factors as the Committee, in its discretion, shall deem relevant. Notwithstanding the foregoing, Incentive Stock Options may be granted only to full-time or part-time Employees (which term as used herein includes, without limitation, officers and Directors who also are Employees), and an Incentive Stock Option shall not be granted to an Employee of an Affiliate unless such Affiliate also is a “subsidiary corporation” of the Company within the meaning of Section 424(f) of the Code or any successor provision.

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SECTION 5. SHARES AVAILABLE FOR AWARDS

     (a) SHARES AVAILABLE. Subject to adjustment as provided in Section 5(c) of the Plan, the aggregate number of Shares that may be issued under the Plan shall be 850,000. Shares that may be issued under the Plan may be authorized but unissued Shares or Shares re-acquired and held in treasury. Notwithstanding the foregoing, the number of Shares available for granting Incentive Stock Options under the Plan shall not exceed 425,000, subject to adjustment as provided in Section 5(c) of the Plan and subject to the provisions of Section 422 or 424 of the Code or any successor provision.

     (b) ACCOUNTING FOR AWARDS. For purposes of this Section 5, if an Award entitles the holder thereof to receive or purchase Shares, the number of Shares covered by such Award or to which such Award relates shall be counted on the date of grant of such Award against the aggregate number of Shares available for granting Awards under the Plan. Any Shares that are used by a Participant as full or partial payment to the Company of the purchase price relating to an Award, including in connection with the satisfaction of tax obligations relating to an Award, shall again be available for granting Awards (other than Incentive Stock Options) under the Plan. In addition, if any Shares covered by an Award or to which an Award relates are not purchased or are forfeited, or if an Award otherwise terminates without delivery of any Shares, then the number of Shares counted against the aggregate number of Shares available under the Plan with respect to such Award, to the extent of any such forfeiture or termination, shall again be available for granting Awards under the Plan.

     (c) ADJUSTMENTS. In the event of any change in corporate capitalization (including, but not limited to, a change in the number of Shares outstanding), such as a stock split or a corporate transaction, such as any merger, consolidation, separation, including a spin-off, or other distribution of stock or property of the Company (including any extraordinary cash or stock dividend), any reorganization (whether or not such reorganization comes within the definition of such term in Section 368 of the Code) or any partial or complete liquidation of the Company, the Committee or Board may make such substitution or adjustments in the aggregate number and kind of shares reserved for issuance under the Plan, and the maximum limitation upon Stock Options and Stock Appreciation Rights and other Awards to be granted to any Participant, in the number, kind and Exercise Price of shares subject to outstanding Stock Options and Stock Appreciation Rights, in the number and kind of shares subject to other outstanding Awards granted under the Plan and/or such other equitable substitution or adjustments as it may determine to be appropriate in its sole discretion (including, without limitation, the provision of an amount in cash in consideration for any such Awards); PROVIDED, HOWEVER, that the number of shares subject to any Award shall always be a whole number. Without limiting the generality of the foregoing, in connection with any Disaffiliation of a subsidiary of the Company, the Committee shall have the authority to arrange for the assumption or replacement of Awards with new awards based on shares of the affected subsidiary or by an affiliate of an entity that controls the subsidiary following the Disaffiliation. For purposes hereof, “Disaffiliation” of a subsidiary shall mean the subsidiary’s ceasing to be a subsidiary of the Company for any reason (including, without limitation, as a result of a public offering, spinoff, sale or other distribution or transfer by the Company of the stock of the subsidiary).

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     (d) AWARD LIMITATIONS. No more than 100,000 shares of Common Stock may be subject to Qualified Performance-Based Awards granted to any Eligible Individual, including a Covered Employee, in any Fiscal Year.

SECTION 6. STOCK OPTIONS

     (a) GRANT. Subject to the provisions of the Plan, the Committee shall have sole and complete authority to determine the Eligible Individuals to whom Options shall be granted (which may be Nonqualified Stock Options or Incentive Stock Options), the number of shares to be covered by each Option, the exercise price for each Option, and the conditions and limitations applicable to the exercise of each Option. In the case of Incentive Stock Options, the terms and conditions of such grants shall be subject to and comply with such rules as may be prescribed by Section 422 of the Code.

     (b) EXERCISE PRICE. The Exercise Price per Share purchasable under a Option shall be determined by the Committee; PROVIDED, HOWEVER, that, unless otherwise determined by the Committee, such Exercise Price shall not be less than 100% of the Fair Market Value of a Share on the date of grant of such Option.

     (c) TIME AND METHOD OF EXERCISE. The Committee shall determine the time or times at which an Option may be exercised in whole or in part and the method or methods by which, and the form or forms (including, without limitation, cash, Shares, other securities, other Awards or other property, or any combination thereof, having a Fair Market Value on the exercise date equal to the applicable Exercise Price) in which, payment of the Exercise Price with respect thereto may be made or deemed to have been made.

     (d) OPTION TERM. The term of each Stock Option shall be fixed by the Committee at the time of grant, but in no event shall be more than 10 years from the date of grant.

     (e) INCENTIVE STOCK OPTIONS. The Committee may designate Options as Nonqualified Stock Options or as Incentive Stock Options. Any Incentive Stock Option authorized under the Plan shall contain such provisions as the Committee shall deem advisable, but shall in all events be consistent with and contain all provisions required in order to qualify the Stock Option as an Incentive Stock Option. To the extent that any Stock Option is not designated as an Incentive Stock Option or even if so designated does not qualify as an Incentive Stock Option on or subsequent to its grant date, it shall constitute a Nonqualified Stock Option.

SECTION 7. STOCK APPRECIATION RIGHTS

     The Committee is hereby authorized to grant Stock Appreciation Rights to Eligible Individuals subject to the terms of the Plan. Each Stock Appreciation Right granted under the Plan shall confer on the holder upon exercise the right to receive, as determined by the Committee, cash or a number of Shares or a combination of cash and Shares equal to the excess of (A) the Fair Market Value of one Share on the date of exercise (or, if the Committee shall so determine, at any time

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during a specified period before or after the date of exercise) over (B) the grant price of the Stock Appreciation Right as determined by the Committee, which grant price shall not be less than 100% of the Fair Market Value of one Share on the date of grant of the Stock Appreciation Right, unless otherwise determined by the Committee. Subject to the terms of the Plan, the grant price, term, methods of exercise, dates of exercise, methods of settlement, the effect of termination of employment (by reason of death, disability, retirement or otherwise) on the exercisability and any other terms and conditions (including conditions or restrictions on the exercise thereof) of any Stock Appreciation Right shall be as determined by the Committee, PROVIDED, that in no event shall the term of a Stock Appreciation Right be longer than ten years.

SECTION 8. PERFORMANCE SHARES

     (a) The Committee shall have sole and complete authority to determine the Eligible Individuals who shall receive Performance Shares, the number of such shares for each Performance Cycle, the Performance Goals on which each Award shall be contingent, the duration of each Performance Cycle, and the value of each Performance Share. There may be more than one Performance Cycle in existence at any one time, and the duration of Performance Cycle may differ from each other. The Committee may, prior to or at the time of the grant, designate Performance Awards as Qualified Performance-Based Awards, in which event it shall condition the settlement thereof upon the Committee’s certification of the attainment of the Performance Goals.

     (b) The Committee shall establish Performance Goals for each Cycle on the basis of such criteria and to accomplish such objectives as the Committee may from time to time select.

     (c) As soon as practicable after the end of a Performance Cycle, the Committee shall determine the number of Performance Shares which have been earned on the basis of performance in relation to the established Performance Goals.

     (d) Payment Values of earned Performance Shares shall be distributed to the Participant or, if the Participant has died, to the Participant’s Designated Beneficiary, as soon as practicable after the expiration of the Performance Cycle and the Committee’s determination under paragraph (c), above. The Committee shall determine whether Payment Values are to be distributed in the form of cash or shares of Common Stock.

SECTION 9. RESTRICTED STOCK AND RESTRICTED STOCK UNITS

     The Committee is hereby authorized to grant Restricted Stock and Restricted Stock Units to Eligible Individuals with the following terms and conditions and with such additional terms and conditions not inconsistent with the provisions of the Plan as the Committee shall determine:

          (i) RESTRICTIONS. Shares of Restricted Stock and Restricted Stock Units shall be subject to such restrictions as the Committee may impose (including, without limitation, limitation on transfer, forfeiture conditions, limitation on the right to vote a Share of Restricted Stock or the right to receive any dividend or other right or property with respect thereto), which restrictions may

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lapse separately or in combination at such time or times, in such installments or otherwise as the Committee may deem appropriate. The grant or vesting of Restricted Stock and Restricted Stock Units may be performance-based or time-based or both. Restricted Stock and Restricted Stock Units may be Qualified Performance-Based Awards, in which event the grant or vesting, as applicable, of such Restricted Stock or Restricted Stock Units shall be conditioned upon the attainment of Performance Goals.

          (ii) STOCK CERTIFICATES; DELIVERY OF SHARES.

               (A) Any Restricted Stock granted under the Plan shall be evidenced in such manner as the Committee may deem appropriate, including book-entry registration or issuance of one or more stock certificates. Any certificate issued in respect of shares of Restricted Stock shall be registered in the name of such Participant and shall bear an appropriate legend referring to the applicable Award Agreement and possible forfeiture of such shares of Restricted Stock. The Committee may require that the certificates evidencing such shares be held in custody by the Company until the restrictions thereon shall have lapsed and that, as a condition of any Award of Restricted Stock, the Participant shall have delivered a stock power, endorsed in blank, relating to the Shares covered by such Award.

               (B) In the case of Restricted Stock Units, no Shares or other property shall be issued at the time such Awards are granted. Upon the lapse or waiver of restrictions and the restricted period relating to Restricted Stock Units (or at such later time as may be determined by the Committee), Shares or other cash or property shall be issued to the holder of the Restricted Stock Units and evidenced in such manner as the Committee may deem appropriate, including book-entry registration or issuance of one or more stock certificates.

          (iii) FORFEITURE. Except as otherwise determined by the Committee, upon a Participant’s termination of employment (as determined under criteria established by the Committee) during the applicable restriction period, all applicable Shares of Restricted Stock and Restricted Stock Units at such time subject to restriction shall be forfeited and reacquired by the Company.

SECTION 10. OTHER STOCK-BASED AWARDS

     (a) In addition to granting Options, Stock Appreciation Rights, Performance Shares, Restricted Stock and Restricted Stock Units, the Committee shall have authority to grant to Participants Stock Unit Awards that can be in the form of Common Stock or units, the value of which is based, in whole or in part, on the value of Common Stock. Subject to the provisions of the Plan, including Section 10(b) below, Stock Unit Awards shall be subject to such terms, restrictions, conditions, vesting requirements and payment rules (all of which are sometimes hereinafter collectively referred to as “rules”) as the Committee may determine in its sole and complete discretion at the time of grant. The rules need not be identical for each Stock Unit Award.

     (b) In the sole and complete discretion of the Committee, a Stock Unit Award may be granted subject to the following rules:

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          (1) Any shares of Common Stock which are part of a Stock Unit Award may not be assigned, sold, transferred, pledged or otherwise encumbered prior to the date on which the Shares are issued or, if later, the date provided by the Committee at the time of grant of the Stock Unit Award.

          (2) Stock Unit Awards may provide for the payment of cash consideration by the person to whom such Award is granted or provide that the Award, and any Common Stock to be issued in connection therewith, if applicable, shall be delivered without the payment of cash consideration, provided that for any Common Stock to be purchased in connection with a Stock Unit Award the purchase price shall be at least 50% of the Fair Market Value of such Common Stock on the date such Award is granted.

          (3) Stock Unit Awards may relate in whole or in part to certain performance criteria established by the Committee at the time of grant.

          (4) Stock Unit Awards may provide for deferred payment schedules and/or vesting over a specified period of employment.

          (5) In such circumstances as the Committee may deem advisable, the Committee may waive or otherwise remove, in whole or in part, any restriction or limitation to which a Stock Unit Award was made subject at the time of grant.

     (c) In the sole and complete discretion of the Committee, an Award, whether made as a Stock Unit Award under this Section 10 or as an Award granted pursuant to Sections 6 through 9, may provide the Participant with (i) dividends or dividend equivalents (payable on a current or deferred basis) and (ii) cash payments in lieu of or in addition to an Award.

SECTION 11. OUTSIDE DIRECTORS’ RESTRICTED STOCK UNITS

     (a) GRANT OF RESTRICTED STOCK UNITS. Each Outside Director who is a member of the Board of Directors as of the conclusion of a Stockholders Meeting, beginning with the 2004 Stockholders Meeting, shall automatically be granted Restricted Stock Units for shares of Common Stock on the date of such Stockholders Meeting, with the number of shares to be determined by dividing $40,000 by the Fair Market Value of the Stock on that date.

     (b) TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS. Restricted Stock Units granted pursuant to this Section 11 shall vest in equal 25% increments on each of the first four (4) anniversaries of the date of grant. Grantees will only be entitled to receive Shares of Common Stock relating to vested Restricted Stock Units and then only upon leaving the Board of Directors; provided, however, that upon a Change in Control, all unvested Restricted Stock Units shall automatically vest and Grantees shall be entitled to receive all such vested Restricted Stock Units as of such Change in Control. The Restricted Stock Units granted pursuant to this Section 11 shall be subject to such other terms and conditions as the Committee may specify.

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     SECTION 12. OUTSIDE DIRECTORS’ SHARES

     (a) ELECTION. Outside Directors may elect, on an annual basis, to purchase Shares of Common Stock of the Company from the Company in lieu of receiving all or part (in 10% increments) of their annual retainer, meeting fees and committee meeting fees in cash. The purchase price of such shares shall be the Fair Market Value of the stock for the last trading day of the month in which the retainer, meeting fees, and committee meeting fees are earned.

     (b) PROCESS.

          (i) The annual retainer, meeting fees and committee meeting fees payable to each Outside Director for service on the Board of Directors may, at the election of the Outside Director (the “Annual Election’’), be payable to a trust in shares of common stock of the Company. The Annual Election: (i) shall be irrevocable in respect of the one-year period to which it pertains (the “Plan Year”) and shall specify the applicable percentage (in increments of 10%) of such annual retainer and meeting fees that such Outside Director wishes to direct to the trust; (ii) must be received in writing by the administrator of the Plan by the established enrollment deadline of any year in which this Plan is in effect in order to cause the next succeeding Plan Year’s annual retainer and fees to be subject to the provisions of this Plan; and (iii) must specify whether the ultimate distribution of the shares of common stock to the Outside Directors will be paid, following the Outside Director’s death or termination of Board service, in a lump sum or in equal annual payments over a period of two to twenty years.

          (ii) The Shares shall be purchased from the Company at the Fair Market Value of the Common Stock for the last trading day of the month in which the fees are earned and shall be credited by the trustee to the account of the Outside Director. The certificates for Common Stock shall be issued in the name of the trustee of the trust and shall be held by such trustee in trust for the benefit of the Outside Directors; provided, however, that each Outside Director shall be entitled to vote the shares. The trustee shall retain all dividends (which shall be reinvested in shares of Common Stock) and other distributions paid or made with respect thereto in the trust. The shares credited to the account of an Outside Director shall remain subject to the claims of the Company’s creditors, and the interests of the Outside Director in the trust may not be sold, hypothecated or transferred (including, without limitation, transferred by gift or donation) while such shares are held in the trust.

          (iii) If the Outside Director elects to receive a lump sum distribution, the trustee of the trust shall distribute such shares of common stock free of restrictions within 60 days after the Outside Director’s termination date or a later date elected by the Outside Director (no later than the mandatory retirement age of the Outside Director). If the Outside Director elects to receive a lump sum distribution, the Outside Director may, by delivering notice in writing to the administrator of the Plan no later than December 31 of the year prior to the year in which the Outside Director terminates service as a Director, elect to receive any portion or all of the common stock in the form of cash determined by reference to the Fair Market Value of the common stock as of the termination date. Any such notice to the administrator must specify whether the distribution will be entirely in cash or whether the distribution will be in a combination of common stock and cash (in which case the

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applicable percentage must be specified). In the case of termination of the Outside Director’s service as a result of his death, payment of the Outside Director’s account shall be in shares of common stock and not in cash. If an Outside Director elects to receive payments in installments, the distribution will commence within 60 days after the Outside Director’s termination date and will be made in shares of common stock and not in cash. Notwithstanding anything to the contrary contained herein, any fractional shares of common stock shall be distributed in cash to the Outside Director.

SECTION 13. AMENDMENT AND TERMINATION

     (a) AMENDMENTS TO THE PLAN. The Board may amend, alter, suspend, discontinue or terminate the Plan at any time; PROVIDED, HOWEVER, that, notwithstanding any other provision of the Plan or any Award Agreement, without the approval of the stockholders of the Company, no amendment, alteration, suspension, discontinuation or termination shall be made that, absent such approval:

          (i) requires stockholder approval under the rules or regulations of the New York Stock Exchange, any other securities exchange or the National Association of Securities Dealers, Inc. that are applicable to the Company;

          (ii) increases the number of Shares authorized under the Plan as specified in Section 5(c) of the Plan; or

          (iii) without such stockholder approval, would cause the Company to be unable, under the Code, to grant Incentive Stock Options under the Plan.

     (b) AMENDMENTS TO AWARDS. The Committee may waive any conditions of or rights of the Company under any outstanding Award, prospectively or retroactively. Except as otherwise provided herein or in an Award Agreement, the Committee may not amend, alter, suspend, discontinue or terminate any outstanding Award, prospectively or retroactively, if such action would adversely affect the rights of the holder of such Award, without the consent of the Participant or holder or beneficiary thereof or such amendment would cause a Qualified Performance-Based Award to cease to qualify for the Section 162(m) Exemption.

     (c) CORRECTION OF DEFECTS, OMISSIONS AND INCONSISTENCIES. The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem desirable to carry the Plan into effect.

SECTION 14. GENERAL PROVISIONS

     (a) WITHHOLDING. No later than the date as of which an amount first becomes includible in the gross income of a Participant for federal income tax purposes (or the income tax laws of any other foreign jurisdiction) with respect to any Award under the Plan, the Participant shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount.

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The obligations of the Company under the Plan shall be conditional on such payment or arrangements, and the Company and its Affiliates shall, to the extent permitted by law, be entitled to take such action and establish such procedures as it deems appropriate to withhold or collect all applicable payroll, withholding, income or other taxes from such Participant. In order to assist a Participant in paying all or a portion of the federal, state, local and foreign taxes to be withheld or collected upon exercise or receipt of (or the lapse of restrictions relating to) an Award, the Committee, in its discretion and subject to such additional terms and conditions as it may adopt, may permit the Participant to satisfy such tax obligation by (i) electing to have the Company withhold a portion of the Shares or other property otherwise to be delivered upon exercise or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value equal to the amount of such taxes or (ii) delivering to the Company Shares or other property other than Shares issuable upon exercise or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value equal to the amount of such taxes, PROVIDED that, in either case, not more than the legally required minimum withholding may be settled with Shares. Any such election must be made on or before the date that the amount of tax to be withheld is determined.

     (b) AWARDS. Each Award hereunder shall be evidenced by an Award Agreement, delivered to the Participant or Outside Director and shall specify the terms and conditions thereof and any rules applicable thereto, including but not limited to the effect on such Award of the death, retirement or other termination of employment of the Participant or Outside Director and the effect thereon, if any, of a Change in Control of the Company.

     (c) NO RIGHTS TO AWARDS. No Eligible Individual or other person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Eligible Individuals or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to any Participant or with respect to different Participants.

     (d) NO RIGHT TO EMPLOYMENT. No person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Employer. Further, the Employer expressly reserves the right at any time to dismiss a Participant free from any liability, or any claim under the Plan, except as provided herein or in any agreement entered into with respect to an Award.

     (e) NO RIGHTS AS STOCKHOLDER. Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be distributed under the Plan until he or she has become the holder thereof. Notwithstanding the foregoing, in connection with each grant of Restricted Stock or Stock Unit Award hereunder, the applicable Award shall specify if and to what extent the Participant shall not be entitled to the rights of a stockholder in respect of such Restricted Stock or Stock Unit Award.

     (f) CONSTRUCTION OF THE PLAN. The validity, construction, interpretation, administration and effect of the Plan and of its rules and regulations, and rights relating to the Plan, shall be determined solely in accordance with the laws of the State of Texas.

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     (g) CHANGE IN CONTROL. In order to preserve a Participant’s rights under an Award in the event of a transaction or occurrence that the Committee reasonably determines to constitute a change in control of the Company (a “Change-in-Control”), the Committee in its discretion may, at the time an Award is made or any time thereafter, take one or more of the following actions: (i) provide for the acceleration of any time period relating to the exercise of the Award, (ii) provide for the purchase of the Award upon the Participant’s request for an amount of cash or other property that could have been received upon the exercise or realization of the Award had the Award been currently exercisable or payable, (iii) adjust the terms of the Award in a manner determined by the Committee to reflect the Change in Control, (iv) cause the Award to be assumed, or new rights substituted therefore, by another entity, or (v) make such other provision as the Committee may consider equitable and in the best interests of the Company.

     (h) FORMS OF PAYMENT UNDER AWARDS. Subject to the terms of the Plan, payments or transfers to be made by the Company or an Affiliate upon the grant, exercise or settlement of an Award may be made in such form or forms as the Committee shall determine (including, without limitation, cash, Shares, promissory notes (PROVIDED, HOWEVER, that the acceptance of such notes does not conflict with Section 402 of the Sarbanes-Oxley Act of 2002), other securities, other Awards or other property or any combination thereof), and may be made in a single payment or transfer, in installments or on a deferred basis, in each case in accordance with rules and procedures established by the Committee. Such rules and procedures may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of dividend equivalents with respect to installment or deferred payments.

     (i) SECTION 16 COMPLIANCE; SECTION 162(m) ADMINISTRATION. The Plan is intended to comply in all respects with Rule 16b-3 or any successor provision, as in effect from time to time, and in all events the Plan shall be construed in accordance with the requirements of Rule 16b-3. If any Plan provision does not comply with Rule 16b-3 as hereafter amended or interpreted, the provision shall be deemed inoperative. The Board, in its absolute discretion, may bifurcate the Plan so as to restrict, limit or condition the use of any provision of the Plan with respect to persons who are officers or Directors subject to Section 16 of the Exchange Act without so restricting, limiting or conditioning the Plan with respect to other Eligible Individuals. The Company intends that all Stock Options and Stock Appreciation Rights granted under the Plan to individuals who are or who the Committee believes will be Covered Employees will constitute “qualified performance-based compensation” within the meaning of Section 162(m) of the Code.

     (j) RESTRICTIONS. Shares shall not be issued pursuant to the exercise or payment of the Exercise Price or purchase price relating to an Award unless such exercise or payment and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Act, the Exchange Act, the rules and regulations promulgated thereunder, the requirements of any applicable stock exchange and the Texas Business Corporations Act, as amended from time to time. As a condition to the exercise or payment of the Exercise Price or purchase price relating to such Award, the Company may require that the person exercising or paying the Exercise Price or purchase price represent and warrant that the Shares are being purchased

15

only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation and warranty is required by law. All Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable, and the Committee may direct appropriate stop transfer orders and cause other legends to be placed on the certificates for such Shares or other securities to reflect such restrictions.

     (k) LIMITS ON TRANSFER OF AWARDS. No Award and no right under any such Award shall be transferable by a Participant otherwise than by will or by the laws of descent and distribution and the Company shall not be required to recognize any attempted assignment of such rights by any Participant; PROVIDED, HOWEVER, that, if so determined by the Committee, a Participant may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of the Participant and receive any property distributable with respect to any Award upon the death of the Participant; and PROVIDED, FURTHER, that, if so determined by the Committee, a Participant may transfer a Nonqualified Stock Option to any Family Member (as such term is defined in the General Instructions to Form S-8 (or successor to such Instructions or such Form)) at any time that such Participant holds such Stock Option, whether directly or indirectly or by means of a trust or partnership or otherwise, PROVIDED that the Participant may not receive any consideration for such transfer, the Family Member may not make any subsequent transfers other than by will or by the laws of descent and distribution and the Company receives written notice of such transfer. Except as otherwise determined by the Committee, each Award (other than an Incentive Stock Option) or right under any such Award shall be exercisable during the Participant’s lifetime only by the Participant or, if permissible under applicable law, by the Participant’s guardian or legal representative. Except as otherwise determined by the Committee, no Award (other than an Incentive Stock Option) or right under any such Award may be pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation, attachment or other encumbrance thereof shall be void and unenforceable against the Company or any Affiliate. Notwithstanding the above, in the discretion of the Committee, awards may be transferable pursuant to a Qualified Domestic Relations Order (“QDRO”), as determined by the Committee or its designee.

     (l) SEVERABILITY. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction or Award, and the remainder of the Plan or any such Award shall remain in full force and effect.

SECTION 15. EFFECTIVE DATE OF PLAN

     Upon its adoption by the Board, the Plan shall be submitted for approval by the stockholders of the Company and shall be effective as of the date of such approval (the “EFFECTIVE DATE”).

16

SECTION 16. TERM OF THE PLAN

     The Plan will terminate on the tenth anniversary of the Effective Date or any earlier date of discontinuation or termination established pursuant to Section 3 of the Plan. However, unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award theretofore granted may extend beyond such date, and the authority of the Committee provided for hereunder with respect to the Plan and any Awards, and the authority of the Board to amend the Plan, shall extend beyond the termination of the Plan.

[As approved by the Shareholders of Cash America International, Inc.]
[April 21, 2004]

17

EX-10.22

                                                                   EXHIBIT 10.22

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

                   FIRST AMENDED AND RESTATED CREDIT AGREEMENT

                                      AMONG

                        CASH AMERICA INTERNATIONAL, INC.,
                                AS THE BORROWER,

                     WELLS FARGO BANK, NATIONAL ASSOCIATION,
                     AS ADMINISTRATIVE AGENT, AN L/C ISSUER
                                       AND
                               SWING LINE LENDER,

                            JPMORGAN CHASE BANK, N.A.
                              AS SYNDICATION AGENT

                                       AND

                        U. S. BANK NATIONAL ASSOCIATION,
        KEYBANK NATIONAL ASSOCIATION AND UNION BANK OF CALIFORNIA, N.A.,
                           AS CO-DOCUMENTATION AGENTS

                                       AND

                         THE OTHER LENDERS PARTY HERETO

                          Dated as of February 24, 2005

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

                     WELLS FARGO BANK, NATIONAL ASSOCIATION,
                    as Co-Lead Arranger and Joint Book Runner

                          J. P. MORGAN SECURITIES INC.,
                    as Co-Lead Arranger and Joint Book Runner



                                TABLE OF CONTENTS



Section                                                                                                           Page
- -------                                                                                                           ----
                                                                                                               
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS

   1.01           Defined Terms..................................................................................   1
   1.02           Other Interpretive Provisions..................................................................  24
   1.03           Accounting Terms...............................................................................  24
   1.04           Rounding.......................................................................................  24
   1.05           References to Agreements and Laws..............................................................  24

ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS

   2.01           Revolving Loans................................................................................  25
   2.02           Borrowings, Conversions and Continuations of Loans.............................................  25
   2.03           Letters of Credit..............................................................................  26
   2.04           Swing Line Loans...............................................................................  34
   2.05           Prepayments....................................................................................  36
   2.06           Reduction or Termination of Revolving Commitments..............................................  37
   2.07           Repayment of Loans.............................................................................  38
   2.08           Interest.......................................................................................  38
   2.09           Fees...........................................................................................  38
   2.10           Computation of Interest and Fees...............................................................  39
   2.11           Evidence of Debt...............................................................................  39
   2.12           Payments Generally.............................................................................  40
   2.13           Sharing of Payments............................................................................  41

ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY

   3.01           Taxes..........................................................................................  42
   3.02           Illegality.....................................................................................  44
   3.03           Inability to Determine Rates...................................................................  44
   3.04           Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans.........  44
   3.05           Funding Losses.................................................................................  45
   3.06           Matters Applicable to all Requests for Compensation............................................  46
   3.07           Survival.......................................................................................  46

ARTICLE IV. CONDITIONS PRECEDENT TO Credit Extensions

   4.01           Conditions of Initial Credit Extension.........................................................  46
   4.02           Conditions to all Credit Extensions and Conversions and Continuations..........................  48

ARTICLE V. REPRESENTATIONS AND WARRANTIES

   5.01           Existence, Qualification and Power; Compliance with Laws.......................................  48
   5.02           Authorization; No Contravention................................................................  49
   5.03           Governmental Authorization.....................................................................  49
   5.04           Binding Effect.................................................................................  49
   5.05           Financial Statements; No Material Adverse Effect...............................................  49


                                       i



                                                                                                                
   5.06           Litigation.....................................................................................  49
   5.07           No Default.....................................................................................  50
   5.08           Ownership of Property; Liens...................................................................  50
   5.09           Environmental Compliance.......................................................................  50
   5.10           Insurance......................................................................................  50
   5.11           Taxes..........................................................................................  50
   5.12           ERISA Compliance...............................................................................  50
   5.13           Subsidiaries...................................................................................  51
   5.14           Margin Regulations; Investment Company Act; Public Utility Holding Company Act.................  51
   5.15           No Financing of Corporate Takeovers............................................................  51
   5.16           Insider........................................................................................  51
   5.17           Disclosure.....................................................................................  52
   5.18           Intellectual Property; Licenses, Etc...........................................................  52
   5.19           Businesses.....................................................................................  52
   5.20           Common Enterprise..............................................................................  52
   5.21           Solvent........................................................................................  52

ARTICLE VI. AFFIRMATIVE COVENANTS

   6.01           Financial Statements...........................................................................  53
   6.02           Certificates; Other Information................................................................  53
   6.03           Notices........................................................................................  55
   6.04           Payment of Obligations.........................................................................  55
   6.05           Preservation of Existence, Etc.................................................................  55
   6.06           Maintenance of Properties......................................................................  56
   6.07           Maintenance of Insurance.......................................................................  56
   6.08           Compliance with Laws...........................................................................  56
   6.09           Books and Records..............................................................................  56
   6.10           Inspection Rights..............................................................................  56
   6.11           Compliance with ERISA..........................................................................  57
   6.12           Use of Proceeds................................................................................  57
   6.13           Further Assurances.............................................................................  57
   6.14           Notice of Formation of Subsidiary..............................................................  57
   6.15           New Domestic Subsidiaries......................................................................  57
   6.16           Opinions Regarding Obligations of Guarantors...................................................  57
   6.17           Interest Rate Protection.......................................................................  58

