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EXHIBIT 10.2
FIRST SUPPLEMENT TO 1995 NOTE AGREEMENT
This First Supplement to 1995 Note Agreement (the "First Supplement") is
made and entered into as of the 10th day of November, 1995, by and between Cash
America International, Inc. (the "Company") and Teachers Insurance and Annuity
Association of America ("Teachers").
RECITALS
WHEREAS, the parties hereto have entered into a Note Agreement dated as of
July 7, 1995, pursuant to which the Company issued and Teachers purchased
$20,000,000 aggregate principal amount of the Company's 8.14% Senior Notes Due
July 7, 2007 (said Note Agreement being referred to hereafter as the "Note
Agreement"); and
WHEREAS, the Company and Teachers desire to provide for Teachers' consent
to a change in accounting method by the Company and to amend certain provisions
of the Note Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Teachers hereby agree as follows:
1. Consent to Change in Accounting Method. The Company has informed
Teachers that the Company proposes to change its method of income recognition
on pawn loans, with the change to be effective as of January 1, 1995. Under
the new method, the Company accrues pawn service charges on a constant yield
basis over the loan term for those loans with respect to which the Company
deems collection to be probable. (The determination of probability of
collection is based on historical statistics for loan redemptions.) For loans
not repaid, the carrying value of the forfeited collateral (inventory) is the
lower of cost (the principal amount advanced) or market. Under the old method,
pawn service charges were accrued on all loans on a constant yield basis over
the loan term. If a loan was not repaid, the principal amount advanced plus
accrued pawn service charges became the carrying value of the forfeited
collateral. Teachers hereby consents to the Company's change in its method of
income recognition as described above, and, to the extent that such change
would otherwise constitute a violation of Section 9.17 of the Note Agreement,
Teachers hereby irrevocably and permanently waives any such violation and
agrees that such change shall in no event constitute a Default or Event of
Default at any time.
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2. Amendment to Section 9.02 of the Note Agreement. Section 9.02 of the
Note Agreement is hereby amended to read in its entirety as follows:
SECTION 9.02. Consolidated Tangible Net Worth. The Company will
not permit Consolidated Tangible Net Worth at any time to be less than
the sum of (a) $71,000,000 plus (b) 50% of Consolidated Adjusted Net
Income (but only if positive) for each Fiscal Quarter ending after
December 31, 1992.
3. Amendment to Section 9.04 of the Note Agreement. Section 9.04 of the
Note Agreement is hereby amended to read in its entirety as follows:
SECTION 9.04. Current Assets to Total Indebtedness Ratio. The
Company will not permit the ratio of (a) Consolidated Current Assets
to (b) Consolidated Current Liabilities plus Consolidated Funded Debt
to be less than 1.10 to 1 as of the last day of any Fiscal Quarter
commencing on or after January 1, 1995. As used in this Section 9.04,
"Consolidated Funded Debt" means, at any time, Consolidated
Indebtedness for Money Borrowed at such time, provided that in no
event shall Consolidated Funded Debt include any obligation included
in Consolidated Current Liabilities.
4. Amendment to Section 9.06 of the Note Agreement. Section 9.06 of the
Note Agreement is hereby amended to read in its entirety as follows:
SECTION 9.06. Fixed Charge Coverage. The Company will not at
any time permit the ratio of (a) the sum of Consolidated Adjusted Net
Income for the Computation Period plus the aggregate amount of all
taxes, rents, leases and interest expenses deducted from gross income
to obtain such Consolidated Adjusted Net Income to (b) the aggregate
amount of all such taxes, rents, leases and interest expenses so
deducted to be less than (i) 1.8 to 1 if the Computation Period ends
on or before December 31, 1995, (ii) 1.85 to 1 if the Computation
Period ends after December 31, 1995 but on or before December 31,
1996, and (iii) 1.9 to 1 if the Computation Period ends after December
31, 1996. As used in this Section 9.06, "Computation Period" means,
at any time, the period of four consecutive Fiscal Quarters ended on
the date of the most recent balance sheet delivered (or required to be
delivered) by the Company pursuant to clause (a) or (b) of Section
8.01. For purposes of this Section 9.06, the charge of $19,772,000
against the Company's First Quarter 1995 earnings for the cumulative
effect (through December 31, 1994) of the change in its accounting
method shall be excluded from the computation of Consolidated Adjusted
Net Income.
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5. Amendment to Section 9.07 of the Note Agreement. Paragraph (a) of
Section 9.07 of the Note Agreement is hereby amended to read in its entirety as
follows:
(a) The Company will not, and will not permit any Subsidiary to,
(i) declare or make any dividends or distributions on any of its Stock
(other than dividends payable in shares of its Stock), (ii) purchase,
redeem or acquire for value any of the Company's or any Subsidiary's
Stock, (iii) make any principal payment on (or make any payment,
transfer or deposit for the purpose of canceling, extinguishing,
satisfying or defeasing) any indebtedness of the Company which is
subordinate in right of payment to the Notes or any other Obligation,
(iv) set aside funds for any such purposes or (v) become liable to do
any of the foregoing (in each case, a "Restricted Payment") unless,
immediately after giving effect thereto, (A) no Default shall exist
and (B) the aggregate amount of all Restricted Payments made by the
Company and all Subsidiaries since May 1, 1993 does not exceed 20% of
Consolidated Adjusted Net Income for the period commencing on January
1, 1992. For purposes of this Section 9.07, the charge of $19,772,000
against the Company's First Quarter 1995 earnings for the cumulative
effect (through December 31, 1994) of the change in its accounting
method shall be excluded from the computation of Consolidated Adjusted
Net Income.
6. Definitions. All capitalized terms used herein and not otherwise
specifically defined shall have the respective meanings set forth in the Note
Agreement.
7. Ratification of Note Agreement. Except as specified hereinabove, all
other terms of the Note Agreement shall remain unchanged and are hereby
ratified and confirmed. All references to "this Agreement" or "the Agreement"
appearing in the Note Agreement, and all reference to the Note Agreement
appearing in any other instrument or document, shall be deemed to refer to the
Note Agreement as supplemented and amended by this First Supplement.
8. Counterparts. This First Supplement may be executed in any number of
counterparts and by the parties hereto on separate counterparts, each of which
when so executed and delivered shall be an original, but all the counterparts
shall together constitute one and the same instrument.
By signing below where indicated, the undersigned, CASH AMERICA, INC. OF
SOUTH CAROLINA, FLORIDA CASH AMERICA, INC., XXXXXXX XXXX AMERICA, INC., CASH
AMERICA, INC. OF LOUISIANA, CASH AMERICA, INC. OF NORTH CAROLINA, CASH AMERICA,
INC. OF TENNESSEE, CASH AMERICA, INC. OF OKLAHOMA, CASH AMERICA, INC. OF
KENTUCKY, CASH AMERICA PAWN, INC. OF OHIO, CASH AMERICA MANAGEMENT L.P., CASH
AMERICA PAWN L.P., CASH AMERICA HOLDING, INC., EXPRESS CASH INTERNATIONAL
CORPORATION, CASH AMERICA, INC. OF ALABAMA, CASH AMERICA, INC. OF COLORADO,
CASH AMERICA, INC. OF INDIANA, CASH AMERICA, INC., CASH AMERICA OF MISSOURI,
INC., and VINCENT'S JEWELERS AND LOAN, INC., as Guarantors, do each acknowledge
and approve the Note