ARTICLE VII. NEGATIVE COVENANTS

   7.01           Liens..........................................................................................  58
   7.02           Indebtedness...................................................................................  58
   7.03           Investments....................................................................................  60
   7.04           Fundamental Changes............................................................................  61
   7.05           Dispositions...................................................................................  61
   7.06           Restricted Payments............................................................................  62
   7.07           ERISA..........................................................................................  62
   7.08           Change in Nature of Business...................................................................  62
   7.09           Transactions with Affiliates...................................................................  63



                                       ii



                                                                                                                
   7.10           Burdensome Agreements..........................................................................  63
   7.11           Use of Proceeds................................................................................  63
   7.12           Amendment of Organization Documents and Fiscal Year............................................  63
   7.13           Amendment of Subordinated Debt.................................................................  63
   7.14           Sale and Leaseback.............................................................................  63
   7.15           Alteration of Material Agreements..............................................................  64
   7.16           Strict Compliance..............................................................................  64
   7.17           Guaranties.....................................................................................  64
   7.18           Financial Covenants............................................................................  64

ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES

   8.01           Events of Default..............................................................................  64
   8.02           Remedies Upon Event of Default.................................................................  66
   8.03           Application of Proceeds........................................................................  67

ARTICLE IX. ADMINISTRATIVE AGENT

   9.01           Appointment and Authorization of Administrative Agent..........................................  68
   9.02           Delegation of Duties...........................................................................  68
   9.03           Liability of Administrative Agent..............................................................  69
   9.04           Reliance by Administrative Agent...............................................................  69
   9.05           Notice of Default..............................................................................  70
   9.06           Credit Decision; Disclosure of Information by Administrative Agent.............................  70
   9.07           INDEMNIFICATION OF ADMINISTRATIVE AGENT........................................................  70
   9.08           Administrative Agent in its Individual Capacity................................................  71
   9.09           Successor Administrative Agent.................................................................  71
   9.10           Guaranty Matters...............................................................................  72
   9.11           Administrative Agent May File Proofs of Claim..................................................  72
   9.12           Related Obligations............................................................................  73
   9.13           Other Agents; Arrangers and Managers...........................................................  74

ARTICLE X. MISCELLANEOUS

   10.01          Amendments, Etc................................................................................  74
   10.02          Notices and Other Communications; Facsimile Copies.............................................  75
   10.03          No Waiver; Cumulative Remedies.................................................................  77
   10.04          Attorney Costs, Expenses and Taxes.............................................................  77
   10.05          INDEMNIFICATION BY THE BORROWER................................................................  77
   10.06          Payments Set Aside.............................................................................  79
   10.07          Successors and Assigns.........................................................................  79
   10.08          Confidentiality................................................................................  82
   10.09          Set-off........................................................................................  83
   10.10          Interest Rate Limitation.......................................................................  83
   10.11          Counterparts...................................................................................  83
   10.12          Integration....................................................................................  84
   10.13          Survival of Representations and Warranties.....................................................  84
   10.14          Severability...................................................................................  84
   10.15          Foreign Lenders................................................................................  84
   10.16          Removal and Replacement of Lenders.............................................................  85



                                       iii



                                                                                                                
   10.17          Exceptions to Covenants........................................................................  86
   10.18          Governing Law..................................................................................  86
   10.19          Waiver of Right to Trial by Jury...............................................................  86
   10.20          USA Patriot Act Notice.........................................................................  87
   10.21          Amendment, Restatement, Extension, Renewal and Increase........................................  87
   10.22          Entire Agreement...............................................................................  87

SIGNATURES.......................................................................................................  S-1



                                       iv



SCHEDULES

         
1.01        Subsidiary Groups (for Definitions)
2.01        Revolving Commitments and Pro Rata Shares
2.03        Existing Letters of Credit
5.13        Subsidiaries and Other Equity Investments
7.03(j)     Existing Investments
10.02       Eurodollar and Domestic Lending Offices, Addresses for Notices



EXHIBITS



               FORM OF
      
A        Assignment and Acceptance
B        Compliance Certificate
C        Guaranty
D        Revolving Loan Note
E        Revolving Loan Notice
F        Swing Line Note
G        Swing Line Loan Notice
H        Officer's Certificate


                                       v



                   FIRST AMENDED AND RESTATED CREDIT AGREEMENT

      This FIRST AMENDED AND RESTATED CREDIT AGREEMENT ("Agreement") is entered
into as of February 24, 2005, among CASH AMERICA INTERNATIONAL, INC., a Texas
corporation (the "Borrower"), each lender from time to time party hereto
(collectively, the "Lenders" and individually, a "Lender"), WELLS FARGO BANK,
NATIONAL ASSOCIATION, as Administrative Agent, an L/C Issuer and Swing Line
Lender, JPMORGAN CHASE BANK, N.A., as Syndication Agent, and U. S. BANK NATIONAL
ASSOCIATION, KEYBANK NATIONAL ASSOCIATION and UNION BANK OF CALIFORNIA, N.A., as
Co-Documentation Agents.

      The Borrower, various financial institutions and Wells Fargo Bank,
National Association, as the administrative agent, are parties to that certain
Credit Agreement, dated as of August 14, 2002, as heretofore amended, modified,
and supplemented from time to time (the "Existing Credit Agreement").

      The parties hereto have agreed, subject to the terms hereof, to amend and
restate the Existing Credit Agreement so as to, among other things, (a) increase
the amount of the revolving credit facility to $250,000,000, (b) amend the
pricing, certain covenants and various other provisions of the Existing Credit
Agreement and (c) revise the composition of the lender group.

      In consideration of the mutual covenants and agreements herein contained,
the Existing Credit Agreement is amended and restated in its entirety and the
parties hereto covenant and agree as follows:

                                   ARTICLE I.
                        DEFINITIONS AND ACCOUNTING TERMS

      1.01 DEFINED TERMS. As used in this Agreement, the following terms shall
have the meanings set forth below:

      "Accounting Firm" has the meaning specified in Section 6.01(b) hereof.

      "Acquisition" means the acquisition by any Person of (a) a majority of the
Capital Stock of another Person, (b) all or substantially all of the assets of
another Person or (c) all or substantially all of a line of business of another
Person, in each case whether or not involving a merger or consolidation with
such other Person.

      "Acquisition Consideration" means the consideration given by the Borrower
or any of its Subsidiaries for an Acquisition, including but not limited to the
sum of (without duplication) (a) the fair market value of any cash, property
(including Redeemable Stock) or services given, plus (b) consideration paid with
proceeds of Indebtedness permitted pursuant to this Agreement, plus (c) the
amount of any Indebtedness assumed, incurred or guaranteed (to the extent not
otherwise included) in connection with such Acquisition by the Borrower or any
of its Subsidiaries.

      "Act" has the meaning set forth in Section 10.20 hereof.

                                        1



      "Additional Senior Debt" means any Indebtedness of the Borrower (other
than Subordinated Debt) incurred after the Closing Date, the terms of which
shall be reasonably satisfactory to the Required Lenders.

      "Adjusted EBITDA" means, with respect to any period, EBITDA for such
period adjusted to (a) exclude any non-cash gain or loss recognized on the
income statement from derivative and currency value fluctuations during such
period, and (b) upon the acquisition of any assets or Persons permitted by
Section 7.03 hereof which generate EBITDA (whether positive or negative) or the
disposition of any assets or Persons permitted by Section 7.05 hereof which
prior to such disposition generated EBITDA (whether positive or negative),
include the actual trailing 12 month EBITDA of the acquired assets or Person, or
exclude the actual trailing 12 month EBITDA of the disposed assets or Person, as
the case may be, with adjustments as provided in Article 11, Regulation S-X of
the Securities Act of 1933 during such period.

      "Adjusted Funded Debt" means, as of any date of determination, the sum of
(a) Funded Debt as of such date, minus (b) Cash on Hand as of such date.

      "Adjustment Date" means, for purposes of the Applicable Rate, the date of
receipt by the Administrative Agent of the financial statements required to be
delivered pursuant to Section 6.01 hereof, and the Compliance Certificate
required pursuant to Section 6.02(a) hereof.

      "Administrative Agent" means Wells Fargo in its capacity as administrative
agent under any of the Loan Documents, or any successor administrative agent.

      "Administrative Agent's Office" means the Administrative Agent's address
and, as appropriate, account as set forth on Schedule 10.02, or such other
address or account as the Administrative Agent may from time to time notify the
Borrower and the Lenders.

      "Affiliate" means, as to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power (a)
to vote 10% or more of the Voting Shares (on a fully diluted basis) of such
Person; or (b) to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.

      "Affiliated IRP Agreement" means an Interest Rate Protection Agreement
entered into between the Borrower and a Lender or an Affiliate of a Lender,
provided that such Lender was a Lender hereunder at the time such Interest Rate
Protection Agreement was entered into.

      "Agent Fee Letters" has the meaning specified in Section 2.09(b) hereof.

      "Agent-Related Persons" means the Administrative Agent (including any
successor administrative agent), together with its Affiliates, and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.

      "Aggregate Revolving Commitments" means the aggregate amount of Revolving
Commitments of the Lenders, which initially shall be $250,000,000, as the same
may be reduced from time to time pursuant to the terms of this Agreement.

                                       2



      "Agreement" means this First Amended and Restated Credit Agreement.

      "Applicable Law" means (a) in respect of any Person, all provisions of
Laws applicable to such Person, and all orders and decrees of all courts and
arbitrators in proceedings or actions to which the Person in question is a party
and (b) in respect of contracts made or performed in the State of Texas,
"Applicable Law" shall also mean the laws of the United States of America,
including, without limitation the foregoing, 12 USC Sections 85 and 86, as
amended to the date hereof and as the same may be amended at any time and from
time to time hereafter, and any other statute of the United States of America
now or at any time hereafter prescribing the maximum rates of interest on loans
and extensions of credit, and the laws of the State of Texas.

      "Applicable Rate" means the following percentages per annum:



                                                                    APPLICABLE RATE     APPLICABLE      APPLICABLE RATE
PRICING                                                             FOR EURODOLLAR     RATE FOR BASE    FOR COMMITMENT
 LEVEL                    LEVERAGE RATIO                               RATE LOANS        RATE LOANS          FEE
- -------      -----------------------------------------------        ---------------    -------------    ---------------
                                                                                            
1            Less than 1.00 to 1                                        0.875                0.00             0.25

2            Greater than or equal to 1.00 to 1 but less                1.125                0.00             0.25
             than 1.50 to 1

3            Greater than or equal to 1.50 to 1 but less                1.375                0.00             0.25
             than 2.00 to 1

4            Greater than or equal to 2.00 to 1 but less                1.625                0.00             0.30
             than 2.25 to 1

5            Greater than or equal to 2.25 to 1                         1.875                0.00             0.30


            The Applicable Rate shall be adjusted on each Adjustment Date as
      tested by using the Leverage Ratio set forth on the Compliance Certificate
      on each Adjustment Date. If the financial statements required pursuant to
      Section 6.01 hereof and the related Compliance Certificate required
      pursuant to Section 6.02(a) hereof are not received by the Administrative
      Agent by the date required, the Applicable Rate shall be determined using
      Pricing Level 5 until such time as such financial statements and
      Compliance Certificate are received. Notwithstanding the foregoing, the
      Applicable Rate in effect from and after the Closing Date through the date
      on which another Pricing Level would otherwise be in effect based on the
      receipt of the Company's Compliance Certificate for the period ending
      March 31, 2005 shall be Level 3.

      "Approved Fund" has the meaning specified in Section 10.07(g) hereof.

      "Assets" means, as of any date, the assets which would be reflected on a
balance sheet of the Borrower and its Subsidiaries on a combined and
consolidated basis prepared as of such date in accordance with GAAP.

                                       3



      "Assignment and Acceptance" means an Assignment and Acceptance
substantially in the form of Exhibit A.

      "Attorney Costs" means and includes all reasonable fees and disbursements
of any law firm or other external counsel.

      "Attributable Indebtedness" means, on any date, (a) in respect of any
Capital Lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.

      "Audited Financial Statements" means the audited consolidated balance
sheet of the Borrower and its Subsidiaries for the fiscal year ended December
31, 2003 and the related consolidated statements of income, stockholders' equity
and cash flows for such fiscal year of the Borrower.

      "Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the Prime Rate in
effect for such day. Any change in such rate announced by Wells Fargo shall take
effect at the opening of business on the day specified in the public
announcement of such change.

      "Base Rate Loan" means a Loan that bears interest based on the Base Rate.

      "Board" means the Board of Governors of the Federal Reserve System of the
United States of America.

      "Borrower" has the meaning set forth in the introductory paragraph hereto.

      "Borrowing" means a Revolving Borrowing or a Swing Line Borrowing, as the
context may require.

      "British Pounds Sterling" and "(pound)" means the lawful currency of
England.

      "Business Day" means any day other than a Saturday, Sunday, or other day
on which commercial banks are authorized to close under the Laws of, or are in
fact closed in, the state where the Administrative Agent's Office is located
and, if such day relates to any Eurodollar Rate Loan, means any such day on
which dealings in Dollar deposits are conducted by and between banks in the
applicable offshore Dollar interbank market.

      "Capital Lease" means, as of any date, any lease of property, real or
personal, which would be capitalized on a balance sheet of the lessee prepared
as of such date, in accordance with GAAP, together with any other lease by such
lessee which is in substance a financing lease, including without limitation,
any lease under which (a) such lessee has or will have an option to purchase the
property subject thereto at a nominal amount or an amount less than a reasonable
estimate of the fair market value of such property as of the date such lease is
entered into or

                                       4



(b) the term of the lease approximates or exceeds the expected useful life of
the property leased thereunder.

      "Capital Stock" means, as to any Person, the equity interests in such
Person, including, without limitation, the shares of each class of capital stock
in any Person that is a corporation, each class of partnership interest in any
Person that is a partnership, and each class of membership interest in any
Person that is a limited liability company, and any right to subscribe for or
otherwise acquire any such equity interests.

      "Cash Collateralize" means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of each of the L/C Issuers and the
Lenders, as collateral for the L/C Obligations, cash or deposit account balances
pursuant to documentation in form and substance satisfactory to the
Administrative Agent and each L/C Issuer (which documents are hereby consented
to by the Lenders). Derivatives of such term shall have corresponding meaning.
The Borrower hereby grants the Administrative Agent, for the benefit of each L/C
Issuer and the Lenders, a Lien on all such cash and deposit account balances.
Cash collateral shall be maintained in blocked, interest bearing deposit
accounts at Wells Fargo.

      "Cash on Hand", as of any date of determination, is the amount equal to
the amount of cash and cash equivalents, determined in accordance with GAAP, as
it appears on the consolidated balance sheet of the Borrower and the
Consolidated Subsidiaries, in each case as of such date of determination.

      "Cashland Seller Note" means that certain subordinated promissory note of
the Borrower payable to the order of Schear Financial Services, LLC in the
principal amount of $2,500,000 dated February 1, 2004, the terms of which shall
at all times be subordinated to the Obligations pursuant to terms reasonably
satisfactory to the Required Lenders.

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

            (a) any "person" or "group" (as such terms are used in Sections
      13(d) and 14(d) of the Exchange Act, but excluding any employee benefit
      plan of such person or its subsidiaries, and any person or entity acting
      in its capacity as trustee, agent or other fiduciary or administrator of
      any such plan) becomes the "beneficial owner" (as defined in Rules 13d-3
      and 13d-5 under the Exchange Act, except that a person or group shall be
      deemed to have "beneficial ownership" of all securities that such person
      or group has the right to acquire (such right, an "option right"), whether
      such right is exercisable immediately or only after the passage of time),
      directly or indirectly, of 50% or more of the equity securities of such
      Person entitled to vote for members of the board of directors or
      equivalent governing body of such Person on a fully-diluted basis (and
      taking into account all such securities that such person or group has the
      right to acquire pursuant to any option right); or

            (b) during any period of 24 consecutive months, a majority of the
      members of the board of directors or other equivalent governing body of
      such Person ceases to be composed of individuals (i) who were members of
      that board or equivalent governing

                                       5


      body on the first day of such period, (ii) whose election or nomination to
      that board or equivalent governing body was approved by individuals
      referred to in clause (i) above constituting at the time of such election
      or nomination at least a majority of that board or equivalent governing
      body or (iii) whose election or nomination to that board or other
      equivalent governing body was approved by individuals referred to in
      clauses (i) and (ii) above constituting at the time of such election or
      nomination at least a majority of that board or equivalent governing body
      (excluding, in the case of both clause (ii) and clause (iii), any
      individual whose initial nomination for, or assumption of office as, a
      member of that board or equivalent governing body occurs as a result of an
      actual or threatened solicitation of proxies or consents for the election
      or removal of one or more directors by any person or group other than a
      solicitation for the election of one or more directors by or on behalf of
      the board of directors).

      "Closing Date" means the first date all the conditions precedent in
Section 4.01 hereof are satisfied or waived in accordance with Section 4.01
hereof (or, in the case of Section 4.01(b) hereof, waived by the Person entitled
to receive the applicable payment).

      "Code" means the Internal Revenue Code of 1986.

      "Commercial Letter of Credit" means, any documentary Letter of Credit
which is drawable upon presentation of documents evidencing the sale or shipment
of goods purchased by the Borrower in the ordinary course of its business.

      "Commitment Fee" has the meaning specified in Section 2.09(a) hereof.

      "Communications" has the meaning specified in Section 10.02(c) hereof.

      "Compensation Period" has the meaning specified in Section 2.12(d)(ii)
hereof.

      "Compliance Certificate" means a certificate substantially in the form of
Exhibit B.

      "Consequential Loss" means, with respect to the Borrower's payment of all
or any portion of the then outstanding principal amount of a Lender's Eurodollar
Rate Loan on a day other than the last day of the Interest Period related
thereto, any loss, cost or expense incurred by such Lender as a result of the
timing of such payment or in redepositing such principal amount, including any
expense or penalty incurred by such Lender on redepositing such principal
amount, but excluding any loss of the Applicable Rate on the relevant Eurodollar
Rate Loans.

      "Consolidated Subsidiaries" means, all Subsidiaries of the Borrower which
are included in the consolidated financial statements of the Borrower.

      "Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.

      "Credit Extension" means each of the following: (a) a Revolving Borrowing,
(b) a Swing Line Borrowing, and (c) an L/C Credit Extension.

                                       6



      "Debtor Relief Laws" means the Bankruptcy Code of the United States of
America, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States of America or
other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.

      "Default" means any event that, with the giving of any notice, the passage
of time, or both, would be an Event of Default.

      "Default Rate" means an interest rate equal to (a) the Base Rate plus (b)
the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per
annum; provided, however, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Eurodollar Rate Loan plus 2% per
annum, in each case to the fullest extent permitted by Applicable Law.

      "Disposition" or "Dispose" means the sale, transfer, license or other
disposition (including any sale and leaseback transaction, but excluding a
Dividend) of any property by any Person, including any sale, assignment,
transfer or other disposal, with or without recourse, of any notes or accounts
receivable or any rights and claims associated therewith.

      "Dividends" in respect of any Person, means (a) cash distributions or any
other distributions of property, or otherwise, on, or in respect of, any class
of Capital Stock of such Person (other than dividends or distributions payable
solely in common stock of such Person, or options, warrants or other rights to
purchase common stock of such Person), and (b) any and all funds, cash or other
payments made in respect of the redemption, repurchase or acquisition of such
Capital Stock (specifically including, without limitation, a Treasury Stock
Purchase, but excluding, purchases under employee benefit plans), unless such
Capital Stock shall be redeemed or acquired through the exchange of such Capital
Stock with Capital Stock of the same class or options or warrants to purchase
such Capital Stock.

      "Dollar" and "$" means lawful money of the United States of America.

      "Dollar Equivalent" means, on any date, the amount of Dollars into which
an amount of applicable foreign currency may be converted on such date.

      "Domestic Subsidiary" means any Subsidiary of the Borrower other than a
Foreign Subsidiary.

      "EBITDA" means, with respect to any period, (a) Net Income for such
period, plus (b) without duplication and to the extent deducted in determining
Net Income for such period, (i) Interest Expense for such period, (ii) federal,
state, local and foreign income and franchise taxes of the Borrower and its
Subsidiaries for such period, (iii) depreciation and amortization expenses of
the Borrower and its Subsidiaries for such period and other non-cash charges of
the Borrower and its Subsidiaries, minus (c) without duplication and to the
extent included in determining Net Income for such period, any extraordinary
gains and extraordinary non-cash credits of the Borrower and its Subsidiaries
for such period.

      "Eligible Assignee" has the meaning specified in Section 10.07(g) hereof.

                                       7



      "Environmental Laws" means all Laws relating to environmental, health,
safety and land use matters applicable to any property.

      "ERISA" means the Employee Retirement Income Security Act of 1974 and any
regulations issued pursuant thereto.

      "ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).

      "ERISA Event" means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Pension Plan amendment as a termination under Sections 4041 or
4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan
or Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA with respect to a Pension Plan, other than PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA
Affiliate.

      "Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Rate Loan (rounded upward to the next 1/16th of 1%):

            (a) the rate per annum equal to the rate determined by the
      Administrative Agent to be the offered rate that appears on the page of
      the Telerate screen (or any successor thereto) that displays an average
      British Bankers Association Interest Settlement Rate for deposits in
      Dollars (for delivery on the first day of such Interest Period) with a
      term equivalent to such Interest Period, determined as of approximately
      11:00 a.m. (London time) two Business Days prior to the first day of such
      Interest Period, or

            (b) if the rate referenced in the preceding subsection (a) does not
      appear on such page or service or such page or service shall cease to be
      available, the rate per annum equal to the rate determined by the
      Administrative Agent to be the offered rate on such other page or other
      service that displays an average British Bankers Association Interest
      Settlement Rate for deposits in Dollars (for delivery on the first day of
      such Interest Period) with a term equivalent to such Interest Period,
      determined as of approximately 11:00 a.m. (London time) two Business Days
      prior to the first day of such Interest Period, or

                                       8



            (c) if the rates referenced in the preceding subsections (a) and (b)
      are not available, the rate per annum determined by the Administrative
      Agent as the rate of interest at which deposits in Dollars for delivery on
      the first day of such Interest Period in same day funds in the approximate
      amount of the Eurodollar Rate Loan being made, continued or converted by
      Wells Fargo and with a term equivalent to such Interest Period would be
      offered by Wells Fargo's London Branch to major banks in the offshore
      Dollar market at their request at approximately 11:00 a.m. (London time)
      two Business Days prior to the first day of such Interest Period.

      "Eurodollar Rate Loan" means a Revolving Loan that bears interest at a
rate based on the Eurodollar Rate.

      "Event of Default" means any of the events or circumstances specified in
Section 8.01.

      "Evergreen Letter of Credit" has the meaning specified in Section
2.03(b)(iii) hereof.

      "Exchange Act" means the Securities Exchange Act of 1934.

      "Existing Credit Agreement" has the meaning set forth in the second
paragraph hereto.

      "Existing Foreign Investments" means the 80,400,000 SEK Loan Note issued
on September 8, 2004 by Svensk Pantbelaning Holdings AB (f/k/a Guldskalen D 409
AB) and made payable to Borrower and the 13,400,000 SEK Convertible Debenture
Certificate issued on September 8, 2004 by Svensk Pantbelaning Holdings AB
(f/k/a Guldskalen D 409 AB) to Borrower, each of which is in existence as of the
date hereof.

      "Existing Letters of Credit" means the letters of credit set forth on
Schedule 2.03.

      "Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards to the nearest 1/100 of 1%) equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank on the Business Day next succeeding such day; provided that
(a) if such day is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate charged to Wells Fargo on such day on such
transactions as determined by the Administrative Agent.

      "Fixed Charge Coverage Ratio" means, as of any date of determination, the
ratio of (a) the sum of (i) Adjusted EBITDA plus (ii) rent and lease expense, in
each case for the period of four consecutive fiscal quarters ending on such date
to (b) the sum of (i) Interest Expense, plus (ii) all scheduled payments on
Funded Debt (specifically excluding any unscheduled mandatory prepayments and
any optional prepayments on Funded Debt), plus (iii) rent and lease expense, in
each case for the four consecutive fiscal quarters ending on such date.

      "Foreign Lender" has the meaning specified in Section 10.15 hereof.

                                       9



      "Foreign Plan" means any pension plan or other deferred compensation plan,
program or arrangement maintained by a Foreign Subsidiary which, under
applicable local law, is required to be funded through a trust or other funding
vehicle.

      "Foreign Subsidiary" means (a) each Subsidiary of the Borrower or any
ERISA Affiliate which is organized under the laws of a jurisdiction other than
the United States of America or any State thereof, if any, and (b) each
Subsidiary of the Borrower or any ERISA Affiliate of which a majority of the
revenues, earnings or other total assets (determined on a consolidated basis
with its Subsidiaries) are located or derived from operations outside of the
United States of America, if any.

      "Fund" has the meaning specified in Section 10.07(g) hereof.

      "Funded Debt" means, as to the Borrower and its Subsidiaries at a
particular time, all of the following (without duplication):

            (a) all obligations for borrowed money and all obligations evidenced
      by bonds, debentures, notes, loan agreements or other similar instruments;

            (b) obligations in respect of earnout or similar payments deemed
      earned and payable in cash or which may be payable in cash at the seller's
      or obligee's option and to the extent the same appears on the Borrower's
      consolidated balance sheet;

            (c) obligations in respect of Capital Leases and Synthetic Lease
      Obligations;

            (d) any Receivables Facility Attributed Indebtedness; and

            (e) obligations in respect of any Redeemable Stock.

      "GAAP" means generally accepted accounting principles as in effect in the
United States as set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or
such other principles as may be approved by a substantial segment of the
accounting profession, that are applicable to the circumstances as of the date
of determination, consistently applied. If at any time any change in GAAP would
affect the computation of any financial ratio or requirement set forth in any
Loan Document, and either the Borrower or the Required Lenders shall so request,
the Administrative Agent, the Lenders and the Borrower shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent thereof
in light of such change in GAAP (subject to the approval of the Required Lenders
such approval not to be unreasonably withheld and no amendment fee will be
payable to the Lenders in connection with such amendment); provided that, until
so amended, (a) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (b) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.

                                       10



      "Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or 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.

      "Guarantors" means, collectively, each Domestic Subsidiary.

      "Guaranty" means the Guaranty made by one or more of the Guarantors,
substantially in the form of Exhibit C.

      "Guaranty Obligation" means, as to any Person, (a) any obligation,
contingent or otherwise, of such Person guarantying or having the economic
effect of guarantying any Indebtedness or other obligation payable or
performable by another Person (the "primary obligor") in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation, (ii) to purchase or lease
property, securities or services for the purpose of assuring the obligee in
respect of such Indebtedness or other obligation of the payment or performance
of such Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity of the
primary obligor so as to enable the primary obligor to pay such Indebtedness or
other obligation, or (iv) entered into for the purpose of assuring in any other
manner the obligees in respect of such Indebtedness or other obligation of the
payment or performance thereof or to protect such obligees against loss in
respect thereof (in whole or in part), or (b) any Lien on any assets of such
Person securing any Indebtedness or other obligation of any other Person,
whether or not such Indebtedness or other obligation is assumed by such Person;
provided, however, that the term "Guaranty Obligation" shall not include (x) the
purchase of instruments in respect of Investments otherwise permitted by Section
7.03(a) and (y) endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Guaranty Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guaranty
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the guarantying Person
in good faith.

      "Highest Lawful Rate" at the particular time in question the maximum rate
of interest which, under Applicable Law, any Lender is then permitted to charge
on the Obligations. If the maximum rate of interest which, under Applicable Law,
any Lender is permitted to charge on the Obligations shall change after the date
hereof, the Highest Lawful Rate shall be automatically increased or decreased,
as the case may be, from time to time as of the effective time of each change in
the Highest Lawful Rate without notice to the Borrower. For purposes of
determining the Highest Lawful Rate under Applicable Law, the indicated rate
ceiling shall be the lesser of (a)(i) the "weekly ceiling", as such ceiling is
computed in Section 303.003 of the Texas Finance Code, as amended, or (ii) if
available in accordance with the terms thereof and at the Administrative Agent's
option after notice to the Borrower and otherwise in accordance with the terms
of Section 303.103 of the Texas Finance Code, as amended, the "annualized
ceiling", as such ceiling is determined in accordance with Section 303.009 of
the Texas Finance Code, as

                                       11



amended, and (b)(i) if the amount outstanding under this Agreement is less than
$250,000, twenty-four percent (24%), or (ii) if the amount outstanding under
this Agreement is equal to or greater than $250,000, twenty-eight percent (28%)
per annum.

      "Honor Date" has the meaning specified in Section 2.03(c)(i) hereof.

      "ICC" has the meaning specified in Section 2.03(h) hereof.

      "Indebtedness" means, as to any Person at a particular time, all of the
following:

            (a) all obligations of such Person for borrowed money and all
      obligations of such Person evidenced by bonds, debentures, notes, loan
      agreements or other similar instruments;

            (b) any direct or contingent obligations of such Person arising
      under letters of credit (including standby and commercial), banker's
      acceptances, bank guaranties, surety bonds and similar instruments;

            (c) net obligations under any Interest Rate Protection Agreement in
      an amount equal to (i) if such Interest Rate Protection Agreement has been
      closed out, the unpaid Termination Value thereof, or (ii) if such Interest
      Rate Protection Agreement has not been closed out, the mark-to-market
      value thereof determined on the basis of readily available quotations
      provided by any recognized dealer in such Interest Rate Protection
      Agreement;

            (d) whether or not so included as liabilities in accordance with
      GAAP, all obligations of such Person to pay the deferred purchase price of
      property or services, and indebtedness (excluding prepaid interest
      thereon) secured by a Lien on property owned or being purchased by such
      Person (including indebtedness arising under conditional sales or other
      title retention agreements), whether or not such indebtedness shall have
      been assumed by such Person or is limited in recourse;

            (e) accrued obligations in respect of earnout or similar payments
      payable in cash or which may be payable in cash at the seller's or
      obligee's option;

            (f) Capital Lease and Synthetic Lease Obligations;

            (g) any Redeemable Stock of such Person;

            (h) any Receivables Facility Attributed Indebtedness; and

            (i) all Guaranty Obligations of such Person in respect of any of the
      foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer, unless such Indebtedness is expressly made
non-recourse to such Person except for customary exceptions reasonably
acceptable to the Required Lenders. The amount of any Capital Lease or

                                       12



Synthetic Lease Obligation as of any date shall be deemed to be the amount of
Attributable Indebtedness in respect thereof as of such date.

      "Indemnified Liabilities" has the meaning set forth in Section 10.05
hereof.

      "Indemnitees" has the meaning set forth in Section 10.05 hereof.

      "Information" has the meaning set forth in Section 10.08 hereof.

      "Interest Expense" means, with respect to any period, interest expense,
whether paid or accrued (including the interest component of Capital Leases), of
the Borrower and its Subsidiaries, all as determined in conformity with GAAP, as
it appears on the consolidated income statement of the Borrower and its
Consolidated Subsidiaries as of such date of determination.

      "Interest Payment Date" means, (a) as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan; provided,
however, that if any Interest Period for a Eurodollar Rate Loan exceeds three
months, the respective dates that fall every three months after the beginning of
such Interest Period shall also be Interest Payment Dates; and (b) as to any
Base Rate Loan (including a Swing Line Loan), the first Business Day of each
Quarterly Date and the Maturity Date.

      "Interest Period" means as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date 7 or 14 days or one,
two, three or six months thereafter, as selected by the Borrower in its
Revolving Loan Notice; provided that:

            (i) any Interest Period that would otherwise end on a day that is
      not a Business Day shall be extended to the next succeeding Business Day
      unless, in the case of a Eurodollar Rate Loan, such Business Day falls in
      another calendar month, in which case such Interest Period shall end on
      the next preceding Business Day;

            (ii) any Interest Period of one month or more pertaining to a
      Eurodollar Rate 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; and

            (iii) no Interest Period shall extend beyond the scheduled Maturity
      Date.

      "Interest Rate Protection Agreement" means (a) any and all rate swap
transactions, basis swaps, credit derivative transactions, forward rate
transactions, commodity swaps, commodity options, forward commodity contracts,
equity or equity index swaps or options, bond or bond price or bond index swaps
or options or forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange transactions, cap
transactions, floor transactions, collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, spot
contracts, any cancellations, buy backs, reversals, terminations or assignments
of any of the foregoing, or any other similar transactions or any

                                       13



combination of any of the foregoing (including any options to enter into any of
the foregoing), whether or not any such transaction is governed by or subject to
any master agreement, and (b) any and all transactions of any kind, and the
related confirmations, which are subject to the terms and conditions of, or
governed by, any form of master agreement published by the International Swaps
and Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement, together
with any related schedules, a "Master Agreement"), including any such
obligations or liabilities under any Master Agreement.

      "Interest Rate Protection Obligations" means any and all obligations of
the Borrower to any Lender or an Affiliate of a Lender under any Affiliated IRP
Agreement.

      "Investment" means, as to any Person, any acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of
capital stock or other securities of another Person, (b) a loan, advance or
capital contribution (including a contribution of property) to, Guaranty
Obligation with respect to the debt of, or purchase or other acquisition of any
other debt or equity participation or interest in, another Person, including any
partnership or joint venture interest in such other Person, or (c) the purchase
or other acquisition (in one transaction or a series of transactions) of assets
of another Person that constitute a business unit. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.

      "IRS" means the United States Internal Revenue Service.

      "Laws" means, collectively, all international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

      "L/C Advance" means, with respect to each Lender, such Lender's
participation in any L/C Borrowing in accordance with its Pro Rata Share.

      "L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the date when made
or refinanced as a Revolving Borrowing.

      "L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.

      "L/C Issuer" means any Lender in its capacity as an issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.

                                       14



      "L/C Obligations" means, as of any date of determination, the aggregate
undrawn face amount of all outstanding Letters of Credit plus the aggregate of
all Unreimbursed Amounts, including all L/C Borrowings.

      "Lender" has the meaning specified in the introductory paragraph hereto
and, as the context requires, includes each L/C Issuer and the Swing Line
Lender.

      "Lending Office" means, as to any Lender, the office or offices of such
Lender described as such on Schedule 10.02, or such other office or offices as a
Lender may from time to time notify the Borrower and the Administrative Agent.

      "Letter of Credit" means any letter of credit issued hereunder and shall
include the Existing Letters of Credit. A Letter of Credit may be a Commercial
Letter of Credit or a Standby Letter of Credit.

      "Letter of Credit Application" means an application and agreement for the
issuance or amendment of a letter of credit in the form from time to time in use
by any L/C Issuer.

      "Letter of Credit Expiration Date" means (a) with respect to Standby
Letters of Credit, the earlier of (i) the day that is ten days prior to the
Maturity Date (or, if such day is not a Business Day, the next preceding
Business Day) and (ii) one year after the date of issuance of such Letter of
Credit (or, if such day is not a Business Day, the next preceding Business Day)
and (b) with respect to Commercial Letters of Credit, the earlier of (i) the day
that is 120 days after the date of issuance of such Letter of Credit (or, if
such day is not a Business Day, the next preceding Business Day) and (ii) the
day that is ten days prior to the Maturity Date (or, if such day is not a
Business Day, the next preceding Business Day).

      "Letter of Credit Sublimit" means an amount equal to the lesser of (a)
$20,000,000 and (b) the Aggregate Revolving Commitments. The Letter of Credit
Sublimit is part of, and not in addition to, the Aggregate Revolving
Commitments.

      "Leverage Ratio" means, as of any date of determination, for the Borrower
and its Subsidiaries on a consolidated basis, the ratio of (a) Adjusted Funded
Debt as of such date to (b) Adjusted EBITDA for the period of the four
consecutive fiscal quarters ending on such date.

      "Lien" means any mortgage, pledge, hypothecation, assignment as security
for Indebtedness, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of any financing statement under the
Uniform Commercial Code or comparable Laws of any jurisdiction), including the
interest of a purchaser of accounts receivable.

      "Litigation" means any proceeding, claim, lawsuit, arbitration, and/or
investigation by or before any Governmental Authority, including, without
limitation, proceedings, claims, lawsuits, and/or investigations under or
pursuant to any environmental, occupational, safety and health, antitrust,
unfair competition, securities, tax or other Law, or under or pursuant to any
contract, agreement or other instrument.

                                       15



      "Loan" means an extension of credit by a Lender to the Borrower under
Article II in the form of a Revolving Loan or a Swing Line Loan.

      "Loan Documents" means this Agreement, the Notes, the Agent Fee Letters,
each Guaranty, each Request for Credit Extension, each Compliance Certificate,
and any other agreement executed, delivered or performable by any Loan Party in
connection herewith or as security for the Obligations.

      "Loan Parties" means, collectively, the Borrower and each Guarantor.

      "Material Adverse Effect" means any act or circumstance or event which (a)
causes an Event of Default or causes a Default which could reasonably be
expected to become an Event of Default, (b) otherwise is material and adverse to
the consolidated financial condition or business operations of the Borrower and
its Subsidiaries and which could reasonably be expected to result in a Default
or an Event of Default, (c) in any manner whatsoever materially and adversely
affects the validity or enforceability of any of the Loan Documents in a manner
that impairs the ability of the Lenders to exercise their remedies under this
Agreement or (d) impairs the ability of the Borrower or any of its Subsidiaries
to perform its obligations under any of the Loan Documents to which it is a
party.

      "Maturity Date" means (a) February 24, 2010, or (b) such earlier date upon
which the Revolving Commitments may be terminated in accordance with the terms
hereof.

      "Moody's" means Moody's Investors Services, Inc. and any successor
thereto.

      "Multiemployer Plan" means any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding three
calendar years, has made or been obligated to make contributions.

      "Negative Pledge" means any agreement, contract or other arrangement
whereby the Borrower or any of its Subsidiaries is prohibited from, or would
otherwise be in default as a result of, creating, assuming, incurring or
suffering to exist, directly or indirectly, any Lien on any of its assets.

      "Net Income" means, with respect to any period, the net income or loss of
the Borrower and its Subsidiaries on a consolidated basis for such period,
determined in accordance with GAAP; provided that there shall be excluded the
income or loss of any Person (other than a Subsidiary) of which the Borrower or
any Subsidiary owns Capital Stock, except to the extent of the amount of
dividends or other distributions actually paid to the Borrower or any of the
Subsidiaries during such period.

      "Net Proceeds" means, with respect to the Disposition of any Asset
(including Capital Stock) by or of, or the issuance of Indebtedness to, any
Person, the proceeds received by such Person in connection with such transaction
after deducting therefrom the aggregate, without duplication, of the following
amounts to the extent properly attributable to such transaction or to any asset
that may be the subject thereof: (i) reasonable brokerage commissions, legal
fees, finder's fees, financial advisory fees, fees for solvency opinions,
fairness opinions, accounting

                                       16



fees, underwriting fees, investment banking fees, survey, title insurance,
appraisals, notaries and other similar commissions and fees and expenses, in
each case, to the extent paid, payable or reimbursed by such Person; (ii)
filing, recording or registration fees or charges or similar fees or charges
paid by such Person; (iii) taxes paid or payable by such Person or any
shareholder, partner or member of such Person to governmental taxing authorities
as a result of such sale or other disposition (after taking into account any
available tax credits or deductions or any tax sharing arrangements to the
extent actually utilized); and (iv) payment of the outstanding principal amount
of, premium or penalty, if any, and interest on any Indebtedness (other than the
Obligations) that is secured by a Lien on or otherwise related or attributable
to the stock or asset in question, to the extent required or permitted pursuant
to the documentation evidencing such Indebtedness. To the extent that any note
is obtained in such Disposition, the proceeds received in respect thereof shall
be deemed to be the value of such note as determined in accordance with GAAP. To
the extent that any securities are obtained in any such sale, lease, transfer or
other disposition, the proceeds received in respect thereof shall be deemed to
be the fair market value of such securities as of the date of such disposition.

      "Net Worth" means, as of any date, the total shareholder's equity
(including Capital Stock, additional paid-in capital, and retained earnings
after deducting treasury stock) which would appear on a balance sheet of the
Borrower and its Subsidiaries on a combined and consolidated basis prepared as
of such date in accordance with GAAP, but excluding all other comprehensive
income or losses resulting from foreign currency translation adjustments or
derivative value fluctuation.

      "Non-renewal Notice Date" has the meaning specified in Section
2.03(b)(iii) hereof.

      "Note Agreements" means, collectively, (a) that certain Note Agreement
dated July 7, 1995, entered into by and between the Borrower and Teachers, as
amended to the date of this Agreement and such other further amendments not
otherwise prohibited by Section 7.15 hereof; (b) that certain Note Agreement
dated December 1, 1997 among the Borrower and the "Purchasers" named therein, as
amended to the date of this Agreement and such other further amendments not
otherwise prohibited by Section 7.15 hereof; and (c) that certain Note Agreement
dated as of August 12, 2002 entered into by and between the Borrower and the
"Purchasers" named therein, as amended to the date of this Agreement and such
other further amendments not otherwise prohibited by Section 7.15 hereof..

      "Notes" means, collectively, the Revolving Loan Notes and the Swing Line
Note.

      "Notice" has the meaning set forth in Section 10.02(c) hereof.

      "Obligations" means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising. Without
limiting the generality of the foregoing, "Obligations" includes all amounts
which would be owed by any Loan Party or any other Person (other than
Administrative Agent or Lenders) to Administrative Agent, Lenders or any
Affiliate of a Lender under any Loan Document, but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving any Loan Party or any other
Person

                                       17



(including all such amounts which would become due or would be secured but for
the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding of any other Loan Party or any other Person
under any Debtor Relief Law).

      "Officer's Certificate" means a certificate signed by the chief executive
officer of the Borrower substantially in the form of Exhibit H.

      "Organization Documents" means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws; (b) with respect to any
limited liability company, the articles of formation and operating agreement;
and (c) with respect to any partnership, joint venture, trust or other form of
business entity, the partnership, joint venture or other applicable agreement of
formation and any agreement, instrument, filing or notice with respect thereto
filed in connection with its formation with the secretary of state or other
department in the state of its formation, in each case as amended from time to
time.

      "Other Taxes" has the meaning set forth in Section 3.01(b) hereof.

      "Outstanding Amount" means (i) with respect to Revolving Loans and Swing
Line Loans on any date, the aggregate outstanding principal amount thereof after
giving effect to any borrowings and prepayments or repayments of Revolving Loans
and Swing Line Loans, as the case may be, occurring on such date; and (ii) with
respect to any L/C Obligations on any date, the amount of such L/C Obligations
on such date after giving effect to any L/C Credit Extension occurring on such
date and any other changes in the aggregate amount of the L/C Obligations as of
such date, including as a result of any reimbursements of outstanding unpaid
drawings under any Letters of Credit or any reductions in the maximum amount
available for drawing under Letters of Credit taking effect on such date.

      "Participant" has the meaning specified in Section 10.07(d) hereof.

      "PBGC" means the Pension Benefit Guaranty Corporation.

      "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 the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer plan
(as described in Section 4064(a) of ERISA) has made contributions at any time
during the immediately preceding five plan years.

      "Permitted Liens" means: (a) Liens (if any) granted in favor of the
Lenders to secure payment of the Obligations and other Indebtedness of the
Borrower specifically approved by the Lenders in writing; (b) pledges or
deposits made to secure payment of worker's compensation (or to participate in
any fund in connection with worker's compensation), unemployment insurance,
pensions or social security programs, other than any Lien imposed by ERISA; (c)
Liens imposed by mandatory provisions of law such as for materialmen's,
mechanics, warehousemen's and other like Liens arising in the ordinary course of
business, securing Indebtedness whose payment is not yet due and payable or if
the same are being contested in good faith and as to which adequate reserves
have been provided; (d) Liens for taxes, assessments and governmental charges or
levies imposed upon a Person or upon such Person's income or profits or
property, if the same are not

                                       18



yet due and payable or if the same are being contested in good faith and as to
which adequate reserves have been provided; (e) good faith deposits in
connection with tenders, leases, real estate bids or contracts (other than
contracts involving the borrowing of money), pledges or deposits to secure
public or statutory obligations, deposits to secure (or in lieu of) surety,
stay, appeal or customs bonds and deposits to secure the payment of taxes,
assessments, customs duties or other similar charges; (f) encumbrances
consisting of zoning restrictions, easements, or other restrictions on the use
of real Property, provided that such do not impair the use of such Property for
the uses intended, and none of which is violated by existing or proposed
structures or land use; (g) Liens securing purchase money Indebtedness, but only
to the extent that (i) such Indebtedness is permitted pursuant to Section
7.02(b) hereof, (ii) any such Lien secures the indebtedness incurred to purchase
the asset encumbered thereby and (iii) such Indebtedness does not exceed the
cost of such asset, (h) Liens against Temporary Cash Investments, to the extent
that such Liens secure short-term indebtedness permitted under Section 7.02(j)
hereof; (i) Liens arising by operation of law in connection with judgments being
appealed to the extent such Liens would not otherwise result in an Event of
Default under Section 8.01(j); and (j) landlord's liens arising in the ordinary
course of the Borrower's or the Subsidiaries' leasing activities.

      "Person" means any individual, trustee, corporation, general partnership,
limited partnership, limited liability company, joint stock company, trust,
unincorporated organization, bank, business association, firm, joint venture or
Governmental Authority.

      "Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or any ERISA Affiliate.

      "Platform" has the meaning set forth in Section 10.02(c) hereof.

      "Prime Rate" means, at any time, the rate of interest most recently
announced within Wells Fargo at its principal office in San Francisco as its
Prime Rate, with the understanding that Wells Fargo's Prime Rate is one of its
base rates and serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto, and is evidenced by the
recording thereof after its announcement in such internal publication or
publications as Wells Fargo may designate. Any change in such rate announced
within Wells Fargo shall take effect on the opening of business on the day such
change is announced within Wells Fargo.

      "Private Placement Debt" means the indebtedness of the Borrower (and
Guaranty of Domestic Subsidiaries) in the aggregate original principal amount of
(a) $20,000,000 under its senior notes designated "8.14% Senior Notes Due 2007",
each payable in accordance with the respective terms of such notes and the Note
Agreement entered into with respect thereto; (b) $30,000,000 under its senior
notes designated "7.10% Senior Notes Due January 2, 2008," each payable in
accordance with the respective terms of such notes and the Note Agreement
entered into with respect thereto; and (c) $42,500,000 under its senior notes
designated "7.25% Senior Notes Due 2009", each payable in accordance with the
respective terms of such notes and the Note Agreement entered into with respect
thereto.

      "Pro Rata Share" means, with respect to each Lender, the percentage
(carried out to the ninth decimal place) of the Aggregate Revolving Commitments
set forth opposite the name of such Lender on Schedule 2.01, as such share may
be adjusted as contemplated herein.

                                       19



      "Property" means any investment in any kind of property or asset, whether
real, personal or mixed, tangible or intangible.

      "Quarterly Date" means the first Business Day of each January, April, July
and October during the term of this Agreement.

      "Receivables Facility Attributed Indebtedness" means the amount of
obligations outstanding under a receivables purchase facility on any date of
determination that would be characterized as principal if such facility were
structured as a secured lending transaction other than a purchase.

      "Redeemable Stock" means the portion of any Capital Stock of the Borrower
or any of its Subsidiaries which prior to the Maturity Date is or may be (a)
unilaterally redeemable (by seeking final or similar payments or otherwise) upon
the occurrence of certain events or otherwise; (b) redeemable at the option of
the holder thereof or (c) convertible into Indebtedness.

      "Register" has the meaning set forth in Section 10.07(c) hereof.

      "Release Date" shall mean the date upon which all Obligations and all
Interest Rate Protection Obligations are paid in full and the Revolving
Commitments are terminated.

      "Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

      "Request for Credit Extension" means (a) with respect to a Revolving
Borrowing, a Revolving Loan Notice, (b) with respect to an L/C Credit Extension,
a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a
Swing Line Loan Notice.

      "Required Lenders" means, as of any date of determination, two or more
Lenders whose Voting Percentages aggregate more than 50%.

      "Responsible Officer" means the chief executive officer, president, chief
financial officer, corporate controller, treasurer, vice president of finance or
corporate secretary of a Loan Party. Any document delivered hereunder that is
signed by a Responsible Officer of a Loan Party shall be conclusively presumed
to have been authorized by all necessary corporate, partnership and/or other
action on the part of such Loan Party and such Responsible Officer shall be
conclusively presumed to have acted on behalf of such Loan Party.

      "Restricted Payment" means, collectively, (a) Dividends, and (b) any
payment or prepayment of principal, interest, premium or penalty on any
Subordinated Debt or any defeasance, redemption, purchase, repurchase or other
acquisition or retirement for value, in whole or in part, of any Subordinated
Debt (including, without limitation, the setting aside of assets or the deposit
of funds therefor).

      "Revolving Borrowing" means a borrowing consisting of simultaneous
Revolving Loans of the same Type and having the same Interest Period made by
each of the Lenders pursuant to Section 2.01 hereof.

                                       20



      "Revolving Commitment" means, as to each Lender, its obligation to (a)
make Revolving Loans to the Borrower pursuant to Section 2.01 hereof, (b)
purchase participations in L/C Obligations, and (c) purchase participations in
Swing Line Loans, in an aggregate principal amount at any one time outstanding
not to exceed the amount set forth opposite such Lender's name on Schedule 2.01,
as such amount may be reduced, increased or adjusted from time to time in
accordance with this Agreement.

      "Revolving Loan" has the meaning specified in Section 2.01 hereof.

      "Revolving Loan Note" means a promissory note made by the Borrower in
favor of a Lender evidencing Revolving Loans made by such Lender, substantially
in the form of Exhibit D.

      "Revolving Loan Notice" means a notice of (a) a Revolving Borrowing, (b) a
conversion of Revolving Loans from one Type to the other, or (c) a continuation
of Revolving Loans as the same Type, pursuant to Section 2.02(a) hereof, which,
if in writing, shall be substantially in the form of Exhibit E.

      "SEK" means lawful currency of Sweden.

      "S&P" means Standard and Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. and any successor thereto.

      "Solvent" means, with respect to any Person, that the fair value of the
assets of such Person (both at fair valuation and at present fair saleable value
on a going concern basis) is, on the date of determination, greater than the
total amount of liabilities (including contingent and unliquidated liabilities)
of such Person as of such date and that, as of such date, such Person is able to
pay all liabilities of such Person as such liabilities mature and such Person
does not have unreasonably small capital with which to carry on its business. In
computing the amount of contingent or unliquidated liabilities at any time, such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability discounted to present value
at rates believed to be reasonable by such Person.

      "Standby Letter of Credit" means a Letter of Credit that is not a
Commercial Letter of Credit.

      "Subordinated Debt" means any Indebtedness of the Borrower or any
Subsidiary which is subordinated to the Obligations at all times pursuant to
terms reasonably satisfactory to the Required Lenders.

      "Subsidiary" of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned by such Person. Unless otherwise specified,
all references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a
Subsidiary or Subsidiaries of the Borrower.

                                       21



      "Swing Line" means the revolving credit facility made available by the
Swing Line Lender pursuant to Section 2.04 hereof.

      "Swing Line Borrowing" means a borrowing of a Swing Line Loan.

      "Swing Line Lender" means Wells Fargo in its capacity as provider of Swing
Line Loans, or any successor swing line lender hereunder.

      "Swing Line Loan" has the meaning specified in Section 2.04(a) hereof.

      "Swing Line Note" means a promissory note made by the Borrower in favor of
the Swing Line Lender evidencing Swing Line Loans made by such Lender,
substantially in the form of Exhibit F.

      "Swing Line Loan Notice" means a notice of a Swing Line Borrowing pursuant
to Section 2.04(b) hereof, which, if in writing, shall be substantially in the
form of Exhibit G.

      "Swing Line Sublimit" means an amount equal to the lesser of (a)
$10,000,000 and (b) the Aggregate Revolving Commitments. The Swing Line Sublimit
is part of, and not in addition to, the Aggregate Revolving Commitments.

      "Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

      "Taxes" has the meaning set forth in Section 3.01(a) hereof.

      "Teachers" means Teachers Insurance and Annuity Association of America.

      "Temporary Cash Investment" means any of the following investments: (a)
investments in open market investment grade commercial paper (rated at least A-1
or P-1), maturing within one hundred eighty (180) days after acquisition
thereof, (b) investments in marketable obligations, maturing within one hundred
eighty (180) days after acquisition thereof, issued or unconditionally
guaranteed by the United States of America or an instrumentality or agency
thereof and entitled to the full faith and credit of the United States of
America, (c) investments in money market funds that invest solely in the types
of investments permitted under clauses (a) and (b) hereof, (d) investments in
repurchase agreements of a domestic office of any of the Lenders which are fully
secured by securities described in clause (b) hereof, (e) short-term investments
in investment grade auction preferred stock, (f) certificates of deposit and
time deposits (including Eurodollar deposits) maturing within one hundred eighty
(180) days from the date of deposit thereof, with a domestic office of any of
the Lenders or any bank which is a national bank organized under the laws of the
United States of America and (i) having capital, surplus and undivided profits
of at least $100,000,000 or (ii) so long as all such deposits are federally
insured, and (g) investments, certificates of deposit and time deposits
(including Eurodollar deposits) of the types described above (but without the
grade classification required above) of or with a Lender.

                                       22



      "Termination Value" means, in respect of any one or more Interest Rate
Protection Agreements, after taking into account the effect of any legally
enforceable netting agreement relating to such Interest Rate Protection
Agreements, (a) for any date on or after the date such Interest Rate Protection
Agreements have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a) the amount(s) determined as the mark-to-market
value(s) for such Interest Rate Protection Agreements, as determined based upon
one or more mid-market or other readily available quotations provided by any
recognized dealer in such Interest Rate Protection Agreements (which may include
any Lender).

      "Treasury Stock Purchase" means any purchase, redemption, retirement,
cancellation, defeasance or other acquisition (including any sinking fund or
similar deposit for such purpose) by the Borrower or any Subsidiary of its
Capital Stock or any warrants, rights or options to acquire such Capital Stock.

      "Type" means with respect to a Revolving Loan, its character as a Base
Rate Loan or a Eurodollar Rate Loan.

      "Unfunded Pension Liability" means the excess of a Pension Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.

      "Unreimbursed Amount" has the meaning set forth in Section 2.03(c)(i)
hereof.

      "Voting Percentage" means, as to any Lender, (a) at any time when the
Revolving Commitments are in effect, such Lender's Pro Rata Share and (b) at any
time after the termination of the Revolving Commitments, the percentage (carried
out to the ninth decimal place) which (i) the sum of (A) the Outstanding Amount
of such Lender's Revolving Loans, plus (B) such Lender's Pro Rata Share of the
Outstanding Amount of L/C Obligations, plus (C) such Lender's Pro Rata Share of
the Outstanding Amount of Swing Line Loans, then constitutes of (ii) the
Outstanding Amount of all Loans and L/C Obligations; provided, however, that if
any Lender has failed to fund any portion of the Revolving Loans, participations
in L/C Obligations or participations in Swing Line Loans required to be funded
by it hereunder, such Lender's Voting Percentage shall be deemed to be zero, and
the respective Pro Rata Shares and Voting Percentages of the other Lenders shall
be recomputed for purposes of this definition and the definition of "Required
Lenders" without regard to such failing Lender's Revolving Commitment or the
outstanding amount of its Revolving Loans, L/C Advances and funded
participations in Swing Line Loans, as the case may be.

      "Voting Shares" of any Person means any class or classes of Capital Stock
having ordinary voting power for the election of at least a majority of the
members of the Board of Directors (or other governing bodies) of such Person,
other than Capital Stock having such power by reason of the happening of a
contingency.

      "Wells Fargo" means Wells Fargo Bank, National Association.

                                       23



      1.02 OTHER INTERPRETIVE PROVISIONS.

      (a) The meanings of defined terms are equally applicable to the singular
and plural forms of the defined terms.

      (b) (i) The words "herein" and "hereunder" and words of similar import
      when used in any Loan Document shall refer to such Loan Document as a
      whole and not to any particular provision thereof.

            (ii) Unless otherwise specified herein, Article, Section, Exhibit
      and Schedule references are to this Agreement.

            (iii) The term "including" is by way of example and not limitation.

            (iv) The term "documents" includes any and all instruments,
      documents, agreements, certificates, notices, reports, financial
      statements and other writings, however evidenced.

      (c) 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) Section headings herein and the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

      (e) Except as otherwise provided herein, for the calculation of all
covenants and other provisions contained herein, any amounts included in such
calculation which are not Dollars shall be calculated according to its Dollar
Equivalent on the date of such calculation in accordance with GAAP.

      1.03 ACCOUNTING TERMS. All accounting terms not specifically or completely
defined herein shall be construed in conformity with, and all financial data
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.

      1.04 ROUNDING. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).

      1.05 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to agreements (including the Loan Documents) and
other contractual instruments shall be deemed to include all subsequent
amendments, restatements, extensions, supplements and other modifications
thereto, but only to the extent that such amendments, restatements, extensions,
supplements and other modifications are not prohibited by any Loan

                                       24


Document; and (b) references to any Law shall include all statutory and
regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.

                                  ARTICLE II.
                      THE COMMITMENTS AND CREDIT EXTENSIONS

      2.01 REVOLVING LOANS. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make revolving loans (each such loan, a
"Revolving Loan") to the Borrower from time to time on any Business Day during
the period from the Closing Date to the Maturity Date, in an aggregate amount
not to exceed at any time outstanding the amount of such Lender's Revolving
Commitment; provided, however, that after giving effect to any Revolving
Borrowing, (i) the aggregate Outstanding Amount of all Revolving Loans, Swing
Line Loans and L/C Obligations shall not exceed the Aggregate Revolving
Commitments and (ii) the aggregate Outstanding Amount of the Revolving Loans of
any Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all
L/C Obligations, plus such Lender's Pro Rata Share of the Outstanding Amount of
all Swing Line Loans shall not exceed such Lender's Revolving Commitment. Within
the limits of each Lender's Revolving Commitment, and subject to the other terms
and conditions hereof, the Borrower may borrow under this Section 2.01, prepay
under Section 2.05 hereof, and reborrow under this Section 2.01. Revolving Loans
may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

      2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS.

      (a) Each Borrowing, each conversion of Loans from one Type to the other,
and each continuation of Loans as the same Type shall be made upon the
Borrower's irrevocable notice to the Administrative Agent, which may be given by
telephone or electronic mail. Each such notice must be received by the
Administrative Agent not later than 12:00 noon, Dallas, Texas time (i) two
Business Days prior to the requested date of any Borrowing of, conversion to or
continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate
Loans to Base Rate Loans, and (ii) one Business Day prior to the requested date
of any Borrowing of Base Rate Loans. Each such telephonic notice or electronic
mail must be confirmed promptly by delivery to the Administrative Agent of a
written Revolving Loan Notice appropriately completed and signed by a
Responsible Officer of the Borrower. Each Borrowing of, conversion to or
continuation of Eurodollar Rate Loans shall be in a principal amount of
$2,000,000 or a whole multiple of $100,000 in excess thereof. Each Borrowing of
or conversion to Base Rate Loans shall be in a principal amount of $500,000 or a
whole multiple of $100,000 in excess thereof. Each Revolving Loan Notice
(whether telephonic, electronic or written), shall specify (i) whether the
Borrower is requesting a Borrowing, a conversion of Loans from one Type to the
other, or a continuation of Loans as the same Type, (ii) the requested date of
the Borrowing, conversion or continuation, as the case may be (which shall be a
Business Day), (iii) the principal amount of Loans to be borrowed, converted or
continued, (iv) the Type of Loans to be borrowed or to which existing Loans are
to be converted or continued, and (v) if applicable, the duration of the
Interest Period with respect thereto. If the Borrower fails to specify a Type of
Loan in a Revolving Loan Notice or if the Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Revolving Loans
shall be made or continued as, or converted to, Base Rate Loans. Any such
automatic conversion to Base Rate Loans shall be effective as of the last day of
the Interest Period then in effect with respect to the applicable Eurodollar
Rate

                                       25


Loans. If the Borrower requests a Borrowing of, conversion to, or continuation
of Eurodollar Rate Loans in any such Revolving Loan Notice, but fails to specify
an Interest Period, it will be deemed to have specified an Interest Period of
one month.

      (b) Following receipt of a Revolving Loan Notice, the Administrative Agent
shall promptly notify each Lender of its Pro Rata Share of the applicable Loans,
and if no timely notice of a conversion or continuation is provided by the
Borrower, the Administrative Agent shall notify each Lender of the details of
any automatic conversion to Base Rate Loans described in the preceding
subsection. In the case of a Revolving Borrowing, each Lender shall make the
amount of its Loan available to the Administrative Agent in immediately
available funds at the Administrative Agent's Office not later than 2:00 p.m.,
Dallas, Texas time, on the Business Day specified in the applicable Revolving
Loan Notice. Upon satisfaction of the applicable conditions set forth in Section
4.02 hereof (and, if such Borrowing is the initial Credit Extension, Section
4.01 hereof), the Administrative Agent shall make all funds so received
available to the Borrower in like funds as received by the Administrative Agent
either by (i) crediting the account of the Borrower on the books of the
Administrative Agent with the amount of such funds or (ii) wire transfer of such
funds, in each case in accordance with instructions provided to the
Administrative Agent by the Borrower; provided, however, that if, on the date of
the Revolving Borrowing there are Swing Line Loans and/or L/C Borrowings
outstanding, then the proceeds of such Borrowing shall be applied, first, to the
payment in full of any such L/C Borrowings, second, to the payment in full of
any such Swing Line Loans, and third, to the Borrower as provided above.

      (c) Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of the Interest Period for such
Eurodollar Rate Loan. During the existence of a Default or Event of Default, no
Loans may be requested as, converted to or continued as Eurodollar Rate Loans
without the consent of the Required Lenders, and during the existence of an
Event of Default, the Required Lenders may demand that any or all of the then
outstanding Eurodollar Rate Loans be converted immediately to Base Rate Loans.

      (d) The Administrative Agent shall promptly notify the Borrower and the
Lenders of the interest rate applicable to any Eurodollar Rate Loan upon
determination of such interest rate. The determination of the Eurodollar Rate by
the Administrative Agent shall be conclusive in the absence of manifest error.

      (e) After giving effect to all Borrowings, all conversions of Loans from
one Type to the other, and all continuations of Loans as the same Type, there
shall not be more than seven Interest Periods in effect with respect to all
Loans.

      2.03 LETTERS OF CREDIT.

      (a) The Letter of Credit Commitment.

            (i) Subject to the terms and conditions set forth herein, (A) each
      L/C Issuer agrees, in reliance upon the agreements of the other Lenders
      set forth in this Section 2.03, (1) from time to time on any Business Day
      during the period from the Closing Date until the 10th day prior to the
      Maturity Date, to issue Letters of Credit for the account of the

                                       26


      Borrower or its Domestic Subsidiaries, and to amend or renew Letters of
      Credit previously issued by it, in accordance with subsection (b) below,
      and (2) to honor drafts under the Letters of Credit; and (B) the Lenders
      severally agree to participate in Letters of Credit issued (or deemed
      issued in respect of Existing Letters of Credit) for the account of the
      Borrower; provided that no L/C Issuer shall be obligated to make any L/C
      Credit Extension with respect to any Letter of Credit, and no Lender shall
      be obligated to participate in, any Letter of Credit if as of the date of
      such L/C Credit Extension, (x) the Outstanding Amount of all L/C
      Obligations, Swing Line Loans and all Revolving Loans would exceed the
      Aggregate Revolving Commitments, (y) the aggregate Outstanding Amount of
      the Revolving Loans of any Lender, plus such Lender's Pro Rata Share of
      the Outstanding Amount of all L/C Obligations, plus such Lender's Pro Rata
      Share of the Outstanding Amount of all Swing Line Loans would exceed such
      Lender's Revolving Commitment, or (z) the Outstanding Amount of the L/C
      Obligations would exceed the Letter of Credit Sublimit. Within the
      foregoing limits, and subject to the terms and conditions hereof, the
      Borrower's ability to obtain Letters of Credit shall be fully revolving,
      and accordingly the Borrower may, during the foregoing period, obtain
      Letters of Credit to replace Letters of Credit that have expired or that
      have been drawn upon and reimbursed. All Existing Letters of Credit shall
      be deemed to have been issued pursuant hereto, and from and after the
      Closing Date shall be subject to and governed by the terms and conditions
      hereof.

            (ii) No L/C Issuer shall be under any obligation to issue any Letter
      of Credit if:

                  (A) any order, judgment or decree of any Governmental
            Authority or arbitrator shall by its terms purport to enjoin or
            restrain such L/C Issuer from issuing such Letter of Credit, or any
            Law applicable to such L/C Issuer or any request or directive
            (whether or not having the force of law) from any Governmental
            Authority with jurisdiction over such L/C Issuer shall prohibit, or
            request that such L/C Issuer refrain from, the issuance of letters
            of credit generally or such Letter of Credit in particular or shall
            impose upon such L/C Issuer with respect to such Letter of Credit
            any restriction, reserve or capital requirement (for which such L/C
            Issuer is not otherwise compensated hereunder) not in effect on the
            Closing Date, or shall impose upon such L/C Issuer any unreimbursed
            loss, cost or expense which was not applicable on the Closing Date
            and which such L/C Issuer in good faith deems material to it;

                  (B) subject to Section 2.03(b)(iii) hereof, the expiry date of
            such requested Letter of Credit would occur after the Letter of
            Credit Expiration Date, unless all the Lenders have approved such
            expiry date; or

                  (C) such Letter of Credit is to be denominated in a currency
            other than Dollars.

            (iii) No L/C Issuer shall be under any obligation to amend any
      Letter of

                                       27


      Credit if (A) such L/C Issuer would have no obligation at such time to
      issue such Letter of Credit in its amended form under the terms hereof, or
      (B) the beneficiary of such Letter of Credit does not accept the proposed
      amendment to such Letter of Credit.

      (b) Procedures for Issuance and Amendment of Letters of Credit; Evergreen
Letters of Credit.

            (i) Each Letter of Credit shall be issued or amended, as the case
      may be, upon the request of the Borrower delivered to the L/C Issuer of
      such Letter of Credit (with a copy to the Administrative Agent) in the
      form of a Letter of Credit Application, appropriately completed and signed
      by a Responsible Officer of the Borrower. Such L/C Application must be
      received by each such L/C Issuer and the Administrative Agent not later
      than 12:00 noon, Dallas, Texas time, at least three Business Days (or such
      later date and time as such L/C Issuer may agree in a particular instance
      in its sole discretion) prior to the proposed issuance date or date of
      amendment, as the case may be. In the case of a request for an initial
      issuance of a Letter of Credit, such Letter of Credit Application shall
      specify in form and detail satisfactory to such L/C Issuer: (A) the
      proposed issuance date of the requested Letter of Credit (which shall be a
      Business Day); (B) the amount thereof; (C) the expiry date thereof; (D)
      the name and address of the beneficiary thereof; (E) the documents to be
      presented by such beneficiary in case of any drawing thereunder; (F) the
      full text of any certificate to be presented by such beneficiary in case
      of any drawing thereunder; and (G) such other matters as such L/C Issuer
      may require. In the case of a request for an amendment of any outstanding
      Letter of Credit, such Letter of Credit Application shall specify in form
      and detail satisfactory to such L/C Issuer (A) the Letter of Credit to be
      amended; (B) the proposed date of amendment thereof (which shall be a
      Business Day); (C) the nature of the proposed amendment; and (D) such
      other matters as such L/C Issuer may require.

            (ii) Promptly after receipt of any Letter of Credit Application,
      each such L/C Issuer receiving such Letter of Credit Application will
      confirm with the Administrative Agent (by telephone or in writing) that
      the Administrative Agent has received a copy of such Letter of Credit
      Application from the Borrower and, if not, such L/C Issuer will provide
      the Administrative Agent with a copy thereof. Upon receipt by such L/C
      Issuer of confirmation from the Administrative Agent that the requested
      issuance or amendment is permitted in accordance with the terms hereof,
      then, subject to the terms and conditions hereof, such L/C Issuer shall,
      on the requested date, issue a Letter of Credit for the account of the
      Borrower or one of its Subsidiaries or enter into the applicable
      amendment, as the case may be, in each case in accordance with such L/C
      Issuer's usual and customary business practices. Immediately upon the
      issuance of each Letter of Credit, each Lender shall be deemed to, and
      hereby irrevocably and unconditionally agrees to, purchase from the L/C
      Issuer of such Letter of Credit a participation in such Letter of Credit
      in an amount equal to the product of such Lender's Pro Rata Share times
      the amount of such Letter of Credit.

            (iii) If the Borrower so requests in any applicable Letter of Credit
      Application, any L/C Issuer may, in it sole and absolute discretion, agree
      to issue a Letter of Credit that has automatic renewal provisions (each,
      an "Evergreen Letter of Credit"); provided that any such Evergreen Letter
      of Credit must permit such L/C Issuer to prevent any such

                                       28


      renewal at least once in each twelve-month period (commencing with the
      date of issuance of such Letter of Credit) by giving prior notice to the
      beneficiary thereof not later than a day (the "Non-renewal Notice Date")
      in each such twelve-month period to be agreed upon at the time such Letter
      of Credit is issued, such date to be at least forty-five (45) days prior
      to the Letter of Credit Expiration Date of said Letter of Credit. Unless
      otherwise directed by such L/C Issuer, the Borrower shall not be required
      to make a specific request to such L/C Issuer for any such renewal. Once
      an Evergreen Letter of Credit has been issued, the Lenders shall be deemed
      to have authorized (but may not require) such L/C Issuer to permit the
      renewal of such Letter of Credit at any time to a date not later than the
      Letter of Credit Expiration Date; provided, however, that such L/C Issuer
      shall not permit any such renewal if (A) such L/C Issuer would have no
      obligation at such time to issue such Letter of Credit in its renewed form
      under the terms hereof, or (B) it has received notice (which may be by
      telephone, electronic mail or in writing) on or before the Business Day
      immediately preceding the Non-renewal Notice Date from the Administrative
      Agent, any Lender or the Borrower that one or more of the applicable
      conditions specified in Section 4.02 hereof is not then satisfied.

            (iv) Promptly after its delivery of any Letter of Credit or any
      amendment to a Letter of Credit to an advising bank with respect thereto
      or to the beneficiary thereof, the L/C Issuer of such Letter of Credit
      will also deliver to the Borrower and the Administrative Agent a true and
      complete copy of such Letter of Credit or amendment.

      (c) Drawings and Reimbursements; Funding of Participations.

            (i) Upon any drawing under any Letter of Credit, the L/C Issuer of
      such Letter of Credit shall notify the Borrower and the Administrative
      Agent thereof. Promptly after any payment by a L/C Issuer under a Letter
      of Credit (each such date, an "Honor Date"), the Borrower shall reimburse
      such L/C Issuer through the Administrative Agent in an amount equal to the
      amount of such drawing. Notice of a drawing shall be deemed to be a notice
      of the Honor Date. If the Borrower fails to so reimburse such L/C Issuer
      by 10:00 a.m., Dallas, Texas time, on the first Business Day after the
      Honor Date, the Administrative Agent (provided it has been notified of
      such a failure by the L/C Issuer) shall promptly notify each Lender of the
      Honor Date, the amount of the unreimbursed drawing (the "Unreimbursed
      Amount"), and such Lender's Pro Rata Share thereof. In such event, the
      Borrower shall be deemed to have requested a Revolving Borrowing of Base
      Rate Loans to have been disbursed on the Honor Date in an amount equal to
      the Unreimbursed Amount, without regard to the minimum and multiples
      specified in Section 2.02 hereof for the principal amount of Base Rate
      Loans, but subject to the amount of the unutilized portion of the
      Aggregate Revolving Commitments. Any notice given by a L/C Issuer or the
      Administrative Agent pursuant to this Section 2.03(c)(i) may be given by
      telephone if immediately confirmed in writing; provided that the lack of
      such an immediate confirmation shall not affect the conclusiveness or
      binding effect of such notice.

            (ii) Each Lender (including any Lender acting as a L/C Issuer) shall
      upon any notice pursuant to Section 2.03(c)(i) hereof make funds available
      to the Administrative Agent for the account of the L/C Issuer issuing such
      Letter of Credit at the

                                       29


      Administrative Agent's Office in an amount equal to its Pro Rata Share of
      the Unreimbursed Amount not later than 12:00 noon, Dallas, Texas time, on
      the Business Day specified in such notice by the Administrative Agent,
      whereupon, subject to the provisions of Section 2.03(c)(iii) hereof, each
      Lender that so makes funds available shall be deemed to have made a Base
      Rate Loan to the Borrower in such amount. The Administrative Agent shall
      remit the funds so received to such L/C Issuer.

            (iii) With respect to any Unreimbursed Amount that is not fully
      refinanced by a Revolving Borrowing of Base Rate Loans because the
      conditions set forth in Section 4.02 hereof cannot be satisfied or for any
      other reason, the Borrower shall be deemed to have incurred from the L/C
      Issuer issuing such Letter of Credit an L/C Borrowing in the amount of the
      Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall
      be due and payable on demand (together with interest) and shall bear
      interest at the Default Rate. In such event, each Lender's payment to the
      Administrative Agent for the account of such L/C Issuer pursuant to
      Section 2.03(c)(ii) hereof shall be deemed payment in respect of its
      participation in such L/C Borrowing and shall constitute an L/C Advance
      from such Lender in satisfaction of its participation obligation under
      this Section 2.03.

            (iv) Until each Lender funds its Revolving Loan or L/C Advance
      pursuant to this Section 2.03(c) to reimburse a L/C Issuer for any amount
      drawn under any Letter of Credit issued by such L/C Issuer, interest in
      respect of such Lender's Pro Rata Share of such amount shall be solely for
      the account of such L/C Issuer.

            (v) Each Lender's obligation to make Revolving Loans or L/C Advances
      to reimburse each L/C Issuer for amounts drawn under Letters of Credit
      issued by such L/C Issuer, as contemplated by this Section 2.03(c), shall
      be absolute and unconditional and shall not be affected by any
      circumstance, including (A) any set-off, counterclaim, recoupment, defense
      or other right which such Lender may have against any L/C Issuer, the
      Borrower or any other Person for any reason whatsoever; (B) the occurrence
      or continuance of a Default or Event of Default, or (C) any other
      occurrence, event or condition, whether or not similar to any of the
      foregoing. Any such reimbursement shall not relieve or otherwise impair
      the obligation of the Borrower to reimburse each L/C Issuer for the amount
      of any payment made by such L/C Issuer under any Letter of Credit issued
      by such L/C Issuer, together with interest as provided herein.

            (vi) If any Lender fails to make available to the Administrative
      Agent for the account of any L/C Issuer any amount required to be paid by
      such Lender pursuant to the foregoing provisions of this Section 2.03(c)
      by the time specified in Section 2.03(c)(ii) hereof, such L/C Issuer shall
      be entitled to recover from such Lender (acting through the Administrative
      Agent), on demand, such amount with interest thereon for the period from
      the date such payment is required to the date on which such payment is
      immediately available to such L/C Issuer at a rate per annum equal to the
      Federal Funds Rate from time to time in effect. A certificate of any L/C
      Issuer submitted to any Lender (through the Administrative Agent) with
      respect to any amounts owing to such L/C Issuer under this clause (vi)
      shall be conclusive absent manifest error.

                                       30


      (d) Repayment of Participations.

            (i) At any time after any L/C Issuer has made a payment under any
      Letter of Credit and has received from any Lender such Lender's L/C
      Advance in respect of such payment in accordance with Section 2.03(c)
      hereof, if the Administrative Agent receives for the account of such L/C
      Issuer any payment related to such Letter of Credit (whether directly from
      the Borrower or otherwise, including proceeds of Cash Collateral applied
      thereto by the Administrative Agent), or any payment of interest thereon,
      the Administrative Agent will distribute to such Lender its Pro Rata Share
      thereof in the same funds as those received by the Administrative Agent.

            (ii) If any payment received by the Administrative Agent for the
      account of any L/C Issuer pursuant to Section 2.03(c)(i) hereof is
      required to be returned, each Lender shall pay to the Administrative Agent
      for the account of such L/C Issuer its Pro Rata Share thereof on demand of
      the Administrative Agent, plus interest thereon from the date of such
      demand to the date such amount is returned by such Lender, at a rate per
      annum equal to the Federal Funds Rate from time to time in effect.

      (e) Obligations Absolute. The obligation of the Borrower to reimburse each
L/C Issuer for each drawing under each Letter of Credit issued by such L/C
Issuer, and to repay each L/C Borrowing and each drawing under a Letter of
Credit issued by such L/C Issuer that is refinanced by a Borrowing of Revolving
Loans, shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:

            (i) any lack of validity or enforceability of such Letter of Credit,
      this Agreement, or any other agreement or instrument relating thereto;

            (ii) the existence of any claim, counterclaim, set-off, defense or
      other right that the Borrower or any other Loan Party may have at any time
      against any beneficiary or any transferee of such Letter of Credit (or any
      Person for whom any such beneficiary or any such transferee may be
      acting), such L/C Issuer or any other Person, whether in connection with
      this Agreement, the transactions contemplated hereby or by such Letter of
      Credit or any agreement or instrument relating thereto, or any unrelated
      transaction;

            (iii) any draft, demand, certificate or other document presented
      under such 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; or any loss or delay in the transmission or
      otherwise of any document required in order to make a drawing under such
      Letter of Credit;

            (iv) any payment by such L/C Issuer under such Letter of Credit
      against presentation of a draft or certificate that does not strictly
      comply with the terms of such Letter of Credit; or any payment made by
      such L/C Issuer under such Letter of Credit to any Person purporting to be
      a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
      creditors, liquidator, receiver or other representative of or successor to
      any

                                       31


      beneficiary or any transferee of such Letter of Credit, including any
      arising in connection with any proceeding under any Debtor Relief Law; or

            (v) any other circumstance or happening whatsoever, whether or not
      similar to any of the foregoing, including, without limitation, any other
      circumstance that might otherwise constitute a defense available to, or a
      discharge of, the Borrower or any other Loan Party, other than the L/C
      Issuer's gross negligence, bad faith or willful misconduct.

The Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower's instructions or other irregularity, the
Borrower will immediately notify the L/C Issuer of such Letter of Credit. The
Borrower shall be conclusively deemed to have waived any such claim against any
L/C Issuer and its correspondents unless such notice is given as aforesaid.

      (f) Role of a L/C Issuer. Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer issuing such Letter
of Credit shall not have any responsibility to obtain any document (other than
any sight draft, certificates and documents expressly required by such Letter of
Credit) or to ascertain or inquire as to the validity or accuracy of any such
document or the authority of the Person executing or delivering any such
document. No Agent-Related Person nor any of the respective correspondents,
participants or assignees of any L/C Issuer shall be liable to any Lender for
(i) any action taken or omitted in connection herewith at the request or with
the approval of the Lenders or the Required Lenders, as applicable; (ii) any
action taken or omitted in the absence of gross negligence, bad faith or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Letter of Credit Application. The Borrower hereby assumes all risks of the acts
or omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not intended to,
and shall not, preclude the Borrower's pursuing such rights and remedies as it
may have against the beneficiary or transferee at law or under any other
agreement. No Agent-Related Person, nor any of the respective correspondents,
participants or assignees of any L/C Issuer, shall be liable or responsible for
any of the matters described in clauses (i) through (v) of Section 2.03(e)
hereof; provided, however, that anything in such clauses to the contrary
notwithstanding, the Borrower may have a claim against a L/C Issuer, and a L/C
Issuer may be liable to the Borrower, to the extent, but only to the extent, of
any direct, as opposed to consequential or exemplary, damages suffered by the
Borrower which the Borrower proves were caused by such L/C Issuer's willful
misconduct, bad faith or gross negligence or such L/C Issuer's willful failure
to pay under any Letter of Credit issued by such L/C Issuer after the
presentation to it by the beneficiary of a sight draft and certificate(s) and
documents strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing, any L/C Issuer
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and any L/C Issuer shall not be responsible for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit issued by such L/C Issuer 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, except in the case
of gross negligence, bad faith, or willful misconduct on the part of such L/C
Issuer.

                                       32


      (g) Cash Collateral. Upon the occurrence of an Event of Default and demand
by the Administrative Agent pursuant to Section 8.02(c) hereof (except in the
case of an Event of Default specified in Section 8.01(g) or (h) hereof, without
demand or taking of any other action by the Administrative Agent or a Lender)
the Borrower shall immediately Cash Collateralize the then Outstanding Amount of
all L/C Obligations (in an amount equal to such Outstanding Amount).

      (h) Applicability of ISP98 and UCP. Unless otherwise expressly agreed by a
L/C Issuer and the Borrower when a Letter of Credit is issued (including any
such agreement applicable to an Existing Letter of Credit), (i) the rules of the
"International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each Standby Letter of Credit,
and (ii) the rules of the Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce (the "ICC")
at the time of issuance (including the ICC decision published by the Commission
on Banking Technique and Practice on April 6, 1998 regarding the European single
currency (euro)) shall apply to each Commercial Letter of Credit.

      (i) Standby Letter of Credit Fees. The Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with its Pro
Rata Share a Letter of Credit fee for each Standby Letter of Credit on the
actual daily maximum amount available to be drawn under each Standby Letter of
Credit at a per annum percentage equal to the Applicable Rate for Eurodollar
Rate Loans as in effect from time to time. Such fee for each Standby Letter of
Credit shall be due and payable on each Quarterly Date, commencing with the
first Quarterly Date to occur after the issuance of such Standby Letter of
Credit, and ending on the Letter of Credit Expiration Date. If there is any
change in the Applicable Rate during any quarter, the actual daily amount of
each Letter of Credit shall be computed and multiplied by the Applicable Rate
separately for each period during such quarter that such Applicable Rate was in
effect. In addition, the Borrower shall pay directly to each L/C Issuer for its
own account the customary fronting, issuance, presentation, amendment and other
processing fees, and other standard costs and charges, of such L/C Issuer
relating to standby letters of credit issued by it as from time to time in
effect. Such fees and charges are due and payable on demand and are
nonrefundable.

      (j) Commercial Letter of Credit Fees. The Borrower shall pay directly to
the Administrative Agent for the account of each Lender in accordance with its
Pro Rata Share a Letter of Credit fee for each Commercial Letter of Credit,
equal to 1/5 of 1% per annum of the amount of such Commercial Letter of Credit
(but in no event less than $150), due and payable on the issuance thereof. In
addition, the Borrower shall pay directly to each L/C Issuer for its own account
the customary fronting, presentation, amendment and other processing fees, and
other standard costs and charges, of such L/C Issuer relating to commercial
letters of credit issued by it as from time to time in effect. Such fees and
charges are due and payable on demand and are nonrefundable.

      (k) Conflict with Letter of Credit Application. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.

                                       33


      2.04 SWING LINE LOANS.

      (a) The Swing Line. Subject to the terms and conditions set forth herein,
the Swing Line Lender agrees to make loans (each such loan, a "Swing Line Loan")
to the Borrower from time to time on any Business Day during the period from the
Closing Date to the Maturity Date in an aggregate amount not to exceed at any
time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact
that such Swing Line Loans, when aggregated with the Outstanding Amount of
Revolving Loans of the Swing Line Lender in its capacity as a Lender of
Revolving Loans, may exceed the amount of such Lender's Revolving Commitment;
provided, however, that after giving effect to any Swing Line Loan, (i) the
aggregate Outstanding Amount of all Revolving Loans, Swing Line Loans and L/C
Obligations shall not exceed the Aggregate Revolving Commitments and, (ii) the
aggregate Outstanding Amount of the Revolving Loans of any Lender, plus such
Lender's Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus
such Lender's Pro Rata Share of the Outstanding Amount of all Swing Line Loans
shall not exceed such Lender's Revolving Commitment, and provided, that the
Swing Line Lender shall not make any Swing Line Loan to refinance an outstanding
Swing Line Loan. Within the foregoing limits, and subject to the other terms and
conditions hereof, the Borrower may borrow under this Section 2.04, prepay under
Section 2.05 hereof, and reborrow under this Section 2.04. Each Swing Line Loan
shall be a Base Rate Loan. Immediately upon the making of a Swing Line Loan,
each Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the Swing Line Lender a risk participation in such
Swing Line Loan in an amount equal to the product of such Lender's Pro Rata
Share times the amount of such Swing Line Loan.

      (b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the
Borrower's irrevocable notice to the Swing Line Lender and the Administrative
Agent, which may be given by telephone or electronic mail. Each such notice must
be received by the Swing Line Lender and the Administrative Agent not later than
2:00 p.m., Dallas, Texas time, on the requested borrowing date, and shall
specify (i) the amount to be borrowed, which shall be a minimum of $100,000, and
(ii) the requested borrowing date, which shall be a Business Day. Each such
telephonic or electronic notice must be confirmed promptly by delivery to the
Swing Line Lender and the Administrative Agent of a written Swing Line Loan
Notice, appropriately completed and signed by a Responsible Officer of the
Borrower. Promptly after receipt by the Swing Line Lender of any telephonic or
electronically mailed Swing Line Loan Notice, the Swing Line Lender will confirm
with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has also received such Swing Line Loan Notice and, if not,
the Swing Line Lender will notify the Administrative Agent (by telephone or in
writing) of the contents thereof. Unless the Swing Line Lender has received
notice (by telephone or in writing) from the Administrative Agent (including at
the request of any Lender) prior to 3:00 p.m., Dallas, Texas time, on the date
of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to
make such Swing Line Loan as a result of the limitations set forth in the first
proviso to the first sentence of Section 2.04(a) hereof, or (B) that one or more
of the applicable conditions specified in Article IV is not then satisfied,
then, subject to the terms and conditions hereof, the Swing Line Lender will,
not later than 4:00 p.m., Dallas, Texas time, on the borrowing date specified in
such Swing Line Loan Notice, make the amount of its Swing Line Loan available to
the Borrower at its office by crediting the account of the Borrower on the books
of the Swing Line Lender in immediately available funds; provided, however, that
this Section 2.04(b) shall

                                       34


not apply if Swing Line Borrowings are made automatically pursuant to a credit
sweep in accordance with Swing Line Lender's treasury management system, if
available.

      (c) Refinancing of Swing Line Loans.

            (i) The Swing Line Lender at any time in its sole and absolute
      discretion may request, on behalf of the Borrower (which hereby
      irrevocably requests the Swing Line Lender to act on its behalf in
      connection with Swing Line Loans), that each Lender make a Base Rate Loan
      in an amount equal to such Lender's Pro Rata Share of the amount of Swing
      Line Loans then outstanding. Such request shall be made in accordance with
      the requirements of Section 2.02 hereof, without regard to the minimum and
      multiples specified therein for the principal amount of Base Rate Loans,
      but subject to the unutilized portion of the Aggregate Revolving
      Commitments and the conditions set forth in Section 4.02 hereof. The Swing
      Line Lender shall furnish the Borrower with a copy of the applicable Loan
      notice promptly after delivering such notice to the Administrative Agent.
      Each Lender shall make an amount equal to its Pro Rata Share of the amount
      specified in such Loan notice available to the Administrative Agent in
      immediately available funds for the account of the Swing Line Lender at
      the Administrative Agent's Office not later than 12:00 noon, Dallas, Texas
      time, on the day specified in such Loan notice, whereupon, subject to
      Section 2.04(c)(ii) hereof, each Lender that so makes funds available
      shall be deemed to have made a Base Rate Loan to the Borrower in such
      amount. The Administrative Agent shall remit the funds so received to the
      Swing Line Lender.

            (ii) If for any reason any Revolving Borrowing cannot be requested
      in accordance with Section 2.04(c)(i) hereof or any Swing Line Loan cannot
      be refinanced by such a Revolving Borrowing, the Revolving Loan Notice
      submitted by the Swing Line Lender shall be deemed to be a request by the
      Swing Line Lender that each of the Lenders fund its participation in the
      relevant Swing Line Loan and each Lender's payment to the Administrative
      Agent for the account of the Swing Line Lender pursuant to Section
      2.04(c)(i) hereof shall be deemed payment in respect of such
      participation.

            (iii) If any Lender fails to make available to the Administrative
      Agent for the account of the Swing Line Lender any amount required to be
      paid by such Lender pursuant to the foregoing provisions of this Section
      2.04(c) by the time specified in Section 2.04(c)(i) hereof, the Swing Line
      Lender shall be entitled to recover from such Lender (acting through the
      Administrative Agent), on demand, such amount with interest thereon for
      the period from the date such payment is required to the date on which
      such payment is immediately available to the Swing Line Lender at a rate
      per annum equal to the Federal Funds Rate from time to time in effect. A
      certificate of the Swing Line Lender submitted to any Lender (through the
      Administrative Agent) with respect to any amounts owing under this clause
      (iii) shall be conclusive absent manifest error.

            (iv) Each Lender's obligation to make Revolving Loans or to purchase
      and fund participations in Swing Line Loans pursuant to this Section
      2.04(c) shall be absolute and unconditional and shall not be affected by
      any circumstance, including (A) any set-off, counterclaim, recoupment,
      defense or other right which such Lender may have

                                       35


      against the Swing Line Lender, the Borrower or any other Person for any
      reason whatsoever, (B) the occurrence or continuance of a Default or Event
      of Default, or (C) any other occurrence, event or condition, whether or
      not similar to any of the foregoing. Any such purchase of participations
      shall not relieve or otherwise impair the obligation of the Borrower to
      repay Swing Line Loans, together with interest as provided herein.

      (d) Repayment of Participations.

            (i) At any time after any Lender has purchased and funded a
      participation in a Swing Line Loan, if the Swing Line Lender receives any
      payment on account of such Swing Line Loan, the Swing Line Lender will
      distribute to such Lender its Pro Rata Share of such payment
      (appropriately adjusted, in the case of interest payments, to reflect the
      period of time during which such Lender's participation was outstanding
      and funded) in the same funds as those received by the Swing Line Lender.

            (ii) If any payment received by the Swing Line Lender in respect of
      principal or interest on any Swing Line Loan is required to be returned by
      the Swing Line Lender, each Lender shall pay to the Swing Line Lender its
      Pro Rata Share thereof on demand of the Administrative Agent, plus
      interest thereon from the date of such demand to the date such amount is
      returned, at a rate per annum equal to the Federal Funds Rate. The
      Administrative Agent will make such demand upon the request of the Swing
      Line Lender.

      (e) Interest for Account of Swing Line Lender. The Swing Line Lender shall
be responsible for invoicing the Borrower for interest on the Swing Line Loans.
Until each Lender funds its Base Rate Loan or participation pursuant to this
Section 2.04 to refinance such Lender's Pro Rata Share of any Swing Line Loan,
interest in respect of such Pro Rata Share shall be solely for the account of
the Swing Line Lender.

      (f) Payments Directly to Swing Line Lender. The Borrower shall make all
payments of principal and interest in respect of the Swing Line Loans directly
to the Swing Line Lender.

      2.05 PREPAYMENTS.

      (a) The Borrower may, upon notice to the Administrative Agent, at any time
or from time to time voluntarily prepay Revolving Loans in whole or in part
without premium or penalty; provided that (i) such notice must be received by
the Administrative Agent not later than 12:00 noon, Dallas, Texas time, (A) two
Business Days prior to any date of prepayment of Eurodollar Rate Loans, and (B)
one Business Day prior to the date of prepayment of Base Rate Loans; (ii) any
prepayment of Eurodollar Rate Loans shall be in a principal amount of $2,000,000
or a whole multiple of $500,000 in excess thereof; and (iii) any prepayment of
Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple
of $100,000 in excess thereof. Each such notice shall specify the date and
amount of such prepayment and the Type(s) of Loans to be prepaid. The
Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of such Lender's Pro Rata Share of such prepayment. If such
notice is given by the Borrower, the Borrower shall make such prepayment and the
payment

                                       36


amount specified in such notice shall be due and payable on the date specified
therein. Any voluntary or mandatory prepayment of a Eurodollar Rate Loan shall
be accompanied by all accrued interest thereon, together with any additional
amounts required pursuant to Section 3.05 hereof. Each such prepayment shall be
applied to the Revolving Loans of the Lenders in accordance with their
respective Pro Rata Shares. Any mandatory prepayment required pursuant to
Section 2.05(c) or (d) hereof shall not be subject to any notice or minimum
payment provisions of this Section 2.05(a).

      (b) The Borrower may, upon notice to the Swing Line Lender (with a copy to
the Administrative Agent), at any time or from time to time, voluntarily prepay
Swing Line Loans in whole or in part without premium or penalty; provided that
(i) such notice must be received by the Swing Line Lender and the Administrative
Agent not later than 2:00 p.m., Dallas, Texas time, on the date of the
prepayment, and (ii) any such prepayment shall be in a minimum principal amount
of $100,000. Each such notice shall specify the date and amount of such
prepayment. If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein.

      (c) If for any reason the Outstanding Amount of all Revolving Loans, Swing
Line Loans and L/C Obligations at any time exceeds the Aggregate Revolving
Commitments then in effect, the Borrower shall immediately prepay Revolving
Loans, Swing Line Loans and/or Cash Collateralize the L/C Obligations in an
aggregate amount equal to such excess.

      (d) Within 10 Business Days of the receipt of Net Proceeds from the
Disposition by the Borrower or any of its Subsidiaries of any Assets other than
any Dispositions permitted under clauses (a) through (e) of Section 7.05 hereof,
and clause (f) of Section 7.05 hereof to the extent that a prepayment under this
Section 2.05(d) is not required, the Borrower shall prepay Revolving Loans in an
aggregate principal amount equal to 50% of such Net Proceeds. Each such
mandatory prepayment shall be made and applied as provided in Section 2.06(c)
hereof.

      2.06 REDUCTION OR TERMINATION OF REVOLVING COMMITMENTS.

      (a) The Borrower may, upon notice to the Administrative Agent, terminate
the Aggregate Revolving Commitments, or permanently reduce the Aggregate
Revolving Commitments to an amount not less than the then Outstanding Amount of
all Revolving Loans, Swing Line Loans and L/C Obligations; provided that (i) any
such notice shall be received by the Administrative Agent not later than 11:00
a.m., five Business Days prior to the date of termination or reduction, (ii) any
such partial reduction shall be in an aggregate amount of $5,000,000 or any
whole multiple of $1,000,000 in excess thereof, and (iii) if, after giving
effect to any reduction of the Aggregate Revolving Commitments, the Letter of
Credit Sublimit or the Swing Line Sublimit exceeds the amount of the Aggregate
Revolving Commitments, such Sublimit shall be automatically reduced by the
amount of such excess. The Administrative Agent shall promptly notify the
Lenders of any such notice of reduction or termination of the Aggregate
Revolving Commitments.

                                       37


      (b) The Aggregate Revolving Commitments shall also be permanently reduced
by the amount of Revolving Loans required to be prepaid (whether or not any
Revolving Loans are then outstanding) pursuant to Section 2.05(d) hereof.

      (c) Any reduction of the Aggregate Revolving Commitments shall be applied
to the Revolving Commitment of each Lender according to its Pro Rata Share. All
fees accrued until the effective date of any termination of the Aggregate
Revolving Commitments shall be paid on the effective date of such termination.
Once reduced in accordance with this Section, the Aggregate Revolving
Commitments may not be increased except pursuant to Section 2.14.

      2.07 REPAYMENT OF LOANS.

      (a) The Borrower shall repay to the Lenders on the Maturity Date the
aggregate principal amount of Revolving Loans outstanding on such date.

      (b) The Borrower shall repay each Swing Line Loan on the earlier to occur
of (i) the date ten days after such Swing Line Loan is made and (ii) the
Maturity Date.

      2.08 INTEREST.

      (a) Subject to the provisions of subsection (b) below, (i) each Eurodollar
Rate Loan shall bear interest on the outstanding principal amount thereof for
each Interest Period at a rate per annum equal to the lesser of (y) the Highest
Lawful Rate or (z) the Eurodollar Rate for such Interest Period plus the
Applicable Rate for Eurodollar Rate Loans; and (ii) each Base Rate Loan
(including each Swing Line Loan) shall bear interest on the outstanding
principal amount thereof from the applicable borrowing date at a rate per annum
equal to the lesser of (y) the Highest Lawful Rate or (z) the Base Rate plus the
Applicable Rate for Base Rate Loans.

      (b) Upon the request of the Required Lenders, while any Event of Default
exists or after acceleration, the Borrower shall pay interest on the principal
amount of all outstanding Obligations at a fluctuating interest rate per annum
at all times equal to the lesser of (y) the Highest Lawful Rate or (z) the
Default Rate, to the fullest extent permitted by Applicable Law. Accrued and
unpaid interest on past due amounts (including interest on past due interest)
shall be due and payable upon demand.

      (c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.

      2.09 FEES. In addition to certain fees described in subsections (i) and
(j) of Section 2.03:

      (a) Commitment Fee. The Borrower shall pay to the Administrative Agent for
the account of each Lender in accordance with its Pro Rata Share, a per annum
Commitment Fee (herein so called) equal to the Applicable Rate for Commitment
Fees times the actual daily amount by which the Aggregate Revolving Commitments
exceed the sum of (i) the Outstanding

                                       38


Amount of Revolving Loans, (ii) the Outstanding Amount of Swing Line Loans and
(iii) the Outstanding Amount of L/C Obligations. The Commitment Fee shall accrue
at all times from the Closing Date until the Maturity Date and shall be due and
payable quarterly in arrears on each Quarterly Date, commencing with the first
Quarterly Date to occur after the Closing Date, and on the Maturity Date. The
Commitment Fee shall be calculated quarterly in arrears and shall accrue at all
times, including at any time during which one or more of the conditions in
Article IV is not met.

      (b) Agent Fee Letter. The Borrower shall pay to (i) the Administrative
Agent for the Administrative Agent's own account, the fees in the amounts and at
the times specified in the letter agreement, dated December 23, 2004 between the
Borrower and Wells Fargo, (ii) JPMorgan Chase Bank, N.A., for its own account,
the fees in the amounts and at the times specified in the letter agreement,
dated December 23, 2004, between the Borrower and JPMorgan Chase Bank, N.A.
(collectively, the "Agent Fee Letters"). Such fees shall be fully earned when
paid and shall be nonrefundable for any reason whatsoever.

      2.10 COMPUTATION OF INTEREST AND FEES. Subject to Section 10.10 hereof,
computation of interest on Eurodollar Rate Loans shall be calculated on the
basis of a year of 360 days and the actual number of days elapsed. Computation
of all other types of interest and all fees shall be calculated on the basis of
a year of 365 or 366 days, as the case may be, and the actual number of days
elapsed. Interest shall accrue on each Loan for the day on which the Loan is
made, and shall not accrue on a Loan, or any portion thereof, for the day on
which the Loan or such portion is paid, provided that any Loan that is repaid on
the same day on which it is made shall bear interest for one day.

      2.11 EVIDENCE OF DEBT.

      (a) The Credit Extensions made by each Lender shall be evidenced by one or
more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained by
the Administrative Agent and each Lender shall be conclusive absent manifest
error of the amount of the Credit Extensions made by the Lenders to the Borrower
and the interest and payments thereon. Any failure so to record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Loans and L/C
Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of such Lender shall
control. Upon the request of any Lender made through the Administrative Agent,
such Lender's Loans may be evidenced by a Revolving Loan Note and/or a Swing
Line Note, as applicable, in addition to such accounts or records. Each Lender
may attach schedules to its Note(s) and endorse thereon the date, Type (if
applicable), amount and maturity of the applicable Loans and payments with
respect thereto.

      (b) In addition to the accounts and records referred to in subsection (a),
each Lender and the Administrative Agent shall maintain in accordance with its
usual practice accounts or records evidencing the purchases and sales by such
Lender of participations in Letters of Credit and Swing Line Loans. In the event
of any conflict between the accounts and records maintained

                                       39


by the Administrative Agent and the accounts and records of any Lender in
respect of such matters, the accounts and records of the Administrative Agent
shall control.

      2.12 PAYMENTS GENERALLY.

      (a) All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent's
Office in Dollars and in immediately available funds not later than 2:00 p.m.,
Dallas, Texas time, on the date specified herein. The Administrative Agent will
promptly, and in any event within the same business day, distribute to each
Lender its Pro Rata Share (or other applicable share as provided herein) of such
payment in like funds as received by wire transfer to such Lender's Lending
Office. All payments received by the Administrative Agent after 2:00 p.m.,
Dallas, Texas time, shall be deemed received on the next succeeding Business Day
and any applicable interest or fee shall continue to accrue. The Borrower
authorizes the Administrative Agent to charge the account of the Borrower
maintained with Wells Fargo (as of the Closing Date, such account is number
#4761053503) for each payment of principal, interest and fees as it becomes due
hereunder.

      (b) Subject to the definition of "Interest Period," if any payment to be
made by the Borrower shall come due on a day other than a Business Day, payment
shall be made on the next following Business Day, and such extension of time
shall be reflected in computing interest or fees, as the case may be.

      (c) If, at any time after an Event of Default (but prior to (A) the
exercise of remedies provided for in Section 8.02 or (B) the Loans becoming
automatically due and payable and the L/C Obligations becoming automatically
required to be cash collateralized as set forth in the proviso to Section 8.02),
insufficient funds under this Agreement are received by and available to the
Administrative Agent to pay fully all amounts of principal, L/C Borrowings,
interest and fees then due hereunder, such funds shall be applied (i) first,
toward costs and expenses (including Attorney Costs and amounts payable under
Article III) incurred by the Administrative Agent and each Lender in respect of
this Agreement, (ii) second, toward repayment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (iii) third, toward
repayment of principal and L/C Borrowings then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of principal and L/C
Borrowings then due to such parties.

      (d) Unless the Borrower or any Lender has notified the Administrative
Agent prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that the
Borrower or such Lender, as the case may be, has timely made such payment and
may (but shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the extent that
such payment was not in fact made to the Administrative Agent in immediately
available funds, then:

                                       40


            (i) if the Borrower failed to make such payment, each Lender shall
      forthwith on demand repay to the Administrative Agent the portion of such
      assumed payment that was made available to such Lender in immediately
      available funds, together with interest thereon in respect of each day
      from and including the date such amount was made available by the
      Administrative Agent to such Lender to the date such amount is repaid to
      the Administrative Agent in immediately available funds, at the Federal
      Funds Rate from time to time in effect; and

            (ii) if any Lender failed to make such payment, such Lender shall
      forthwith on demand pay to the Administrative Agent the amount thereof in
      immediately available funds, together with interest thereon for the period
      from the date such amount was made available by the Administrative Agent
      to the Borrower to the date such amount is recovered by the Administrative
      Agent (the "Compensation Period") at a rate per annum equal to the Federal
      Funds Rate from time to time in effect. If such Lender pays such amount to
      the Administrative Agent, then such amount shall constitute such Lender's
      Revolving Loan included in the applicable Borrowing. If such Lender does
      not pay such amount forthwith upon the Administrative Agent's demand
      therefore, the Administrative Agent may make a demand therefore upon the
      Borrower, and the Borrower shall pay such amount to the Administrative
      Agent, together with interest thereon for the Compensation Period at a
      rate per annum equal to the rate of interest applicable to the applicable
      Borrowing. Nothing herein shall be deemed to relieve any Lender from its
      obligation to fulfill its Revolving Commitment or to prejudice any rights
      which the Administrative Agent or the Borrower may have against any Lender
      as a result of any default by such Lender hereunder.

A notice of the Administrative Agent to any Lender with respect to any amount
owing under this subsection (d) shall be conclusive, absent manifest error.

      (e) If any Lender makes available to the Administrative Agent funds for
any Loan to be made by such Lender as provided in the foregoing provisions of
this Article II, and the conditions to the applicable Credit Extension set forth
in Article IV are not satisfied or waived in accordance with the terms hereof,
the Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.

      (f) The obligations of the Lenders hereunder to make Loans and to fund
participations in Letters of Credit and Swing Line Loans are several and not
joint. The failure of any Lender to make any Loan or to fund any such
participation on any date required hereunder shall not relieve any other Lender
of its corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Revolving Loan or
purchase its participation.

      (g) Nothing herein shall be deemed to obligate any Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

      2.13 SHARING OF PAYMENTS. If, other than as expressly provided elsewhere
herein, any Lender shall obtain on account of any Loans made by it, or the
participations in L/C Obligations

                                       41


or in Swing Line Loans held by it, any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) in excess of its
ratable share (or other share contemplated hereunder) thereof, such Lender shall
immediately (a) notify the Administrative Agent of such fact, and (b) purchase
from the other Lenders such participations in the Loans made by them and/or such
subparticipations in the participations in L/C Obligations or Swing Line Loans
held by them, as the case may be, as shall be necessary to cause such purchasing
Lender to share the excess payment in respect of such Loan or such
participations, as the case may be, pro rata with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Lender, such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefore, together with an amount equal to such paying
Lender's ratable share (according to the proportion of (i) the amount of such
paying Lender's required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 10.09 hereof with
respect to such participation) as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation. The Administrative
Agent will keep records (which shall be conclusive and binding in the absence of
manifest error) of participations purchased under this Section and will in each
case notify the Lenders following any such purchases or repayments. Each Lender
that purchases a participation pursuant to this Section shall from and after
such purchase have the right to give all notices, requests, demands, directions
and other communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.

                                  ARTICLE III.
                     TAXES, YIELD PROTECTION AND ILLEGALITY

      3.01 TAXES.

      (a) Any and all payments by the Borrower to or for the account of the
Administrative Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case of the
Administrative Agent and each Lender, taxes imposed on or measured by its net
income, and franchise taxes imposed on it by the jurisdiction (or any political
subdivision thereof) under the Laws of which the Administrative Agent or such
Lender, as the case may be, is organized or maintains a lending office or any
other jurisdictions in which the Administrative Agent or such Lender transacts
business (all such non-excluded taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by any
Laws to deduct any Taxes from or in respect of any sum payable under any Loan
Document to the Administrative Agent or any Lender, (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section), the
Administrative Agent and such Lender receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions,

                                       42


(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable Laws, and (iv) within
30 days after the date of such payment, the Borrower shall furnish to the
Administrative Agent (which shall forward the same to such Lender) the original
or a certified copy of a receipt evidencing payment thereof.

      (b) In addition, the Borrower agrees to pay any and all present or future
stamp, court or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "Other Taxes").

      (c) If the Borrower shall be required to deduct or pay any Taxes or Other
Taxes from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, the Borrower shall also pay to the
Administrative Agent (for the account of such Lender) or to such Lender, at the
time interest on the Obligations is paid, such additional amount that such
Lender specifies as reasonably necessary to preserve the after-tax yield (after
factoring in all taxes, including taxes imposed on or measured by net income)
such Lender would have received if such Taxes or Other Taxes had not been
imposed, with the computation of such additional amount to be set forth in
writing, certified by such Lender, and delivered to the Borrower.

      (d) The Borrower agrees to indemnify the Administrative Agent and each
Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by the Administrative Agent and such Lender, (ii) amounts
payable under Section 3.01(c) hereof and (iii) any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto, in
each case whether or not such Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. Payment under this
subsection (d) shall be made within 30 days after the date the Lender or the
Administrative Agent makes a demand therefore.

      (e) Each Lender (and the Administrative Agent with respect to payments to
the Administrative Agent for its own account) agrees that (i) it will take all
reasonable actions by all usual means to maintain all exemptions, if any,
available to it from United States withholding taxes (whether available by
treaty, existing administrative waiver, or by virtue of the location of any
Lender's Lending Office) and (ii) otherwise cooperate with the Borrower to
minimize amounts payable by the Borrower under this Section 3.01; provided,
however, the Lenders and the Administrative Agent shall not be obligated by
reason of this Section 3.01(e) to contest the payment of any Taxes or Other
Taxes or to disclose any information regarding its tax affairs or tax
computation or reorder its tax or other affairs or tax or other planning.
Subject to the foregoing, to the extent the Borrower pays sums pursuant to this
Section 3.01 and the Lender or the Administrative Agent receives a refund of any
or all of such sums, such refund shall be applied to reduce any amounts then due
and owing under this Agreement or, to the extent that no amounts are due and
owing under this Agreement at the time such refunds are received, the party
receiving such refund shall promptly pay over all such refunded sums to the
Borrower, provided no Default or Event of Default is in existence at such time.

                                       43


      3.02 ILLEGALITY. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or materially restricts the authority of such Lender to
purchase or sell, or to take deposits of, Dollars in the applicable offshore
Dollar market, or to determine or charge interest rates based upon the
Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans
shall be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, with the computation of such additional
amount to be set forth in writing, certified by such Lender, and delivered to
the Borrower, the Borrower shall, upon demand from such Lender (with a copy to
the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate
Loans of such Lender to Base Rate Loans, either on the last day of the Interest
Period thereof, if such Lender may lawfully continue to maintain such Eurodollar
Rate Loans to such day, or immediately, if such Lender may not lawfully continue
to maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion,
the Borrower shall also pay interest then accrued on the amount so prepaid or
converted. Each Lender agrees to designate a different Lending Office if such
designation will avoid the need for such notice and will not, in the good faith
judgment of such Lender, otherwise be materially disadvantageous to such Lender.

      3.03 INABILITY TO DETERMINE RATES. If the Administrative Agent determines
in connection with any request for a Eurodollar Rate Loan or a conversion to or
continuation thereof that (a) Dollar deposits are not being offered to banks in
the applicable offshore Dollar market for the applicable amount and Interest
Period of such Eurodollar Rate Loan, (b) adequate and reasonable means do not
exist for determining the Eurodollar Rate for such Eurodollar Rate Loan, or (c)
the Eurodollar Rate for such Eurodollar Rate Loan does not adequately and fairly
reflect the cost to the Lenders of funding such Eurodollar Rate Loan, the
Administrative Agent will promptly notify the Borrower and all Lenders.
Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate
Loans shall be suspended until the Administrative Agent revokes such notice.
Upon receipt of such notice, the Borrower may revoke any pending request for a
Revolving Borrowing, conversion or continuation of Eurodollar Rate Loans or,
failing that, will be deemed to have converted such request into a request for a
Revolving Borrowing of Base Rate Loans in the amount specified therein, provided
that the Borrower shall not be liable for any Consequential Loss in connection
with any such deemed conversion.

      3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY; RESERVES ON
EURODOLLAR RATE LOANS.

      (a) If any Lender determines that as a result of the introduction of or
any change in or in the interpretation of any Law, or such Lender's compliance
therewith, there shall be any increase in the cost to such Lender of agreeing to
make or making, funding or maintaining Eurodollar Rate Loans or (as the case may
be) issuing or participating in Letters of Credit, or a reduction in the amount
received or receivable by such Lender in connection with any of the foregoing
(excluding for purposes of this subsection (a) any such increased costs or
reduction in amount resulting from (i) Taxes or Other Taxes (as to which Section
3.01 hereof shall govern), (ii) changes in the basis of taxation of overall net
income or overall gross income by the United

                                       44


States or any foreign jurisdiction or any political subdivision of either
thereof under the Laws of which such Lender is organized or has its Lending
Office, and (iii) reserve requirements contemplated by Section 3.04(c) hereof),
then from time to time upon demand of such Lender (with a copy of such demand to
the Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for such increased cost or reduction,
with the computation of such additional amount to be set forth in writing,
certified by such Lender, and delivered to the Borrower. The affected Lender
will as soon as practicable notify the Borrower of any event of which it has
knowledge, occurring after the date hereof, which will entitle such Lender to
compensation pursuant to this Section and designate a different Lending Office
if such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the good faith judgment of such Lender, be
materially disadvantageous to such Lender.

      (b) If any Lender determines that the introduction of any Law regarding
capital adequacy or any change therein or in the interpretation thereof, or
compliance by such Lender (or its Lending Office) therewith, has the effect of
reducing the rate of return on the capital of such Lender or any corporation
controlling such Lender with respect to this Agreement as a consequence of such
Lender's obligations hereunder (taking into consideration its policies with
respect to capital adequacy and such Lender's desired return on capital), then
from time to time upon demand of such Lender, with the computation of such
additional amount to be set forth in writing, certified by such Lender, and
delivered to the Borrower (with a copy of such demand to the Administrative
Agent), the Borrower shall pay to such Lender such additional amounts as will
compensate such Lender for such reduction.

      (c) The Borrower shall pay to each Lender, as long as such Lender shall be
required under regulations of the Board to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as "Eurocurrency liabilities"), additional costs on the unpaid
principal amount of each Eurodollar Rate Loan equal to the actual costs of such
reserves allocated to such Loan by such Lender (as determined by such Lender in
good faith, which determination shall be controlling, in absence of error),
which shall be due and payable on each date on which interest is payable on such
Loan, provided the Borrower shall have received at least 15 days' prior notice
(with a copy to the Administrative Agent) of such additional interest from such
Lender, with the computation of such additional amount to be set forth in
writing, certified by such Lender, and delivered to the Borrower. If a Lender
fails to give notice 15 days prior to the relevant Interest Payment Date, such
additional interest shall be due and payable 15 days from receipt of such
notice.

      (d) Notwithstanding anything to the contrary in this Section 3.04, the
Borrower shall not be liable with respect to any amounts that were incurred or
accrued more than (90) days prior to the date of the sending of the notice to
the Borrower under subsection (a), (b) or (c) of this Section 3.04, as the case
may be.

      3.05 FUNDING LOSSES. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for the Consequential Loss incurred by it as a result of:

                                       45


      (a) any continuation, conversion, payment or prepayment of any Eurodollar
Rate Loan on a day other than the last day of the Interest Period for such
Eurodollar Rate Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);

      (b) any failure by the Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any
Eurodollar Rate Loan on the date or in the amount notified by the Borrower; or

      (c) any assignment of a Eurodollar Rate Loan on a day other than the last
day of the Interest Period therefore as a result of a request by the Borrower
pursuant to Section 10.16 hereof.

For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the applicable offshore Dollar interbank market for a
comparable amount and for a comparable period, whether or not such Eurodollar
Rate Loan was in fact so funded.

      3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.

      (a) A certificate of the Administrative Agent or any Lender claiming
compensation under this Article III and setting forth the additional amount or
amounts to be paid to it hereunder and the detailed computation of such amount
or amounts shall be conclusive in the absence of manifest error. In determining
such amount, the Administrative Agent or such Lender may use any reasonable
averaging and attribution methods.

      (b) Upon any Lender's making a claim for compensation under Section 3.01,
3.02 or 3.04 hereof, the Borrower may remove or replace such Lender in
accordance with Section 10.16 hereof.

      3.07 SURVIVAL. All of the Borrower's obligations under this Article III
shall survive termination of the Revolving Commitments and payment in full of
all the other Obligations.

                                  ARTICLE IV.
                    CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

      4.01 CONDITIONS OF INITIAL CREDIT EXTENSION. The obligation of each Lender
to make its initial Credit Extension hereunder is subject to satisfaction of the
following conditions precedent:

      (a) Unless waived by all the Lenders (or by the Administrative Agent with
respect to immaterial matters or items specified in clause (v) or (vi) below
with respect to which the Borrower has given assurances satisfactory to the
Administrative Agent that such items shall be delivered promptly following the
Closing Date), the Administrative Agent's receipt of the following, each of
which shall be originals or facsimiles (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, each dated the Closing Date (or, in the case of certificates
of governmental officials, a recent date

                                       46


before the Closing Date) and each in form and substance reasonably satisfactory
to the Administrative Agent and its legal counsel:

            (i) executed counterparts of this Agreement and the Guaranty,
      sufficient in number for distribution to the Administrative Agent, each
      Lender and the Borrower;

            (ii) Revolving Loan Notes executed by the Borrower in favor of each
      Lender, each in a principal amount equal to such Lender's Revolving
      Commitment;

            (iii) a Swing Line Note executed by the Borrower in favor of the
      Swing Line Lender in the principal amount of the Swing Line Sublimit;

            (iv) such certificates of resolutions or other action, incumbency
      certificates and/or other certificates of Responsible Officers of each
      Loan Party as the Administrative Agent may require to establish the
      identities of and verify the authority and capacity of each Responsible
      Officer thereof authorized to act as a Responsible Officer in connection
      with this Agreement and the other Loan Documents to which such Loan Party
      is a party;

            (v) such evidence as the Administrative Agent may reasonably require
      to verify that each Loan Party is duly organized or formed, validly
      existing, in good standing and qualified to engage in business in each
      jurisdiction in which it is required to be qualified to engage in
      business, including certified copies of each Loan Party's Organization
      Documents, certificates of good standing and/or qualification to engage in
      business and tax clearance certificates;

            (vi) a certificate signed by a Responsible Officer of the Borrower
      certifying (A) that the conditions specified in Sections 4.02(a) and (b)
      hereof have been satisfied, and (B) that there has been no event or
      circumstance since the date of the Audited Financial Statements which has
      or could be reasonably expected to have a Material Adverse Effect;

            (vii) opinions of counsel to each Loan Party in form and substance
      reasonably satisfactory to the Administrative Agent;

            (viii) evidence that any Indebtedness not otherwise permitted
      hereunder has been or concurrently with the Closing Date is being
      terminated and all obligations thereunder have been or concurrently with
      the Closing Date are being paid in full;

            (ix) the Officer's Certificate executed by the chief executive
      officer of the Borrower; and

            (x) such other assurances, certificates, documents, consents or
      opinions as the Administrative Agent, each L/C Issuer, the Swing Line
      Lender or the Required Lenders reasonably may require.

     (b) All fees under the Agent Fee Letters required to be paid on or before
the Closing Date shall have been paid.

                                       47


     (c) Unless waived by the Administrative Agent, the Borrower shall have paid
all Attorney Costs of the Administrative Agent to the extent invoiced at least
two days prior to the Closing Date, plus such additional amounts of Attorney
Costs as shall constitute its reasonable estimate of Attorney Costs incurred or
to be incurred by it through the closing proceedings (provided that such
estimate shall not thereafter preclude a final settling of accounts between the
Borrower and the Administrative Agent).

      4.02 CONDITIONS TO ALL CREDIT EXTENSIONS AND CONVERSIONS AND
CONTINUATIONS. The obligation of each Lender to honor any Request for Credit
Extension is subject to the following conditions precedent:

      (a) The representations and warranties of the Borrower contained in
Article V, or which are contained in any document furnished at any time under or
in connection herewith, shall be true and correct on and as of the date of such
Credit Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date, and except for purposes of this Section 4.02,
the representations and warranties contained in subsections (a) and (b) of
Section 5.05 hereof shall be deemed to refer to the most recent financial
statements furnished pursuant to clauses (a) and (b), respectively, of Section
6.01 hereof.

      (b) No Default or Event of Default shall exist, or would result from such
proposed Credit Extension.

      (c) After giving effect to any Request for Credit Extension, the aggregate
amount of outstanding Indebtedness of the Borrower and its Subsidiaries is
permitted under the Note Agreements.

      (d) The Administrative Agent and, if applicable, a L/C Issuer or the Swing
Line Lender shall have received a Request for Credit Extension in accordance
with the requirements hereof.

Each Request for Credit Extension submitted by the Borrower shall be deemed to
be a representation and warranty that the conditions specified in Sections
4.02(a) and (b) hereof have been satisfied on and as of the date of the
applicable Credit Extension.

                                   ARTICLE V.
                         REPRESENTATIONS AND WARRANTIES

     The Borrower represents and warrants to the Administrative Agent and the
Lenders that:

      5.01 EXISTENCE, QUALIFICATION AND POWER; COMPLIANCE WITH LAWS. Each Loan
Party (a) is a corporation, partnership or limited liability company duly
organized or formed, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation or organization, (b) has all requisite power
and authority and all governmental licenses, authorizations, consents and
approvals necessary to (i) own its assets, carry on its business and (ii)
execute, deliver, and perform its obligations under the Loan Documents to which
it is a party, (c) is duly qualified and is licensed and in good standing under
the Laws of each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such

                                       48


qualification or license, and (d) is in compliance with all Laws (including,
without limitation, all federal and state registrations required by any
anti-money laundering Laws), except in each case referred to in clause (b)(i),
(c) or this clause (d), to the extent that failure to do so could not reasonably
be expected to have a Material Adverse Effect.

      5.02 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is
party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person's Organization Documents; (b) materially conflict with or result
in any breach or contravention of, or the creation of any Lien under, any
material Contractual Obligation to which such Person is a party or any order,
injunction, writ or decree of any Governmental Authority to which such Person or
its property is subject; or (c) violate any Law.

      5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, any Loan Party of
this Agreement or any other Loan Document.

      5.04 BINDING EFFECT. This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been duly executed and delivered
by each Loan Party that is party thereto. This Agreement constitutes, and each
other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms, subject as to enforcement of
remedies to (a) any Debtor Relief Laws and (b) general principles of equity,
whether applied by a court of law or equity.

      5.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.

      (a) The Audited Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of the Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of the Borrower and its Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and Indebtedness
in accordance with GAAP consistently applied throughout the period covered
thereby.

      (b) Since the date of the Audited Financial Statements, there has been no
event or circumstance that has or could reasonably be expected to have a
Material Adverse Effect.

      5.06 LITIGATION. There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of the Borrower, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, by or against the Borrower or any of its Subsidiaries or against any
of their properties or revenues which (a) purport to affect or pertain to this

                                       49


Agreement or any other Loan Document, or any of the transactions contemplated
hereby, or (b) individually or collectively, could reasonably be expected to
have a Material Adverse Effect.

      5.07 NO DEFAULT. Neither the Borrower nor any Subsidiary is in default
under or with respect to any Contractual Obligation which in the Borrower's
reasonable judgment would have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing or would result from the consummation of
the transactions contemplated by this Agreement or any other Loan Document.

      5.08 OWNERSHIP OF PROPERTY; LIENS. The Borrower and each Subsidiary has
good record and marketable title in fee simple to, or valid leasehold interests
in, all real property necessary or used in the ordinary conduct of its business,
except for such defects in title as would not, individually or in the aggregate,
have a Material Adverse Effect. As of the Closing Date, the property of the
Borrower and its Subsidiaries will be subject to no Liens, other than Permitted
Liens.

      5.09 ENVIRONMENTAL COMPLIANCE. The Borrower and its Subsidiaries conduct
in the ordinary course of business a review of the effect of existing
Environmental Laws and claims alleging potential liability or responsibility for
violation of any Environmental Law on their respective businesses, operations
and properties, and as a result thereof the Borrower has reasonably concluded
that such Environmental Laws and claims would not, individually or in the
aggregate, have a Material Adverse Effect.

      5.10 INSURANCE. The properties of the Borrower and its Subsidiaries are
insured with reputable national insurance companies, not Affiliates of the
Borrower, in such amounts (after giving effect to any self-insurance compatible
with the following standards), with such deductibles and covering such risks as
are customarily carried by companies of similar financial condition and strength
engaged in similar businesses and owning similar properties in localities where
the Borrower or its Subsidiaries operate.

      5.11 TAXES. The Borrower and its Subsidiaries have filed all Federal,
state and other material tax returns and reports required to be filed, and have
paid all Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings and for which adequate reserves have been
provided in accordance with GAAP. There is no proposed tax assessment against
the Borrower or any Subsidiary that would, if made, have a Material Adverse
Effect.

      5.12 ERISA COMPLIANCE.

      (a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state Laws. Each
Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto and, to the best
knowledge of the Borrower, nothing has occurred which would prevent, or cause
the loss of, such qualification. The Borrower and each ERISA Affiliate have made
all required contributions to each Plan subject to Section 412 of the Code, and
no application for a funding

                                       50


waiver or an extension of any amortization period pursuant to Section 412 of the
Code has been made with respect to any Plan. Each Foreign Plan is in compliance
with applicable laws of any applicable foreign jurisdictions, except to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect.

      (b) There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could be reasonably expected to result in a Material Adverse Effect.

      (c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Sections 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the
Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Sections 4069 or 4212(c) of ERISA.

      5.13 SUBSIDIARIES. As of the Closing Date, the Borrower has no
Subsidiaries other than those specifically disclosed in Schedule 1.01 and has no
equity investments in any other corporation or entity other than those
specifically disclosed in Schedule 5.13.

      5.14 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT.

      (a) The Borrower is not engaged and will not engage, principally or as one
of its important activities, in the business of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the Board), or extending
credit for the purpose of purchasing or carrying margin stock.

      (b) None of the Borrower, any Person controlling the Borrower, or any
Subsidiary (i) is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, or (ii) is or is required to be registered as an "investment
company" under the Investment Company Act of 1940.

      5.15 NO FINANCING OF CORPORATE TAKEOVERS. No proceeds of any Credit
Extension will be used to acquire any security in any transaction which is
subject to Section 13 or 14 of the Exchange Act, including particularly (but
without limitation) Sections 13(d) and 14(d) thereof, except as otherwise
permitted pursuant to Section 7.03(f) hereof.

      5.16 INSIDER. The Borrower is not, and no Person having "control" (as that
term is defined in 12 U.S.C. Section 375(b)(5) or in regulations promulgated
pursuant thereto) of the Borrower is, an "executive officer", "director", or
"person who directly or indirectly or in concert with one or more persons owns,
controls, or has the power to vote more than 10% of any class of voting

                                       51


securities" (as those terms are defined in 12 U.S.C. Section 375(b) or in
regulations promulgated pursuant thereto) of any Lender, of a bank holding
company of which any Lender is a subsidiary, or of any bank at which Lender
maintains a correspondent account.

      5.17 DISCLOSURE. No statement, information, report, representation, or
warranty made by any Loan Party in any Loan Document or furnished to the
Administrative Agent or any Lender by or on behalf of any Loan Party in
connection with any Loan Document contains any untrue statement of a material
fact or omits any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made and at the time at which they were made, not misleading. There is no fact
(excluding economic conditions not peculiar to the Borrower or any Subsidiary)
known to the Borrower or any of its Subsidiaries and not known to the public
generally which materially adversely affects its assets or in the future may
reasonably be expected to (so far as the Borrower or any of its Subsidiaries can
now foresee) result in a Material Adverse Effect, which has not been disclosed
to the Administrative Agent and the Lenders by or on behalf of the Borrower or
any of its Subsidiaries prior to the Closing Date in connection with the
transactions contemplated hereby.

      5.18 INTELLECTUAL PROPERTY; LICENSES, ETC. The Borrower and its
Subsidiaries own, or possess the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other rights that are reasonably necessary for the operation of their respective
businesses, without conflict with the rights of any other Person, except to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect.

      5.19 BUSINESSES. The Borrower is presently engaged directly or through
wholly-owned Subsidiaries in (a) the pawn shop business, (b) the business of
cashing checks and conducting related cash dispensing transactions, (c) the
business of making and collecting short term consumer loans, (d) the business of
offering money order, wire transfer and pre-paid card related services to its
customers and (e) other activities related to short term consumer financing and
general consumer financial services.

      5.20 COMMON ENTERPRISE. The Borrower and its Subsidiaries are engaged in
the businesses set forth in Section 5.19 hereof as of the Closing Date, as well
as in certain other businesses. These operations require financing on a basis
such that the credit supplied can be made available from time to time to the
Borrower and various of its Subsidiaries, as required for the continued
successful operation of the Borrower and its Subsidiaries as a whole. The
Borrower has requested the Lender to make credit available hereunder primarily
for the purposes of financing the operations of the Borrower and its
Subsidiaries. The Borrower and each of its Subsidiaries expects to derive
benefit (and the Board of Directors of the Borrower and each of its Subsidiaries
has determined that such Subsidiary may reasonably be expected to derive
benefit), directly or indirectly, from the credit extended by the Lenders
hereunder, both in its separate capacity and as a member of the group of
companies, since the successful operation and condition of the Borrower and each
of its Subsidiaries is dependent on the continued successful performance of the
functions of the group as a whole.

      5.21 SOLVENT. The Borrower is, and the Borrower and its Subsidiaries are
on a consolidated basis, Solvent.

                                       52


                                   ARTICLE VI.
                              AFFIRMATIVE COVENANTS

      So long as any Lender shall have any Revolving Commitment hereunder, any
Loan or other Obligation shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding:

      6.01 FINANCIAL STATEMENTS. The Borrower shall deliver to the
Administrative Agent and each Lender, in form and detail satisfactory to the
Administrative Agent and the Required Lenders:

      (a) as soon as available, but in any event within 45 days after the end of
each of the first three (3) quarterly fiscal periods of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such fiscal period, and consolidated statements of
income, retained earnings and cash flows of the Borrower and its Consolidated
Subsidiaries for that quarterly fiscal period and for that portion of the fiscal
year then ended, in each case setting forth in comparative form the figures for
the corresponding period of the preceding fiscal year, all in reasonable detail
and certified by a Responsible Officer of the Borrower as fairly presenting the
financial condition, results of operations and cash flows of the Borrower and
its Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes; and

      (b) as soon as available, but in any event within 90 days after the end of
each fiscal year of the Borrower, a consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as of the close of such fiscal year, and
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Consolidated Subsidiaries for such fiscal year, in each case
setting forth in comparative form the figures for the preceding fiscal year, all
in reasonable detail and accompanied by a report and opinion of an independent
certified public accountant of nationally recognized standing reasonably
acceptable to the Required Lenders (the "Accounting Firm"), which report and
opinion shall be prepared in accordance with GAAP and shall not be subject to
any qualifications or exceptions as to the scope of the audit nor to any
qualifications and exceptions not reasonably acceptable to the Required Lenders.

      6.02 CERTIFICATES; OTHER INFORMATION. The Borrower shall deliver to the
Administrative Agent and each Lender, in form and detail satisfactory to the
Administrative Agent and the Required Lenders:

      (a) concurrently with the delivery of the financial statements referred to
in Sections 6.01(a) and (b) hereof, a duly completed Compliance Certificate
signed by a Responsible Officer of the Borrower;

      (b) promptly after requested by the Administrative Agent or any Lender,
copies of any detailed audit reports or management letters submitted to the
board of directors (or the audit committee of the board of directors) of the
Borrower by independent accountants in connection with the accounts or books of
the Borrower or any Subsidiary, or any audit of any of them;

      (c) promptly after the same are available, copies of each annual report,
proxy or financial statement or other report or communication sent to the
stockholders of the Borrower,

                                       53


and copies of all annual, regular, periodic and special reports and registration
statements which the Borrower may file or be required to file with the
Securities and Exchange Commission under Section 13 or 15(d) of the Exchange
Act, and not otherwise required to be delivered to the Administrative Agent
pursuant hereto;

      (d) as soon as available, but in any event not later than the earlier of
(i) 90 days after the end of each fiscal year of the Borrower or (ii) promptly
after receiving board approval, projected annual consolidated balance sheets,
and statements of income of the Borrower and its Consolidated Subsidiaries for
the immediately succeeding fiscal year;

      (e) simultaneously with the providing to Teachers or any other Person in
connection with the Note Agreements, or any of the "Loan Documents" as referred
to therein, or any Additional Senior Debt, of each notice of default or
potential default, and each request for amendment, consent or waiver, provide
the Lenders with a copy of such notice or request, together with any other
information reasonably requested by Administrative Agent or the Required Lenders
with respect thereto;

      (f) concurrently with the delivery of the financial statements referred to
in Section 6.01(b), an Officer's Certificate signed by the chief executive
officer of the Borrower; and

      (g) promptly, such additional information regarding the business,
financial or corporate affairs of the Borrower or any Subsidiary as the
Administrative Agent or any Lender may from time to time reasonably request.

      Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(c) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower's
website on the Internet at the website address listed on Schedule 10.02; or (ii)
on which such documents are posted on the Borrower's behalf on
http://www.sec.gov; provided that: (i) the Borrower shall deliver paper copies
of such documents to the Administrative Agent or any Lender that requests the
Borrower to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and
(ii) the Borrower shall notify the Administrative Agent (by telecopier or
electronic mail) of the posting of any such documents. Notwithstanding anything
contained herein, in every instance the Borrower shall be required to provide
paper copies of the Compliance Certificates required by Section 6.02(a) to the
Administrative Agent. Except for such Compliance Certificates, the
Administrative Agent shall have no obligation to request the delivery or to
maintain copies of the documents referred to above, and in any event shall have
no responsibility to monitor compliance by the Borrower with any such request
for delivery, and each Lender shall be solely responsible for requesting
delivery to it or maintaining its copies of such documents.

      In addition, documents delivered by the Borrower to the Administrative
Agent pursuant to clauses (a), (b), and (d) through (f) of Section 6.02 may be
made available to the Lenders through the Platform in accordance with the
provisions of Section 10.02(c).

                                       54


      6.03 NOTICES. The Borrower shall promptly notify the Administrative Agent
and each Lender:

      (a)  of the occurrence of any Default or Event of Default;

      (b) of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including (i) any changes in its
consolidated financial condition or its business (ii) breach or non-performance
of, or any default under, a Contractual Obligation of the Borrower or any
Subsidiary; (iii) any dispute, litigation, investigation, proceeding or
suspension between the Borrower or any Subsidiary and any Governmental
Authority; or (iv) the commencement of, or any material development in, any
litigation, investigation, or proceeding affecting the Borrower or any
Subsidiary, including pursuant to any applicable Environmental Laws;

      (c) of any litigation, investigation or proceeding affecting any Loan
Party in which the damages, penalties, fines or other sanctions could reasonably
be expected to exceed $5,000,000 (to the extent not covered by independent
third-party insurance);

      (d) of the occurrence of any ERISA Event; and

      (e) of any material change in accounting policies or financial reporting
practices by the Borrower or any Subsidiary.

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto. Each notice pursuant to Section 6.03(a) hereof
shall describe with particularity any and all provisions of this Agreement or
other Loan Document that have been breached.

      6.04 PAYMENT OF OBLIGATIONS. The Borrower shall, and shall cause each of
its Subsidiaries to, pay and discharge as the same shall become due and payable,
all its material obligations and liabilities, including (a) all tax liabilities,
assessments and governmental charges or levies upon it or its properties or
assets; (b) all lawful claims which, if unpaid, would by law become a Lien upon
its property; and (c) all Indebtedness, as and when due and payable, but subject
to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness; provided, however, that the Borrower and each
Subsidiary shall not be required to pay any such amount if and so long as the
amount, applicability or validity thereof shall currently be contested in good
faith by appropriate proceedings and appropriate accruals and reserves therefor
have been established in accordance with GAAP.

      6.05 PRESERVATION OF EXISTENCE, ETC. The Borrower shall, and shall cause
each of its Subsidiaries to, preserve, renew and maintain in full force and
effect its legal existence and good standing under the Laws of the jurisdiction
of its organization; take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except in a transaction permitted by Section
7.04 or 7.05 hereof or except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect; and preserve or renew
all of its registered patents, trademarks, trade names and

                                       55


service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Effect.

      6.06 MAINTENANCE OF PROPERTIES. Except where the failure to do so could
not reasonably be expected to have a Material Adverse Effect, the Borrower
shall, and shall cause each of its Subsidiaries to, (a) maintain, preserve and
protect all of its material properties and equipment necessary in the operation
of its business in good working order and condition, ordinary wear and tear
excepted; (b) make all necessary repairs thereto and renewals and replacements
thereof; and (c) use the standard of care typical in the industry in the
operation and maintenance of its facilities.

      6.07 MAINTENANCE OF INSURANCE. The Borrower shall, and shall cause each of
its Subsidiaries to, maintain with reputable national insurance companies not
Affiliates of the Borrower, insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by
Persons of similar financial condition and strength engaged in the same or
similar business and owning similar properties in localities where the Borrower
or its Subsidiaries operate, of such types and in such amounts (it being
acknowledged by the Lenders that the Borrower maintains self-insurance with
respect to inventory which the Borrower has represented pursuant to Section 5.10
is compatible with the standards set forth herein) as are customarily carried
under similar circumstances by such other Persons.

      6.08 COMPLIANCE WITH LAWS. The Borrower shall, and shall cause each of its
Subsidiaries to, comply in all material respects with the requirements of all
Laws applicable to it or to its business or property (including, without
limitation, all federal and state registrations required by anti-money
laundering Laws), except in such instances in which (i) such requirement of Law
is being contested in good faith or a bona fide dispute exists with respect
thereto; or (ii) the failure to comply therewith could not be reasonably
expected to have a Material Adverse Effect.

      6.09 BOOKS AND RECORDS. The Borrower shall, and shall cause each of its
Subsidiaries to, maintain books, records and accounts with respect to itself and
the Subsidiaries which, in reasonable detail, accurately and fairly reflect
their transactions and dispositions of their assets, and maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
(a) transactions are executed in accordance with management's general or
specific authorization, (b) transactions are recorded as necessary (i) to permit
preparation of financial statements in accordance with GAAP, and (ii) to
maintain accountability for assets, (c) access to assets is permitted only in
accordance with management's general or specific authorization and (d) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

      6.10 INSPECTION RIGHTS. The Borrower shall, and shall cause each of its
Subsidiaries to, subject to Section 10.08 hereof, permit representatives and
independent contractors of the Administrative Agent and each Lender to visit and
inspect any of its properties, to examine its corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss its
affairs, finances and accounts with its directors, officers, and independent
public accountants, all at the expense of the Lenders and at such reasonable
times during normal business hours and as often as may be reasonably desired,
upon request of the Required Lenders

                                       56


or the Administrative Agent and reasonable advance notice to the Borrower;
provided, however, that when an Event of Default exists the Administrative Agent
or any Lender (or any of their respective representatives or independent
contractors) may do any of the foregoing at the expense of the Borrower at any
time during normal business hours and without advance notice.

      6.11 COMPLIANCE WITH ERISA. The Borrower shall do, and cause each of its
ERISA Affiliates to do, each of the following: (a) maintain each Plan in
compliance in all material respects with the applicable provisions of ERISA, the
Code and other Federal or state law and maintain each Foreign Plan in compliance
in all material respects with all applicable laws; (b) preclude each Plan which
is qualified under Section 401(a) of the Code from being determined to be
disqualified in any final assessment by the IRS; (c) make all required
contributions to any Plan subject to Section 412 of the Code; and (d) make all
contributions required under its Foreign Plans, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect.

      6.12 USE OF PROCEEDS. The Borrower shall use the proceeds of the Credit
Extensions (i) to consummate Acquisitions permitted hereunder, (ii) to refinance
certain existing indebtedness of the Borrower and (iii) for working capital and
other general corporate purposes not in contravention of any Law or of any Loan
Document.

      6.13 FURTHER ASSURANCES. Upon the reasonable request of the Administrative
Agent, the Borrower will duly execute and deliver to the Administrative Agent
any and all such further instruments and documents (in form and substance
reasonably satisfactory to the Borrower) as may be necessary or advisable, in
the opinion of the Administrative Agent, to obtain the full benefits of the Loan
Documents.

      6.14 NOTICE OF FORMATION OF SUBSIDIARY. Promptly upon the formation of any
Subsidiary and in any event within 30 days after such formation, the Borrower
shall give the Administrative Agent written notice thereof.

      6.15 NEW DOMESTIC SUBSIDIARIES. The Borrower shall cause each Domestic
Subsidiary which the Borrower or any of its Subsidiaries forms or acquires
during the term of this Agreement to execute and deliver to the Administrative
Agent a Guaranty, together with a certified copy of a resolution of the board of
directors (or other authorizing document of the appropriate governing body or
Person) of such Domestic Subsidiary authorizing the execution and delivery of
the Guaranty and the performance of its terms, together with such other
opinions, certificates, and documents as the Administrative Agent may reasonably
request.

      6.16 OPINIONS REGARDING OBLIGATIONS OF GUARANTORS. Within forty-five (45)
days after written request by the Required Lenders, which the Required Lenders
shall be entitled to make at any time, the Borrower shall obtain or cause to be
provided in favor of Lenders an opinion of local counsel satisfactory to the
Required Lenders for any of the Guarantors that opines (a) to such Guarantor's
(i) existence and good standing in its jurisdiction of formation, (ii) due
authority to execute the Guaranty, and (iii) due execution, delivery and
performance of the Guaranty and (b) to the enforceability of the Guaranty
against such Guarantor; provided that Borrower shall be obligated to provide no
more than one opinion of local counsel as to each Guarantor at any time during
the period in which this Agreement is in effect.

                                       57


      6.17 INTEREST RATE PROTECTION. The Borrower shall maintain in effect at
all times after the Closing Date, one or more Interest Rate Protection
Agreements on such terms and with parties as shall be reasonably satisfactory to
the Administrative Agent, the effect of which (when taken together with the
other fixed rate debt and interest rate protection agreements) shall be to fix
or limit the interest cost to the Borrower with respect to at least 40% of the
outstanding Funded Debt of the Borrower.

                                  ARTICLE VII.
                               NEGATIVE COVENANTS

      So long as any Lender shall have any Revolving Commitment hereunder, any
Loan or other Obligation shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding:

      7.01 LIENS. The Borrower shall not, and shall not permit any Subsidiary
to, create, incur, assume or suffer to exist, any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, other than (a)
Permitted Liens, and (b) Liens on assets securing Indebtedness permitted to be
assumed pursuant to Section 7.02(n) hereof, provided that such Liens are fully
paid and released within sixty (60) days after any such Acquisition. The
Borrower shall not, and shall not permit any Subsidiary to, become subject to a
Negative Pledge Agreement except pursuant to the Private Placement Debt, and any
Additional Senior Debt permitted by Section 7.02(l).

      7.02 INDEBTEDNESS. The Borrower shall not, and shall not permit any
Subsidiary to, incur, create, contract, waive, assume, have outstanding,
guarantee or otherwise be or become liable, directly or indirectly, in respect
of any Indebtedness, except for

      (a) the Obligations arising out of or in connection with this Agreement
and the other Loan Documents,

      (b) Capital Leases and purchase money Indebtedness, provided that the
aggregate amount of such Indebtedness which is purchase money Indebtedness plus
the aggregate amount of Capital Leases shall not exceed $15,000,000 at any time,

      (c) current liabilities for taxes and assessments incurred in the ordinary
course of business, and other liabilities for unpaid taxes being contested in
good faith by the Borrower or any Subsidiary for which sufficient reserves have
been established,

      (d) current amounts payable or accrued for other claims (other than for
borrowed funds or purchase money obligations) incurred in the ordinary course of
business, provided that all such liabilities, accounts and claims shall be
promptly paid and discharged when due or in conformity with customary trade
terms, except for those being contested in good faith by the Borrower or a
Subsidiary for which sufficient reserves have been established,

      (e) contingent liabilities resulting from the endorsement of negotiable
instruments in the ordinary course of business,

                                       58


      (f) intercompany loans and advances, provided that the aggregate amount of
outstanding loans and advances by the Borrower and Domestic Subsidiaries to
Foreign Subsidiaries after the Closing Date shall not exceed $10,000,000 in
aggregate principal amount at any time, and provided further that such
intercompany loans and advances may exceed $10,000,000 in aggregate principal
amount so long as an amount equal to such excess amount is re-invested by one or
more Foreign Subsidiaries in the Borrower or a Guarantor within a maximum of 30
days after to the making of such loan or advance;

      (g) obligations (contingent or otherwise) of the Borrower or any
Subsidiary existing or arising under any Interest Rate Protection Agreement,
provided that (i) such obligations are (or were) entered into by such Person in
the ordinary course of business for the purpose of directly mitigating risks
associated with liabilities, commitments, investments, assets, or property held
or reasonably anticipated by such Person, or changes in the value of securities
issued by such Person and not for purposes of speculation; and (ii) such
Interest Rate Protection Agreement does not contain any provision exonerating
the non-defaulting party from its obligation to make payments on outstanding
transactions to the defaulting party,

      (h) Guaranty Obligations permitted under Section 7.17 hereof,

      (i) the Private Placement Debt,

      (j) with respect to Temporary Cash Investments, short term Indebtedness
not constituting "margin loans" and not exceeding $5,000,000 at any time in the
aggregate owed by the Borrower or a Consolidated Subsidiary to the broker or
investment firm which is holding assets for the account of the Borrower or a
Consolidated Subsidiary, but only to the extent that such Indebtedness is to be
repaid, in the ordinary course of business, by the collection or liquidation of
such assets at the maturity of such assets,

      (k) Subordinated Debt, provided that prior to the issuance thereof, the
Borrower has delivered to the Administrative Agent a Compliance Certificate
which indicates that on a pro forma basis after taking into account the issuance
of such Subordinated Debt and the use of the proceeds thereof, there shall occur
no Default or Event of Default,

      (l) Additional Senior Debt of the Borrower, provided that prior to the
incurrence thereof, the Borrower has delivered to the Administrative Agent a
Compliance Certificate which indicates that on a pro forma basis after taking
into account the incurrence of such Additional Senior Debt and the use of the
proceeds thereof, there shall occur no Default or Event of Default,

      (m) intercompany payables for the purchase of goods and services in the
ordinary course of business,

      (n) Indebtedness assumed in Acquisitions permitted pursuant to Section
7.03(f) hereof not to exceed $10,000,000 in aggregate principal amount, provided
(i) at the time of the assumption thereof and immediately thereafter after
giving effect thereto, no Default or Event of Default shall exist and (ii) such
Indebtedness shall be paid in full within sixty (60) days of such Acquisition,

                                       59


      (o) Guaranty Obligations of the Borrower and the Subsidiaries in respect
of Indebtedness otherwise permitted under this Section 7.02,

      (p) intercompany loans and advances among Foreign Subsidiaries,

      (q) Indebtedness of the Borrower in respect of the Cashland Seller Note;

      (r) obligations in respect of earnout or similar payments payable in cash
or which may be payable in cash at the seller's or obligee's option; and

      (s) surety bonds delivered by the Borrower or any Subsidiary in the
ordinary course of business.

      7.03 INVESTMENTS. The Borrower shall not, and shall not permit any
Subsidiary to, make or have outstanding Investments in or to any Person, except
for

      (a) pawn transactions, pawn loans and other short-term consumer loans in
the ordinary course of its day to day business,

      (b) ownership of Capital Stock of Domestic Subsidiaries which, promptly
after the formation or acquisition thereof, execute a Guaranty,

      (c) ownership of Capital Stock of Foreign Subsidiaries, provided that the
aggregate amount of such Investments made after the Closing Date, and
Acquisitions made pursuant to Section 7.03(f) hereof, which are of assets or
entities which are outside the United States, shall not exceed 10% of Net Worth
in aggregate principal amount at any time,

      (d) Temporary Cash Investments and such other "cash equivalent"
investments as the Required Lenders may from time to time approve,

      (e) Investments for the purchase of real estate, provided that (x) such
Investments shall only be for the purpose of operating one or more of the types
of business permitted under clauses (a) through (c) of Section 5.19 located or
to be located on such real estate, (y) the cumulative amount of such Investments
made after the Closing Date, shall not exceed $15,000,000, and (z) clause (y)
immediately preceding notwithstanding, the maximum amount of such Investments
made for the purchase of real estate where one or more of the types of business
permitted under clauses (a) through (c) of Section 5.19 are not existing thereon
at the time of such purchase or cannot reasonably be expected to be established
thereon within twelve months following such purchase, shall not exceed
$7,500,000;

      (f) Acquisitions, provided (i) at time of such Acquisition and after
giving effect thereto, no Default or Event of Default shall exist, (ii) the
assets, property or business being acquired shall be in one or more of the types
of businesses described in clauses (a) through (c) of Section 5.19 hereof, (iii)
such Acquisition shall not be opposed by the board of directors (or other
governing body) of the Person being acquired, (iv) promptly upon becoming
available and in any event within five (5) days prior to any proposed
Acquisition for which the aggregate Acquisition Consideration for such
Acquisition is equal to or greater than $15,000,000, the Administrative Agent
shall have received a pro forma Compliance Certificate setting forth the

                                       60


covenant calculations both immediately prior to and after giving effect to the
proposed Acquisition and certifying that no Default or Event of Default exists
or would occur as a result therefrom, and (v) the Acquisition Consideration for
any single Acquisition shall not exceed 17.5% of Net Worth immediately preceding
the Acquisition without the Required Lenders approval,

      (g) Investments after the Closing Date by the Borrower in Domestic
Subsidiaries,

      (h) intercompany receivables as a result of the transfer of goods and
property in the ordinary course of business, (i) other Investments permitted
under Section 7.04 hereof,

      (j) Investments in existence as of the Closing Date, (including existing
loans to officers of the Borrower and Subsidiaries for the purchase of Capital
Stock of the Borrower to the extent not otherwise prohibited by Applicable Law),
and listed on Schedule 7.03(j),

      (k) Investments as a result of intercompany loans and advances to Foreign
Subsidiaries permitted under Section 7.02(f) hereof;

      (l) the Existing Foreign Investments; and

      (m) other Investments in activities directly related to the types of
business permitted under Section 5.19 hereof, provided that such Investments
shall not exceed $7,500,000 in aggregate principal amount at any time.

      7.04 FUNDAMENTAL CHANGES. The Borrower shall not, and shall not permit any
Subsidiary to, merge, consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its Assets (whether now owned or hereafter acquired)
to or in favor of any Person, except that, so long as no Default or Event of
Default exists or would result therefrom:

      (a) any Subsidiary may merge with (i) the Borrower, provided that the
Borrower shall be the continuing or surviving Person, (ii) any Guarantor, or
(iii) in the case of any such Subsidiary that is a Foreign Subsidiary, any
Subsidiary;

      (b) any Subsidiary may sell all or substantially all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or to a Guarantor; and

      (c) the Borrower and any Subsidiary may make Dispositions permitted
pursuant to Section 7.05 hereof.

      7.05 DISPOSITIONS. The Borrower shall not, and shall not permit any
Subsidiary to, make any Disposition or enter into any agreement to make any
Disposition, except:

      (a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;

                                       61


      (b) Dispositions of inventory and other property in the ordinary course of
business for fair consideration;

      (c) Dispositions permitted under Section 7.04 and Dispositions to a
wholly-owned Domestic Subsidiary which is a Guarantor;

      (d) Dispositions of Capital Stock of the Borrower and Dispositions of
Capital Stock of a Subsidiary to the Borrower or to another Subsidiary;

      (e) Dispositions permitted under Section 7.14;

      (f) Dispositions of Assets (including Capital Stock of a Subsidiary other
than to the Borrower or another Subsidiary) not otherwise permitted in clauses
(a) through (e) above, so long as (i) at the time of such Disposition and after
giving effect thereto, no Default or Event of Default shall exist and (ii) to
the extent the aggregate Net Proceeds of Dispositions during any fiscal year
exceed 7.5% of Net Worth as of the last day of the immediately preceding fiscal
year, the mandatory prepayments required pursuant to Section 2.05(d) hereof are
made; provided, however, notwithstanding anything in this Section 7.05(f) to the
contrary, in no event shall the aggregate Net Proceeds of Dispositions not
otherwise permitted in clauses (a) through (e) above during any fiscal year
exceed 15% of Net Worth as of the last day of the immediately preceding fiscal
year without the prior consent of the Required Lenders;

provided, however, that any Disposition pursuant to clauses (a) through (f)
shall be for fair market value.

      7.06 RESTRICTED PAYMENTS. The Borrower shall not, and shall not permit any
Subsidiary to, directly or indirectly pay any Restricted Payment; provided,
however, (a) any Subsidiary may declare and pay Dividends to or for the benefit
of the Borrower or any Guarantor, (b) the Borrower may (i) declare Dividends
(including the repurchase of Capital Stock of the Borrower), and (ii) make
regularly scheduled principal payments on Subordinated Debt in existence as of
the Closing Date in both cases taken together in an aggregate amount not to
exceed the sum of (A) $16,500,000 plus (B) 50% of cumulative Net Income after
the Closing Date, and (c) the Borrower may repay the Cashland Seller Note and
any repayments on the Cashland Seller Note shall not apply against the dollar
limitations set forth in (ii)(A) and (B) above; provided, further, the Borrower
shall make no Restricted Payments unless there shall exist no Default or Event
of Default prior to or after giving effect to any proposed Restricted Payment.

      7.07 ERISA. The Borrower shall not, and shall not permit any Subsidiary
to, at any time engage in a transaction which could be subject to Section 4069
or 4212(c) of ERISA, or permit any Plan to (a) engage in any non-exempt
"prohibited transaction" (as defined in Section 4975 of the Code); (b) fail to
comply in any material respect with ERISA or any other applicable Laws; or (c)
incur any material "accumulated funding deficiency" (as defined in Section 302
of ERISA), which, with respect to each event listed above, could be reasonably
expected to have a Material Adverse Effect.

      7.08 CHANGE IN NATURE OF BUSINESS. The Borrower shall not, and shall not
permit any Subsidiary to, engage in any material line of business substantially
different from those lines of

                                       62


business conducted by the Borrower and its Subsidiaries on the date hereof and
businesses reasonably related thereto.

      7.09 TRANSACTIONS WITH AFFILIATES. The Borrower shall not, and shall not
permit any Subsidiary to, enter into any transaction of any kind with any
Affiliate of the Borrower, other than arm's-length transactions with Affiliates,
transactions otherwise permitted hereunder and transactions with Affiliates in
the ordinary course of business.

      7.10 BURDENSOME AGREEMENTS. The Borrower shall not, and shall not permit
any Subsidiary to enter into any Contractual Obligation that limits the ability
of any Subsidiary to make Dividends or other Dispositions to the Borrower or to
otherwise transfer property to the Borrower.

      7.11 USE OF PROCEEDS. The Borrower shall not, directly or indirectly, use
the proceeds of any Credit Extension, whether directly or indirectly, and
whether immediately, incidentally or ultimately, to purchase or carry margin
stock (within the meaning of Regulation U of the Board) or to extend credit to
others for the purpose of purchasing or carrying margin stock or to refund
indebtedness originally incurred for such purpose.

      7.12 AMENDMENT OF ORGANIZATION DOCUMENTS AND FISCAL YEAR. The Borrower
shall not, and shall not permit any Subsidiary to, amend, modify, or waive any
of its rights under any Organization Documents in a manner adverse to the
Lenders. The Borrower shall not, and shall not permit any Subsidiary to, change
its fiscal quarters or fiscal year, except after providing 30 days prior written
notice to Lenders and provided such change does not have the effect of delaying
or otherwise curing a Default or Event of Default that would have otherwise
existed.

      7.13 AMENDMENT OF SUBORDINATED DEBT. The Borrower shall not, and shall not
permit any Subsidiary to, change or amend (or take any action or fail to take
any action the result of which is an effective amendment or change) or accept
any waiver or consent with respect to, any document, instrument, or agreement
relating to any Subordinated Debt that would result in (a) an increase in the
principal, interest, overdue interest, fees or other amounts payable under any
Subordinated Debt, (b) an acceleration in any date fixed for payment or
prepayment of principal, interest, fees or other amounts payable under any
Subordinated Debt (including, without limitation, as a result of any
redemption), (c) a change in any of the subordination provisions of any
Subordinated Debt, (d) a change in any defined term, covenant, term or provision
in any Subordinated Debt which would result in such term or provision being more
restrictive than the existing terms of such Subordinated Debt or the terms of
this Agreement, or (e) a change in any term or provision of any Subordinated
Debt that could reasonably be expected to have a material adverse effect on the
interest of the Lenders.

      7.14 SALE AND LEASEBACK. The Borrower shall not, and shall not permit any
Subsidiary to, enter any arrangement whereby it sells or transfers any of its
Assets, and thereafter rents or leases those Assets except for the sale and
leaseback of operating facilities so long as the aggregate amount of such sale
and leasebacks made after the Closing Date, shall not exceed $25,000,000.

                                       63


      7.15 ALTERATION OF MATERIAL AGREEMENTS. The Borrower will not, and will
not permit any Subsidiary to, consent to or permit any alterations, amendments,
modifications, releases, waivers or terminations of any material agreement to
which it is a party, including but not limited to the Note Agreements, the
Private Placement Debt and the Additional Senior Debt, if such alterations,
amendments, modification, releases, waivers or terminations would have a
Material Adverse Effect.

      7.16 STRICT COMPLIANCE. If any action or failure to act by the Borrower
violates any covenant or obligation of the Borrower contained herein, then such
violation shall not be excused by the fact that such action or failure to act
would otherwise be permitted by any covenant (or exception to any covenant)
other than the covenant violated.

      7.17 GUARANTIES. The Borrower will not, and will not permit any Subsidiary
to, become or be liable in respect of any Guaranty Obligation, except for (i)
the Guaranty, (ii) guaranties of Indebtedness to extent such Indebtedness is
permitted pursuant to Section 7.02 hereof), and (iii) additional limited
guaranties of the Borrower, provided that the aggregate Indebtedness guaranteed
by such additional limited guaranties at any time shall not exceed $5,000,000,
and provided further that within five (5) days after the execution of each
guaranty by the Borrower for Indebtedness in excess of $2,500,000, the Borrower
shall provide each of the Lenders with a copy of such executed guaranty.

      7.18 FINANCIAL COVENANTS.

      (a) Maximum Leverage Ratio. The Borrower shall not permit the Leverage
Ratio as of the end of any fiscal quarter of the Borrower to be greater than
2.75 to 1.00:

      (b) Minimum Fixed Charge Coverage Ratio. The Borrower shall not permit the
Fixed Charge Coverage Ratio as of the end of any fiscal quarter of the Borrower
to be less than 1.75 to 1.00.

      (c) Minimum Net Worth. The Borrower shall not permit Net Worth to be less
than the sum of (i) $270,000,000, plus (ii) 50% of Net Income (with no deduction
for net losses during any quarterly period) earned after September 30, 2004,
plus (iii) 100% of the Net Proceeds received by the Borrower and its
Subsidiaries from the issuance and sale of Capital Stock of the Borrower or any
Subsidiary (other than issuance to the Borrower or a wholly-owned Subsidiary),
including any conversion of debt securities of the Borrower into such Capital
Stock after September 30, 2004.

                                 ARTICLE VIII.
                         EVENTS OF DEFAULT AND REMEDIES

      8.01 EVENTS OF DEFAULT. Any of the following shall constitute an Event of
Default:

      (a) The Borrower fails to pay when due (i) any principal of, or interest
on any Loan or any L/C Obligation or (ii) any fee, expense, reimbursement
obligation or any other amount due in connection herewith or with any other Loan
Document, and such failure with respect to clause (ii) shall have continued for
three (3) Business Days after receipt from the Administrative Agent of notice of
such failure on any Loan or on any L/C Obligation; or

                                       64


      (b) Any representation or warranty made under this agreement, or any of
the other Loan Papers, or in any certificate or statement furnished or made to
the Lenders pursuant hereto or in connection herewith or with any Loan or L/C
Obligation hereunder, shall prove to be untrue or inaccurate in any material
respect as of the date on which such representation or warranty is made; or

      (c) The Borrower or any Subsidiary fails to perform or observe any term,
covenant or agreement contained in any of Section 6.03(a) or (b), 6.05, 6.10,
6.12, or Article VII hereof (but only to the extent that the failure to perform
or observe the covenants in Section 7.01, 7.02 and/or 7.03 involves an aggregate
amount in excess of $500,000); or

      (d) The Borrower or any Subsidiary shall fail to perform or observe any
other term or covenant contained herein or in any of the Loan Documents (other
than those specified in subsection (a), or (c) above), on its part to be
performed or observed and such failure shall not be remedied within thirty (30)
days following the earlier of knowledge thereof by the Borrower or any
Subsidiary or written notice by the Administrative Agent to the Borrower; or

      (e) (i) The Borrower or any Subsidiary (A) fails to make any payment when
due (whether by scheduled maturity, required prepayment, acceleration, demand,
or otherwise) in respect of any Indebtedness or any Guaranty Obligation (other
than Indebtedness hereunder and Indebtedness under Interest Rate Protection
Agreements) having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than $2,500,000, or (B) fails
to observe or perform any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such Indebtedness
or the beneficiary or beneficiaries of any Guaranty Obligation with respect to
such Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to be demanded or to become due or to be repurchased or
redeemed (automatically or otherwise) or such Guaranty Obligation to become
payable or cash collateral in respect thereof to be demanded; or (ii) there
occurs under any Interest Rate Protection Agreement an Early Termination Date
(as defined in such Interest Rate Protection Agreement) resulting from (A) any
event of default (or, if such Interest Rate Protection Agreement is a forward
gold transaction, any event of default which has not been cured within five (5)
days after the occurrence of such event of default) under such Interest Rate
Protection Agreement as to which the Borrower or any Subsidiary is the
Defaulting Party (as defined in such Interest Rate Protection Agreement) or (B)
any Termination Event (as so defined) under such Interest Rate Protection
Agreement as to which the Borrower or any Subsidiary is an Affected Party (as so
defined) and, in either event, the Termination Value owed by the Borrower or
such Subsidiary as a result thereof is greater than $1,000,000; or

      (f) Any material portion of any Loan Document shall cease to be legal,
valid, binding agreements enforceable against any party executing the same in
accordance with the respective terms thereof or shall in any way be terminated
or become or be declared ineffective or inoperative or shall in any way
whatsoever cease to give or provide the respective rights, remedies, powers or
privileges intended to be created hereby; or

                                       65


      (g) The Borrower or any Subsidiary institutes or consents to the
institution of any proceeding under any Debtor Relief Law, or makes an
assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; or

      (h) Any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or consent
of the Borrower or any Subsidiary, or any proceeding under any Debtor Relief Law
relating to the Borrower or any Subsidiary, or to all or any part of its
property is instituted without the consent of such Person, and such appointment
or proceeding shall remain undismissed and unstayed for a period of 60
consecutive days; or

      (i) (i) The Borrower or any Subsidiary becomes unable or admits in writing
its inability or fails generally to pay its debts as they become due, or (ii)
any writ or warrant of attachment or execution or similar process is issued or
levied against all or any material part of the property of any such Person and
is not released, vacated or fully bonded within 30 days after its issue or levy;
or

      (j) There is entered against the Borrower or any Subsidiary a final
judgment or order for the payment of money in an aggregate amount exceeding
$2,500,000, and such judgment shall not be satisfied, discharged or stayed (with
sufficient reserves having been set aside by the Borrower or such Subsidiary to
pay such judgment) at least ten (10) days prior to the date on which any of its
assets could be lawfully sold to satisfy such judgment; or

      (k) (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $2,500,000,
(ii) the Borrower or any ERISA Affiliate fails to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of $2,500,000 or (iii) any Foreign Plan
shall be terminated or the Borrower or any Foreign Subsidiary shall become
obligated to pay any obligation with respect to any Foreign Plan which in either
case could reasonably be expected to have a Material Adverse Effect; or

      (l) A Change of Control of the Borrower shall have occurred; or

      (m) There shall occur any event which, in the reasonable opinion of the
Required Lenders, will have a Material Adverse Effect.

      8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs, the
Administrative Agent shall, at the request of, or may, with the consent of, the
Required Lenders,

      (a) declare the commitment of each Lender to make Loans and any obligation
of any L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;

      (b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan

                                       66


Document to be immediately due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby expressly waived by the
Borrower;

      (c) require that the Borrower Cash Collateralize the L/C Obligations (in
an amount equal to the then Outstanding Amount thereof); and

      (d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable law;

provided, however, that upon the occurrence of any event specified in
subsections (g) or (h) of Section 8.01 hereof, the obligation of each Lender to
make Loans and any obligation of a L/C Issuer to make L/C Credit Extensions
shall automatically terminate, the unpaid principal amount of all outstanding
Loans and all interest and other amounts as aforesaid shall automatically become
due and payable, and the obligation of the Borrower to Cash Collateralize the
L/C Obligations as aforesaid shall automatically become effective, in each case
without further act of the Administrative Agent or any Lender.

      8.03 APPLICATION OF PROCEEDS. After the exercise of remedies provided for
in Section 8.02 (or after the Loans have automatically become immediately due
and payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:

            First, to payment of that portion of the Obligations constituting
      fees, indemnities, expenses and other amounts (including Attorney Costs
      and amounts payable under Article III) payable to the Administrative Agent
      in its capacity as such;

            Second, to payment of that portion of the Obligations constituting
      fees, indemnities and other amounts (other than principal and interest)
      payable to the Lenders (including Attorney Costs and amounts payable under
      Article III), ratably among them in proportion to the amounts described in
      this clause Second payable to them;

            Third, to payment of that portion of the Obligations constituting
      accrued and unpaid interest on the Loans and L/C Borrowings, ratably among
      the Lenders in proportion to the respective amounts described in this
      clause Third payable to them;

            Fourth, to payment of that portion of the Obligations constituting
      unpaid principal of the Loans and L/C Borrowings in proportion to the
      respective amounts described in this clause Fourth held by them;

            Fifth, to the Administrative Agent for the account of any applicable
      L/C Issuer, to Cash Collateralize that portion of L/C Obligations
      comprised of the aggregate undrawn amount of Letters of Credit;

            Sixth, to payment of Interest Rate Protection Obligations, ratably
      among the Guarantied Parties (as defined in the Guaranty) in proportion to
      the respective amounts described in this clause Sixth held by them; and

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            Last, the balance, if any, after all of the Obligations have been
      indefeasibly paid in full, to the Borrower or as otherwise required by
      Law.

Subject to Section 2.04(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
other Obligations, if any, in the order set forth above.

                                  ARTICLE IX.
                              ADMINISTRATIVE AGENT

      9.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.

      (a) Each Lender hereby irrevocably appoints, designates and authorizes the
Administrative 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. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, 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 the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Loan Documents with
reference to the Administrative 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.

      (b) Each L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith until such
time (and except for so long) as the Administrative Agent may agree at the
request of the Required Lenders to act for such L/C Issuer with respect thereto;
provided, however, that each L/C Issuer shall have all of the benefits and
immunities (i) provided to the Administrative Agent in this Article IX with
respect to any acts taken or omissions suffered by each such L/C Issuer in
connection with Letters of Credit issued by it or proposed to be issued by it
and the application and agreements for letters of credit pertaining to the
Letters of Credit as fully as if the term "Administrative Agent" as used in this
Article IX included each L/C Issuer with respect to such acts or omissions, and
(ii) as additionally provided herein with respect to each L/C Issuer.

      9.02 DELEGATION OF DUTIES. The Administrative 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
(including counsel to any Loan Party) and other consultants or experts
concerning all matters pertaining to such duties. The

                                       68


Administrative Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects in the absence of gross
negligence or willful misconduct.

      9.03 LIABILITY OF ADMINISTRATIVE AGENT. No Agent-Related Person shall (a)
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
in connection with its duties expressly set forth herein), or (b) be responsible
in any manner to any Lender or participant for any recital, statement,
representation or warranty made by any Loan Party or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative 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
any Loan Party 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 or participant 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 Loan Party or any Affiliate thereof.

      9.04 RELIANCE BY ADMINISTRATIVE AGENT.

      (a) The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, electronic mail, 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 any Loan Party), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under any Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the 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. The Administrative 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 the Required Lenders or all the Lenders, if required hereunder, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and participants. Where this Agreement expressly
permits or prohibits an action unless the Required Lenders otherwise determine,
the Administrative Agent shall, and in all other instances, the Administrative
Agent may, but shall not be required to, initiate any solicitation for the
consent or a vote of the Lenders.

      (b) For purposes of determining compliance with the conditions specified
in Section 4.01 hereof, each Lender that has signed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Administrative Agent to such Lender
for consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender.

                                       69


      9.05 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Administrative Agent for the account of the Lenders,
unless the Administrative Agent shall have received written notice from a Lender
or the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." The
Administrative Agent will notify the Lenders of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be directed by the Required Lenders in accordance with
Article VIII; provided, however, that unless and until the Administrative Agent
has received any such direction, the Administrative 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 or in the best
interest of the Lenders.

      9.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE AGENT.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereinafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Loan Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower hereunder. Each Lender also represents that it
will, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and the other Loan Parties. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent herein, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any of the Loan Parties or any of
their respective Affiliates which may come into the possession of any
Agent-Related Person.

      9.07 INDEMNIFICATION OF ADMINISTRATIVE AGENT. WHETHER OR NOT THE
TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED, THE LENDERS SHALL INDEMNIFY
UPON DEMAND EACH AGENT-RELATED PERSON (TO THE EXTENT NOT REIMBURSED BY OR ON
BEHALF OF ANY LOAN PARTY AND WITHOUT LIMITING THE OBLIGATION OF ANY LOAN PARTY
TO DO SO), PRO RATA, AND HOLD HARMLESS EACH AGENT-RELATED PERSON FROM AND
AGAINST ANY AND ALL INDEMNIFIED LIABILITIES INCURRED BY IT (WHETHER

                                       70


OR NOT ARISING OUT OF THE NEGLIGENCE OF SUCH AGENT-RELATED PERSON); PROVIDED,
HOWEVER, THAT NO LENDER SHALL BE LIABLE FOR THE PAYMENT TO ANY AGENT-RELATED
PERSON OF ANY PORTION OF SUCH INDEMNIFIED LIABILITIES RESULTING FROM SUCH
PERSON'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT; PROVIDED, HOWEVER, THAT NO
ACTION TAKEN IN ACCORDANCE WITH THE DIRECTIONS OF THE REQUIRED LENDERS SHALL BE
DEEMED TO CONSTITUTE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT FOR PURPOSES OF THIS
SECTION. WITHOUT LIMITATION OF THE FOREGOING, EACH LENDER SHALL REIMBURSE THE
ADMINISTRATIVE AGENT UPON DEMAND FOR ITS RATABLE SHARE OF ANY COSTS OR
OUT-OF-POCKET EXPENSES (INCLUDING ATTORNEY COSTS) INCURRED BY THE ADMINISTRATIVE
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 THE ADMINISTRATIVE
AGENT IS NOT REIMBURSED FOR SUCH EXPENSES BY OR ON BEHALF OF THE BORROWER. THE
UNDERTAKING IN THIS SECTION SHALL SURVIVE TERMINATION OF THE REVOLVING
COMMITMENTS, THE PAYMENT OF ALL OBLIGATIONS HEREUNDER AND THE RESIGNATION OR
REPLACEMENT OF THE ADMINISTRATIVE AGENT. THE FOREGOING INDEMNITY SHALL APPLY TO
THE NEGLIGENCE OF THE AGENT-RELATED PERSON (BUT NOT THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF THE AGENT-RELATED PERSON).

      9.08 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The Administrative
Agent, acting in any capacity other than pursuant to this Agreement, 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 each of
the Loan Parties and their respective Affiliates as though it were not the
Administrative Agent or one of the L/C Issuers hereunder and without notice to
or consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, the Administrative Agent, acting in any capacity other than pursuant
to this Agreement, or its Affiliates may receive information regarding any Loan
Party or its Affiliates (including information that may be subject to
confidentiality obligations in favor of such Loan Party or such Affiliate) and
acknowledge that the Administrative Agent shall be under no obligation to
provide such information to them. With respect to its Loans, the Administrative
Agent, acting in its capacity as a Lender, shall have the same rights and powers
under this Agreement as any other Lender and may exercise such rights and powers
as though it were not the Administrative Agent or one of the L/C Issuers, and
the terms "Lender" and "Lenders" include the Administrative Agent in its
individual capacity.

      9.09 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent (i) may
resign as Administrative Agent upon 30 days' notice to the Lenders and the
Borrower and (ii) if the Administrative Agent, acting in its capacity as a
Lender, assigns all of its Revolving Commitments and Loans pursuant to Section
10.07(b), shall resign upon receiving a written request therefor from the
Borrower, with such resignation to be effectuated by the Administrative Agent
sending 30 days advance notice of such resignation to the Borrower and the
Lenders, such

                                       71


resignation notice to be delivered by the Administrative Agent to
the Borrower and the Lenders upon the Administrative Agent's receipt of the
above-described written notice from the Borrower requesting such resignation. If
the Administrative Agent resigns under this Agreement, the Required Lenders
shall appoint from among the Lenders a successor administrative agent for the
Lenders which successor administrative agent shall require the consent of the
Borrower at all times other than during the existence of an Event of Default
(which consent of the Borrower shall not be unreasonably withheld or delayed).
If no successor administrative agent is appointed prior to the effective date of
the resignation of the Administrative Agent, the Administrative Agent may
appoint, after consulting with the Lenders and the Borrower, a successor
administrative agent from among the Lenders. Upon the acceptance of its
appointment as successor administrative agent hereunder, such successor
administrative agent shall succeed to all the rights, powers and duties of the
retiring Administrative Agent and the term "Administrative Agent" shall mean
such successor administrative agent, and the retiring Administrative Agent's
appointment, powers and duties as Administrative Agent shall be terminated.
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article IX and Sections 10.04 and
10.05 hereof shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement. If no
successor administrative agent has accepted appointment as Administrative Agent
by the date which is 30 days following a retiring Administrative Agent's notice
of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above.

      Any resignation by an Administrative Agent pursuant to this Section shall
also constitute its resignation as an L/C Issuer and Swing Line Lender. Upon the
acceptance of a successor's appointment as Administrative Agent hereunder, (a)
such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring L/C Issuer and Swing Line Lender,
(b) the retiring L/C Issuer and Swing Line Lender shall be discharged from all
of their respective duties and obligations hereunder or under the other Loan
Documents, and (c) the successor L/C Issuer shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or make other arrangement satisfactory to the retiring L/C Issuer to
effectively assume the obligations of the retiring L/C Issuer with respect to
such Letters of Credit.

      9.10 GUARANTY MATTERS. The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion, to release any
Guarantor from its obligations under the Guaranty if such Person ceases to be a
Subsidiary as a result of a transaction permitted hereunder. Upon request by the
Administrative Agent at any time, the Required Lenders will confirm in writing
the Administrative Agent's authority to release any Guarantor from its
obligations under the Guaranty pursuant to this Section 9.10.

      9.11 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the

                                       72


Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or otherwise

      (a) to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative Agent
and their respective agents and counsel and all other amounts due the Lenders
and the Administrative Agent under Sections 2.03(i) and (j), 2.09 and 10.04)
allowed in such judicial proceedings; and

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04 hereof.

      9.12 RELATED OBLIGATIONS. The benefit of the Loan Documents and of the
provisions of this Agreement and the Guaranty shall extend to and be available
in respect of any obligation arising under any Affiliated IRP Agreement or that
is otherwise owed to Persons other than the Administrative Agent and the Lenders
pursuant to the Loan Documents or the Affiliated IRP Agreements (collectively,
"Related Obligations") solely on the condition and understanding, as among the
Administrative Agent and the Lenders, that (a) the Related Obligations shall be
entitled to the benefit of the Loan Documents to the extent expressly set forth
in this Agreement and the other Loan Documents and to such extent the
Administrative Agent shall hold, and have the right and power to act with
respect to, the Guaranty on behalf and as agent for the holders of the Related
Obligations, but the Administrative Agent is otherwise acting solely as agent
for the Lenders and shall have no fiduciary duty, duty of loyalty, duty of care,
duty of disclosure or other obligation whatsoever to any holder of Related
Obligations; (b) all matters, acts and omissions relating in any manner to the
Guaranty shall be governed solely by the provisions of this Agreement and the
Guaranty and no separate Lien, right, power or remedy shall arise or exist in
favor of any Guarantied Party (as defined in the Guaranty) under any separate
instrument or agreement or in respect of any Related Obligation; (c) each
Guarantied Party shall be bound by all actions taken or omitted, in accordance
with the terms of this Agreement and the Guaranty, by the Administrative Agent
and the Required Lenders, each of whom shall be entitled to act at its sole
discretion and exclusively in its own interest given its own Revolving
Commitment and its own interest in the Loans, L/C Obligations and other
Obligations to it arising under this Agreement or the other Loan Documents,
without any duty or liability to any other Guarantied Party or as to any Related
Obligation and without regard to whether any Related Obligation remains
outstanding or is otherwise affected or put in jeopardy thereby; (d) no holder
of Related Obligations and no other Guarantied Party (except the Administrative
Agent and the Lenders, to

                                       73


the extent set forth in this Agreement) shall have any right to be notified of,
or to direct, require or be heard with respect to, any action taken or omitted
under this Agreement or the other Loan Documents; and (e) no holder of any
Related Obligation shall exercise any right of setoff, banker's lien or similar
right, except as expressly provided in Section 10.09 hereof.

      9.13 OTHER AGENTS; ARRANGERS AND MANAGERS. None of the Lenders or other
Persons identified on the facing page or signature pages of this Agreement as a
"syndication agent," "documentation agent," "co-agent," "book manager," "lead
manager," "arranger, " "lead arranger" or "co-arranger" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than, in the case of such Lenders, those applicable to all Lenders as such.
Without limiting the foregoing none of the Lenders or other Persons so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders or other Persons so identified in deciding to enter into this
Agreement or in taking or not taking action hereunder.

                                   ARTICLE X.
                                  MISCELLANEOUS

      10.01 AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower or any other Loan Party therefrom, shall be effective unless in writing
signed by the Required Lenders and the Borrower or the applicable Loan Party, as
the case may be, and acknowledged by the Administrative Agent, and each 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 amendment,
waiver or consent shall:

      (a) extend or increase the Revolving Commitment of any Lender (or
reinstate any Revolving Commitment terminated pursuant to Section 8.02 hereof)
or subject the Lenders to any additional obligations, without the written
consent of such Lender;

      (b) postpone any scheduled date fixed by this Agreement or any other Loan
Document for any payment (excluding mandatory prepayments) of principal,
interest, fees or other amounts due to the Lenders (or any of them) hereunder or
under any other Loan Document or waive any Event of Default occurring pursuant
to Section 8.01(a) hereof, without the written consent of each Lender directly
affected thereby;

      (c) reduce or subordinate the principal of, or the rate of interest
specified herein on, any Loan or L/C Borrowing, or (subject to clause (iv) of
the proviso below) any fees or other amounts payable hereunder or under any
other Loan Document, or change the manner of computation of the Leverage Ratio
(including any change in any defined terms used therein) that would result in a
reduction of any interest rate on any Loan or fee payable hereunder, without the
written consent of each Lender directly affected thereby;

      (d) change the percentage of the Aggregate Revolving Commitments or of the
aggregate unpaid principal amount of the Loans and L/C Obligations which is
required for the Lenders or any of them to take any action hereunder, without
the written consent of each Lender;

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      (e) change the Pro Rata Share or Voting Percentage of any Lender, without
the written consent of each Lender;

      (f) amend this Section, or any provision herein providing for consent or
other action by all the Lenders, without the written consent of each Lender; or

      (g) release any Guarantor from any Guaranty or subordinate any obligation
of any Guarantor under any Guaranty, except as otherwise provided in Section
9.10 hereof, without the written consent of each Lender;

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by each L/C Issuer in addition to the Required Lenders or all
the Lenders, as the case may be, affect the rights or duties of such L/C Issuer
under this Agreement or any Letter of Credit Application relating to any Letter
of Credit issued or to be issued by it; (ii) no amendment, waiver or consent
shall, unless in writing and signed by the Swing Line Lender in addition to the
Required Lenders or all the Lenders, as the case may be, affect the rights or
duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver
or consent shall, unless in writing and signed by the Administrative Agent in
addition to the Required Lenders or all the Lenders, as the case may be, affect
the rights or duties of the Administrative Agent under this Agreement or any
other Loan Document; and (iv) no Agent Fee Letter may be amended, or rights or
privileges thereunder waived, except in a writing executed by the parties to
such Agent Fee Letter. Notwithstanding anything to the contrary herein, any
Lender that has failed to fund any portion of the Loans, participations in L/C
Obligations or participations in Swing Line Loans required to be funded by it
hereunder shall not have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Pro Rata Share of such Lender may
not be increased without the consent of such Lender.

      10.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.

      (a) General. Unless otherwise expressly provided herein, all notices and
other communications provided for hereunder shall be in writing (including by
facsimile transmission) and mailed, faxed or delivered, to the address,
facsimile number or (subject to subsection (c) below) electronic mail address
specified for notices on Schedule 10.02; or, in the case of the Borrower, the
Administrative Agent, each L/C Issuer or the Swing Line Lender, to such other
address as shall be designated by such party in a notice to the other parties,
and in the case of any other party, to such other address as shall be designated
by such party in a notice to the Borrower, the Administrative Agent, each L/C
Issuer and the Swing Line Lender. All such notices and other communications
shall be deemed to be given or made upon the earlier to occur of (i) actual
receipt by the intended recipient and (ii) (A) if delivered by hand or by
courier, when signed for by the intended recipient; (B) if delivered by
certified mail, three Business Days after deposit in the mails, postage prepaid
for certified delivery with return receipt requested; (C) if delivered by
facsimile, when sent and receipt has been confirmed by telephone; and (D) if
delivered by electronic mail (which form of delivery is subject to the
provisions of subsection (c) below), when delivered; provided, however, that
notices and other communications to the Administrative Agent, each L/C Issuer
and the Swing Line Lender pursuant to Article II shall not be effective until
actually received by such Person. Any notice or other communication permitted to
be given, made or

                                       75


confirmed by telephone hereunder shall be given, made or confirmed by means of a
telephone call to the intended recipient at the number specified on Schedule
10.02, it being understood and agreed that a voicemail message shall in no event
be effective as a notice, communication or confirmation hereunder.

      (b) Effectiveness of Facsimile Documents and Signatures. Loan Documents
may be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as manually-signed originals and shall be binding on all Loan
Parties, the Administrative Agent and the Lenders. The Administrative Agent may
also require that any such documents and signatures be confirmed by a
manually-signed original thereof; provided, however, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.

      (c) Other Communications. Notwithstanding anything in this Section 10.02
or elsewhere in this Agreement to the contrary, the Borrower agrees that the
Administrative Agent may make any material delivered by the Borrower to the
Administrative Agent, as well as any amendments, waivers, consents, and other
written information, documents, instruments and other materials relating to the
Borrower, any of its Subsidiaries, or any other materials or matters relating to
this Agreement, the Notes or any of the transactions contemplated hereby
(collectively, the "Communications") available to the Lenders by posting such
notices on an electronic delivery system (which may be provided by the
Administrative Agent, an Affiliate of the Administrative Agent, or any Person
that is not an Affiliate of the Administrative Agent), such as IntraLinks, or a
substantially similar electronic system (the "Platform"). The Borrower
acknowledges that (i) the distribution of material through an electronic medium
is not necessarily secure and that there are confidentiality and other risks
associated with such distribution, (ii) the Platform is provided "as is" and "as
available" and (iii) neither the Administrative Agent nor any of its Affiliates
warrants the accuracy, completeness, timeliness, sufficiency, or sequencing of
the Communications posted on the Platform. The Administrative Agent and its
Affiliates expressly disclaim with respect to the Platform any liability for
errors in transmission, incorrect or incomplete downloading, delays in posting
or delivery, or problems accessing the Communications posted on the Platform and
any liability for any losses, costs, expenses or liabilities that may be
suffered or incurred in connection with the Platform. No warranty of any kind,
express, implied or statutory, including, without limitation, any warranty of
merchantability, fitness for a particular purpose, non-infringement of third
party rights or freedom from viruses or other code defects, is made by the
Administrative Agent or any of its Affiliates in connection with the Platform.
Each Lender agrees that notice to it (as provided in the next sentence) (a
"Notice") specifying that any Communication has been posted to the Platform
shall for purposes of this Agreement constitute effective delivery to such
Lender of such information, documents or other materials comprising such
Communication. Each Lender agrees (i) to notify, on or before the date such
Lender becomes a party to this Agreement, the Administrative Agent in writing of
such Lender's e-mail address to which a Notice may be sent (and from time to
time thereafter to ensure that the Agent has on record an effective e-mail
address for such Lender) and (ii) that any Notice may be sent to such e-mail
address.

      (d) Reliance by Administrative Agent and Lenders. The Administrative Agent
and the Lenders shall be entitled to rely and act upon any notices (including
telephonic or electronically mailed Revolving Loan Notices and Swing Line Loan
Notices) purportedly given by or on behalf of the Borrower even if (i) such
notices were not made in a manner specified

                                       76


herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Borrower shall indemnify
each Agent-Related Person and each Lender from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower. All telephonic or
electronically mailed notices to and other communications with the
Administrative Agent may be recorded by the Administrative Agent, and each of
the parties hereto hereby consents to such recording.

      10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein or therein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.

      10.04 ATTORNEY COSTS, EXPENSES AND TAXES. The Borrower agrees (a) to pay
or reimburse the Administrative Agent for all reasonable costs and expenses
incurred in connection with the development, preparation, negotiation and
execution of this Agreement and the other Loan Documents and any amendment,
waiver, consent or other modification of the provisions hereof and thereof
(whether or not the transactions contemplated hereby or thereby are
consummated), and the consummation and administration of the transactions
contemplated hereby and thereby, including all Attorney Costs, (b) to pay or
reimburse the Administrative Agent for all reasonable costs and expenses
incurred in connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under this Agreement or the other Loan
Documents (including all such costs and expenses incurred during any "workout"
or restructuring in respect of the Obligations and during any legal proceeding,
including any proceeding under any Debtor Relief Law), including all Attorney
Costs, and (c) to pay or reimburse each Lender for all reasonable costs and
expenses incurred after an Event of Default in connection with the enforcement,
attempted enforcement, or preservation of any rights or remedies under this
Agreement or the other Loan Documents (including all such costs and expenses
incurred during any "workout" or restructuring in respect of the Obligations and
during any legal proceeding, including any proceeding under any Debtor Relief
Law), including all Attorney Costs. The foregoing costs and expenses shall
include all reasonable search, filing, recording, title insurance and appraisal
charges and fees and taxes related thereto, and other reasonable out-of-pocket
expenses incurred by the Administrative Agent and the reasonable cost of
independent public accountants and other outside experts retained by the
Administrative Agent or any Lender. The agreements in this Section shall survive
the termination of the Revolving Commitments and repayment of all the other
Obligations.

      10.05 INDEMNIFICATION BY THE BORROWER.

      (a) WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED,
THE BORROWER AGREES TO INDEMNIFY, SAVE AND HOLD HARMLESS EACH AGENT-RELATED
PERSON, EACH LENDER AND THEIR RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS,
EMPLOYEES, COUNSEL, AGENTS AND ATTORNEYS-IN-FACT (COLLECTIVELY THE
"INDEMNITEES") FROM AND

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AGAINST: (a) ANY AND ALL CLAIMS, DEMANDS, ACTIONS OR CAUSES OF ACTION THAT MAY
AT ANY TIME (INCLUDING AT ANY TIME FOLLOWING REPAYMENT OF THE OBLIGATIONS AND
THE RESIGNATION OR REMOVAL OF THE ADMINISTRATIVE AGENT OR THE REPLACEMENT OF ANY
LENDER) BE ASSERTED OR IMPOSED AGAINST ANY INDEMNITEE, ARISING OUT OF, OR IN ANY
WAY CONNECTED WITH, OR AS A RESULT OF (1) THE EXECUTION OR PERFORMANCE OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, (2) ANY VIOLATION BY THE BORROWER OR ANY
OF ITS SUBSIDIARIES OR ANY AFFILIATES OF ANY LAWS, INCLUDING WITHOUT LIMITATION
ENVIRONMENTAL LAWS, OR ANY ENVIRONMENTAL CLAIM AGAINST ANY INDEMNITEE, (3) ANY
FAILURE BY THE BORROWER OR ANY OF ITS SUBSIDIARIES TO COMPLY WITH ANY COVENANT
OR AGREEMENT CONTAINED IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, (4) ANY
MISREPRESENTATION BY THE BORROWER OR ITS SUBSIDIARIES UNDER THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENTS OR (5) THE USE OR CONTEMPLATED USE OF THE PROCEEDS OF
ANY CREDIT EXTENSION; (b) ANY ADMINISTRATIVE OR INVESTIGATIVE PROCEEDING BY ANY
GOVERNMENTAL AUTHORITY ARISING OUT OF OR RELATED TO A CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION DESCRIBED IN SUBSECTION (a) ABOVE; AND (c) ANY AND ALL
LIABILITIES (INCLUDING LIABILITIES UNDER INDEMNITIES), LOSSES, COSTS OR EXPENSES
(INCLUDING ATTORNEY COSTS) THAT ANY INDEMNITEE SUFFERS OR INCURS AS A RESULT OF
THE ASSERTION OF ANY FOREGOING CLAIM, DEMAND, ACTION, CAUSE OF ACTION OR
PROCEEDING, OR AS A RESULT OF THE PREPARATION OF ANY DEFENSE IN CONNECTION WITH
ANY FOREGOING CLAIM, DEMAND, ACTION, CAUSE OF ACTION OR PROCEEDING, IN ALL
CASES, WHETHER OR NOT ARISING OUT OF THE NEGLIGENCE OF AN INDEMNITEE, AND,
WHETHER OR NOT AN INDEMNITEE IS A PARTY TO SUCH CLAIM, DEMAND, ACTION, CAUSE OF
ACTION OR PROCEEDING (ALL THE FOREGOING, COLLECTIVELY, THE "INDEMNIFIED
LIABILITIES"); PROVIDED THAT NO INDEMNITEE SHALL BE ENTITLED TO INDEMNIFICATION
FOR (i) ANY CLAIM CAUSED BY ITS OWN GROSS NEGLIGENCE, BAD FAITH OR WILLFUL
MISCONDUCT, AS FINALLY JUDICIALLY DETERMINED BY A COURT OF COMPETENT
JURISDICTION OR (ii) FOR ANY LOSS ASSERTED AGAINST IT BY ANOTHER INDEMNITEE. THE
FOREGOING INDEMNITY SHALL APPLY TO THE NEGLIGENCE OF THE INDEMNITEE (BUT NOT THE
GROSS NEGLIGENCE, BAD FAITH OR WILLFUL MISCONDUCT OF THE INDEMNITEE). THE
AGREEMENTS IN THIS SECTION SHALL SURVIVE THE TERMINATION OF THE REVOLVING
COMMITMENTS AND REPAYMENT OF ALL THE OTHER OBLIGATIONS.

      (b) EACH INDEMNITEE AGREES WITH RESPECT TO ANY ACTION AGAINST IT IN
RESPECT OF WHICH INDEMNITY MAY BE SOUGHT UNDER THIS SECTION 10.05, THAT SUCH
INDEMNITEE WILL GIVE WRITTEN NOTICE OF THE COMMENCEMENT OF SUCH ACTION TO THE
BORROWER WITHIN A REASONABLE TIME AFTER SUCH INDEMNITEE IS MADE A PARTY TO SUCH
ACTION. UPON RECEIPT OF ANY SUCH NOTICE BY THE BORROWER, THE BORROWER, UNLESS
SUCH INDEMNITEE SHALL BE ADVISED BY ITS COUNSEL THAT THERE ARE OR MAY BE LEGAL
DEFENSES AVAILABLE TO SUCH INDEMNITEE THAT ARE

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DIFFERENT FROM, IN ADDITION TO, OR IN CONFLICT WITH, THE DEFENSES AVAILABLE TO
THE BORROWER, MAY PARTICIPATE WITH THE INDEMNITEE IN THE DEFENSE OF SUCH
INDEMNIFIED MATTER, INCLUDING THE EMPLOYMENT OF COUNSEL CONSENTED TO BY SUCH
INDEMNITEE (WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD); PROVIDED,
HOWEVER, NOTHING PROVIDED HEREIN SHALL (i) ENTITLE THE BORROWER TO ASSUME THE
DEFENSE OF SUCH INDEMNIFIED MATTER OR (ii) REQUIRE THE CONSENT OF THE BORROWER
FOR ANY SETTLEMENT OR ACTION IN RESPECT OF SUCH INDEMNIFIED MATTER, ALTHOUGH
EACH INDEMNITEE AGREES TO CONFER AND CONSULT WITH THE BORROWER BEFORE MAKING ANY
SETTLEMENT OF SUCH INDEMNIFIED MATTER.

      10.06 PAYMENTS SET ASIDE. To the extent that the Borrower makes a payment
to the Administrative Agent or any Lender, or the Administrative Agent or any
Lender exercises its right of set-off, and such payment or the proceeds of such
set-off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share of any amount so recovered from or repaid by the Administrative
Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time to
time in effect.

      10.07 SUCCESSORS AND ASSIGNS.

      (a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Indemnitees) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

      (b) Any Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Revolving Commitment and the Loans (including for purposes of
this subsection (b), participations in L/C Obligations and in Swing Line Loans)
at the time owing to it); provided that (i) except in the case of an assignment
of the entire remaining amount of the assigning Lender's Revolving Commitment
and the Loans at the time owing to it or in the case of an assignment to a
Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender,
the aggregate amount of the Revolving Commitment (which for this purpose
includes Loans outstanding thereunder) subject to each such assignment,
determined as of the date the Assignment and Acceptance with

                                       79


respect to such assignment is delivered to the Administrative Agent, shall not
be less than $5,000,000 unless each of the Administrative Agent and, so long as
no Event of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed), (ii)
each partial assignment shall be made as an assignment of a proportionate part
of all the assigning Lender's rights and obligations under this Agreement with
respect to the Loans or the Revolving Commitments assigned, except that this
clause (ii) shall not apply to rights in respect of outstanding Swing Line
Loans, (iii) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500 (provided no such fee shall be required for an
assignment to an Affiliate of a Lender) and (iv) in the case of an assignment to
an Affiliate of a Lender or to an Approved Fund, the assigning Lender shall
ensure that all of the Borrower's dealings with the assignee shall be conducted
through the same Lender. Subject to acceptance and recording thereof by the
Administrative Agent pursuant to subsection (c) of this Section, from and after
the effective date specified in each Assignment and Acceptance, the Eligible
Assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 3.07 (which accrued to such Lender
prior to such assignment), 10.04 and 10.05 hereof). Upon request and at no
expense to the Borrower, the Borrower shall execute and deliver new or
replacement Notes to the assigning Lender and the assignee Lender. Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this subsection shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with subsection (d) of this Section.

      (c) The Administrative Agent, acting solely for this purpose as an agent
of the Borrower, shall maintain at the Administrative Agent's Office 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 Revolving
Commitments of, and principal amount 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 Borrower, the
Administrative Agent and the Lenders may 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 Borrower and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.

      (d) Any Lender may, without the consent of, or notice to, the Borrower or
the Administrative Agent, sell participations to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and/or
obligations under this Agreement (including all or a portion of its Revolving
Commitments and/or the Loans (including such Lender's participations in L/C
Obligations and/or Swing Line Loans) owing to it); provided that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the

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Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, waiver or other modification
that would (i) postpone any date upon which any payment of money is scheduled to
be paid to such Participant, (ii) reduce the principal, interest, fees or other
amounts payable to such Participant, or (iii) release any Guarantor from the
Guaranty except as permitted under Section 9.10. Subject to subsection (e) of
this Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 hereof to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to subsection (b)
of this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.09 hereof as though it were a Lender,
provided such Participant agrees to be subject to Section 2.13 hereof as though
it were a Lender.

      (e) A Participant shall not be entitled to receive any greater payment
under Section 3.01, 3.02 or 3.04 hereof than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower's prior written consent. A Participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of Section 3.01
hereof unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to
comply with Section 10.15 hereof as though it were a Lender.

      (f) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement (including under its Notes, if
any) to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank, without the requirement for notice
to or consent of any Person or the payment of any fee; provided that no such
pledge or assignment shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

      (g) As used herein, the following terms have the following meanings:

      "Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender; (c)
      an Approved Fund; and (d) any other Person (other than a natural person)
      approved by the Administrative Agent, each L/C Issuer, the Swing Line
      Lender and, unless (x) such Person is taking delivery of an assignment in
      connection with physical settlement of a credit derivative transaction or
      (y) an Event of Default has occurred and is continuing, the Borrower (each
      such approval not to be unreasonably withheld or delayed).

      "Fund" means any Person (other than a natural person) that is (or will be)
      engaged in making, purchasing, holding or otherwise investing in
      commercial loans and similar extensions of credit in the ordinary course
      of its business.

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      "Approved Fund" means any Fund that is administered or managed by (a) a
      Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
      an entity that administers or manages a Lender.

      (h) Notwithstanding anything to the contrary contained herein, if at any
time the Administrative Agent, acting in its capacity as a Lender, assigns all
of its Revolving Commitment and Loans pursuant to subsection (b) above, the
Administrative Agent may, and shall if requested by the Borrower, (i) upon 30
days' notice to the Borrower and the Lenders, resign as a L/C Issuer and/or (ii)
upon five Business Days' notice to the Borrower and the Lenders, terminate the
Swing Line. In the event of any such termination of the Swing Line, the Borrower
shall be entitled to appoint from among the Lenders a successor Swing Line
Lender hereunder and upon acceptance of such appointment the Swing Line shall
automatically be reinstated and such appointed Lender shall automatically assume
all the rights and obligations of the Swing Line Lender hereunder; provided,
however, that no failure by the Borrower to appoint any such successor shall
affect the termination of the Swing Line, as the case may be. The resigning L/C
Issuer shall retain all the rights and obligations of a L/C Issuer hereunder
with respect to all Letters of Credit issued by it that are outstanding as of
the effective date of its resignation as a L/C Issuer and all L/C Obligations
with respect thereto (including the right to require the Lenders to make Base
Rate Loans or fund participations in Unreimbursed Amounts pursuant to Section
2.03(c) hereof); provided that a successor L/C Issuer shall issue letters of
credit in substitution for the Letters of Credit, if any, outstanding at the
time of such resignation or make other arrangement satisfactory to the retiring
L/C Issuer to effectively assume the obligations of the retiring L/C Issuer with
respect to such Letters of Credit. If the resigning Administrative Agent, acting
in its capacity as a Swing Line Lender, terminates its Swing Line, it shall
retain all the rights of the Swing Line Lender provided for hereunder with
respect to Swing Line Loans made by it and outstanding as of the effective date
of such termination, including the right to require the Lenders to make Base
Rate Loans or fund participations in outstanding Swing Line Loans pursuant to
Section 2.04(c) hereof.

      10.08 CONFIDENTIALITY. Each of the Administrative Agent and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
required to keep such Information confidential) with respect to the monitoring
and administration of this Agreement or any other Loan Documents; (b) to the
extent required by any regulatory authority; (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process; (d)
to any other party to this Agreement; (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder; (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any Eligible
Assignee of or Participant in, or any prospective Eligible Assignee of or
Participant in, any of its rights or obligations under this Agreement or (ii)
any direct or indirect contractual counterparty or prospective counterparty (or
such contractual counterparty's or prospective counterparty's professional
advisor) to any credit derivative transaction relating to obligations of the
Borrower; (g) with the written consent of the Borrower; (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent or any Lender

                                       82


on a nonconfidential basis from a source other than the Borrower; or (i) only to
the extent required, to the National Association of Insurance Commissioners or
any other similar organization or any nationally recognized rating agency that
requires access to information about a Lender's or its Affiliates' investment
portfolio in connection with ratings issued with respect to such Lender or its
Affiliates. For the purposes of this Section, "Information" means all
information received from the Borrower relating to the Borrower, its Affiliates
or their respective businesses, other than any such information that is
available to the Administrative Agent or any Lender on a nonconfidential basis
prior to disclosure by the Borrower; provided that, in the case of information
received from the Borrower after the date hereof, such information is clearly
identified at the time of disclosure as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligations to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential Information.

      10.09 SET-OFF. In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence and during the continuance of any Event of
Default, each Lender is authorized at any time and from time to time, without
prior notice to the Borrower or any other Loan Party, any such notice being
waived by the Borrower (on its own behalf and on behalf of each Loan Party) to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special (except trust and escrow accounts), time or demand,
provisional, final or otherwise) at any time held by, and other indebtedness at
any time owing by, such Lender to or for the credit or the account of the
respective Loan Parties against any and all Obligations owing to such Lender,
now or hereafter existing, irrespective of whether or not the Administrative
Agent or such Lender shall have made demand under this Agreement or any other
Loan Document and although such Obligations may be contingent or unmatured. Each
Lender agrees promptly to notify the Borrower and the Administrative 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.

      10.10 INTEREST RATE LIMITATION. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the Highest Lawful Rate. If the Administrative
Agent or any Lender shall receive interest in an amount that exceeds the Highest
Lawful Rate, the excess interest shall be applied to the principal of the Loans
or, if it exceeds such unpaid principal, refunded to the Borrower. In
determining whether the interest contracted for, charged, or received by the
Administrative Agent or a Lender exceeds the Highest Lawful Rate, such Person
may, to the extent permitted by applicable Law, (a) characterize any payment
that is not principal as an expense, fee, or premium rather than interest, (b)
exclude voluntary prepayments and the effects thereof, and (c) amortize,
prorate, allocate, and spread in equal or unequal parts the total amount of
interest throughout the contemplated term of the Obligations.

      10.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. A counterpart hereof (or
signature page thereto) signed and transmitted by any Person party hereto to the
Administrative Agent (or its counsel) by facsimile machine, telecopier or
electronic mail is to be treated as an original. The signature of such Person
thereon, for

                                       83


purposes hereof, is to be considered as an original signature, and the
counterpart (or signature page thereto) so transmitted is to be considered to
have the same binding effect as an original signature on an original document.

      10.12 INTEGRATION. In the event of any conflict between the provisions of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control; provided that the inclusion of supplemental rights or
remedies in favor of the Administrative Agent or the Lenders in any other Loan
Document shall not be deemed a conflict with this Agreement. Each Loan Document
was drafted with the joint participation of the respective parties thereto and
shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.

      10.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default or Event of Default at the time of any Credit Extension, and shall
continue in full force and effect as long as any Loan or any other Obligation
shall remain unpaid or unsatisfied or any Letter of Credit shall remain
outstanding.

      10.14 SEVERABILITY. Any provision of this Agreement and the other Loan
Documents to which the Borrower is a party that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions thereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

      10.15 FOREIGN LENDERS. Each Lender that is a "foreign corporation,
partnership or trust" within the meaning of the Code (a "Foreign Lender") shall
deliver to the Administrative Agent, prior to receipt of any payment subject to
withholding under the Code (or after accepting an assignment of an interest
herein), two duly signed completed copies of either IRS Form W-8BEN or any
successor thereto (relating to such Person and entitling it to an exemption
from, or reduction of, withholding tax on all payments to be made to such Person
by the Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor
thereto (relating to all payments to be made to such Person by the Borrower
pursuant to this Agreement) or such other evidence satisfactory to the Borrower
and the Administrative Agent that such Person is entitled to an exemption from,
or reduction of, U.S. withholding tax. Thereafter and from time to time, each
such Person shall (a) promptly submit to the Administrative Agent such
additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United
States taxing authorities) as may then be available under then current United
States laws and regulations to avoid, or such evidence as is satisfactory to the
Borrower and the Administrative Agent of any available exemption from or
reduction of, United States withholding taxes in respect of all payments to be
made to such Person by the Borrower pursuant to this Agreement, (b) promptly
notify the Agent of any change in circumstances which

                                       84


would modify or render invalid any claimed exemption or reduction, and (c) take
such steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Lender, and as may be reasonably necessary (including the
re-designation of its Lending Office) to avoid any requirement of applicable
Laws that the Borrower make any deduction or withholding for taxes from amounts
payable to such Person. If such Person fails to deliver the above forms or other
documentation, then the Administrative Agent may withhold from any interest
payment to such Person an amount equivalent to the applicable withholding tax
imposed by Sections 1441 and 1442 of the Code, without reduction. If any
Governmental Authority asserts that the Administrative Agent did not properly
withhold any tax or other amount from payments made in respect of such Person,
such Person shall indemnify the Administrative Agent therefore, including all
penalties and interest, any taxes imposed by any jurisdiction on the amounts
payable to the Agent under this Section, and costs and expenses (including
Attorney Costs) of the Administrative Agent. The obligation of the Lenders under
this Section shall survive the payment of all Obligations and the resignation or
replacement of the Administrative Agent.

      10.16 REMOVAL AND REPLACEMENT OF LENDERS.

      (a) Under any circumstances set forth herein providing that the Borrower
shall have the right to remove or replace a Lender as a party to this Agreement,
the Borrower may, upon notice to such Lender and the Administrative Agent, (i)
remove such Lender by terminating such Lender's Revolving Commitments or (ii)
replace such Lender by causing such Lender to assign its Revolving Commitments
(without payment of any assignment fee) pursuant to Section 10.07(b) hereof to
one or more other Lenders or Eligible Assignees procured by the Borrower;
provided, however, that if the Borrower elects to exercise such right with
respect to any Lender pursuant to Section 3.06(b) hereof, it shall be obligated
to remove or replace, as the case may be, all Lenders that have made similar
requests for compensation pursuant to Section 3.01, 3.02 or 3.04 hereof. In such
event, the Borrower shall (x) pay in full all principal, interest, fees and
other amounts owing to such Lender through the date of termination or assignment
(including any amounts payable pursuant to Section 3.05 hereof), (y) provide
appropriate assurances and indemnities (which may include letters of credit) to
each L/C Issuer and the Swing Line Lender as each may reasonably require with
respect to any continuing obligation to purchase participation interests in any
L/C Obligations or any Swing Line Loans then outstanding, and (z) release such
Lender from its obligations under the Loan Documents. Any Lender being replaced
shall execute and deliver an Assignment and Acceptance with respect to such
Lender's Revolving Commitments and outstanding Credit Extensions. The
Administrative Agent shall distribute an amended Schedule 2.01, which shall be
deemed incorporated into this Agreement, to reflect changes in the identities of
the Lenders and adjustments of their respective Revolving Commitments and/or Pro
Rata Shares resulting from any such removal or replacement.

      (b) In order to make all the Lenders' interests in any outstanding Credit
Extensions ratable in accordance with any revised Pro Rata Shares after giving
effect to the removal or replacement of a Lender, the Borrower shall pay or
prepay, if necessary, on the effective date thereof, all outstanding Loans of
all Lenders, together with any amounts due under Section 3.05 hereof. The
Borrower may then request Loans from the Lenders in accordance with their
revised Pro Rata Shares. The Borrower may net any payments required hereunder
against any funds being provided by any Lender or Eligible Assignee replacing a
terminating Lender. The effect

                                       85


for purposes of this Agreement shall be the same as if separate transfers of
funds had been made with respect thereto.

      (c) This Section shall supersede any provision in Section 10.01 hereof to
the contrary.

      10.17 EXCEPTIONS TO COVENANTS. Neither the Borrower nor any Subsidiary
shall be deemed to be permitted to take any action or fail to take any action
which is permitted as an exception to any of the covenants contained herein or
which is within the permissible limits of any of the covenants contained herein
if such action or omission would result in the breach of any other covenant
contained herein.

      10.18 GOVERNING LAW.

      (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF TEXAS APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE; PROVIDED THAT EACH PARTY SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.

      (b) The parties hereto agree that Chapter 346 (other than 346.004) of the
Texas Finance Code (which regulates certain revolving credit accounts and
revolving tri-party accounts) shall not apply to Loans under this Agreement.

      (c) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS SITTING
IN DALLAS COUNTY, TEXAS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF TEXAS (DALLAS DIVISION), AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN
DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE
AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH
STATE.

      10.19 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER

                                       86


ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

      10.20 USA PATRIOT ACT NOTICE. Each Lender and the Administrative Agent
(for itself and not on behalf of any Lender) hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the "Act"), it is required to obtain,
verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information required by
the Act or any regulation promulgated pursuant to the Act that will allow such
Lender or the Administrative Agent, as applicable, to identify the Borrower in
accordance with the Act

      10.21 AMENDMENT, RESTATEMENT, EXTENSION, RENEWAL AND INCREASE. This
Agreement is an amendment, restatement, extension, renewal and increase of the
Existing Credit Agreement, and, as such, except for the "Obligations" as defined
in the Existing Credit Agreement (which shall survive to the extent renewed and
restated by the terms of this Agreement), all other terms and provisions of this
Agreement supersede in their entirety the Existing Credit Agreement.

      10.22 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

                   REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

                                       87


      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

                                        CASH AMERICA INTERNATIONAL, INC.

                                        By: /s/ David J. Clay
                                            ----------------------------
                                            David J. Clay
                                            Vice President and Treasurer

                                       88


                                        WELLS FARGO BANK, NATIONAL
                                        ASSOCIATION, as Administrative Agent

                                        By: /s/ Daniel T. Brown
                                            --------------------------------
                                            Name: Daniel T. Brown
                                            --------------------------------
                                            Title: Vice President
                                            --------------------------------

                                        WELLS FARGO BANK, NATIONAL
                                        ASSOCIATION, as an L/C Issuer, a Lender
                                        and Swing Line Lender

                                        By: /s/ Daniel T. Brown
                                            --------------------------------
                                            Name: Daniel T. Brown
                                            --------------------------------
                                            Title: Vice President
                                            --------------------------------


                                       89


                                       JPMORGAN CHASE BANK, N.A., as Syndication
                                       Agent and a Lender

                                        By: /s/ Robert Humphreys
                                            --------------------------------
                                            Name: Robert Humphreys
                                            --------------------------------
                                            Title: Vice President
                                            --------------------------------


                                       90


                                        U. S. BANK NATIONAL ASSOCIATION, as a
                                        Co-Documentation Agent and a Lender

                                        By: /s/ John Holland
                                            --------------------------------
                                            Name: John Holland
                                            --------------------------------
                                            Title: Senior Vice President
                                            --------------------------------
                                       91


                                        KEYBANK NATIONAL ASSOCIATION, as a Co-
                                        Documentation Agent and a Lender

                                        By: /s/ Joanne Bramanti
                                            --------------------------------
                                            Name: Joanne Bramanti
                                            --------------------------------
                                            Title: Senior Vice President
                                            --------------------------------


                                       92


                                        UNION BANK OF CALIFORNIA, N.A., as a Co-
                                        Documentation Agent and a Lender

                                        By: /s/ Albert W. Kelley
                                            --------------------------------
                                            Name: Albert W. Kelley
                                            --------------------------------
                                            Title: Vice President
                                            --------------------------------

                                       93


                                        THE HUNTINGTON NATIONAL BANK, as a
                                        Lender

                                        By: /s/ Cheryl L. Razon
                                            ------------------------------------
                                            Name: Cheryl L. Razon
                                                  ------------------------------
                                            Title: Assistant Vice President
                                                   -----------------------------


                                       94


                                        FIRST TENNESSEE BANK NATIONAL
                                        ASSOCIATION, as a Lender

                                        By: /s/ Stephen R. Deaton
                                            ------------------------------------
                                            Name: Stephen R. Deaton
                                                  ------------------------------
                                            Title: Senior Vice President
                                                   -----------------------------


                                       95


                                        SOUTHWEST BANK OF TEXAS, N.A., as a
                                        Lender

                                        By: /s/ Melinda N. Jackson
                                            ------------------------------------
                                            Name: Melinda N. Jackson
                                                  ------------------------------
                                            Title: Senior Vice President
                                                   -----------------------------


                                       96


                                        BANK OF TEXAS, N.A., as a Lender

                                        By: /s/ Eric L. Kraft
                                            ------------------------------------
                                            Name:  Eric L. Kraft
                                                  ------------------------------
                                            Title:  Vice President
                                                   -----------------------------


                                       97


                                        TEXAS CAPITAL BANK, N.A., as a Lender

                                        By: /s/ Barry Kromann
                                            ------------------------------------
                                            Name: Barry Kromann
                                                  ------------------------------
                                            Title: _____________________________

                                       98

EX-21

EXHIBIT 21

SUBSIDIARIES OF CASH AMERICA INTERNATIONAL, INC.

	Jurisdiction of
Subsidiaries	Incorporation
Cash America International, Inc.	Texas
Cash America, Inc.	Delaware
Cash America, Inc. of Louisiana	Delaware
RATI Holding, Inc.	Texas
Cash America, Inc. of Tennessee	Tennessee
Cash America, Inc. of Oklahoma	Oklahoma
Cash America, Inc. of South Carolina	South Carolina
Florida Cash America, Inc.	Florida
Georgia Cash America, Inc.	Georgia
Cash America, Inc. of North Carolina	North Carolina
Cash America Pawn, Inc. of Ohio	Ohio
Cash America, Inc. of Alabama	Alabama
Cash America, Inc. of Colorado	Colorado
Cash America, Inc. of Indiana	Indiana
Cash America Pawn L.P.	Delaware
Cash America Management L.P.	Delaware
Cash America Holding, Inc.	Delaware
Express Cash International Corporation	Delaware
Cash America of Missouri, Inc.	Missouri
Vincent’s Jewelers and Loan, Inc.	Missouri
Mr. Payroll Corporation	Delaware
Cash America, Inc. of Utah	Utah
Cash America Franchising, Inc.	Delaware
Cash America Financial Services, Inc.	Delaware
Cash America, Inc. of Illinois	Illinois
Uptown City Pawners, Inc.	Illinois
Doc Holliday’s Pawnbrokers & Jewelers, Inc.	Delaware
Longhorn Pawn and Gun, Inc.	Texas
Bronco Pawn and Gun, Inc.	Oklahoma
Gamecock Pawn and Gun, Inc.	South Carolina
Hornet Pawn and Gun, Inc.	North Carolina
Tiger Pawn and Gun, Inc.	Tennessee
Cashland Financial Services, Inc.	Delaware
Cash America, Inc. of Kentucky	Kentucky
Cash America Advance, Inc.	Delaware
Cash America, Inc. of Nevada	Nevada

EX-23

EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 33-29658, 33-36430, 33-59733, 333-95827 and 333-97273) of Cash America International, Inc. of our reports dated February 24, 2005 relating to the financial statements, financial statement schedule, management’s assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting, which appear in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Fort Worth, Texas
February 24, 2005

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Daniel R. Feehan, certify that:

1.   I have reviewed this report on Form 10-K of Cash America International, Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonable likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 25, 2005

/s/ Daniel R. Feehan

Daniel R. Feehan

Chief Executive Officer and President

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Thomas A. Bessant, Jr., certify that:

1.	I have reviewed this report on Form 10-K of Cash America International, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonable likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 25, 2005

/s/ Thomas A. Bessant, Jr.

Thomas A. Bessant, Jr.

Executive Vice President and

Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Annual Report of Cash America International, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2004, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Daniel R. Feehan, Chief Executive Officer and President of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Daniel R. Feehan

Daniel R. Feehan

Chief Executive Officer and President

Date: February 25, 2005

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Annual Report of Cash America International, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2004, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas A. Bessant, Jr, Executive Vice President - Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Thomas A. Bessant, Jr.

Thomas A. Bessant, Jr.

Executive Vice President and Chief Financial Officer

Date: February 25, 2005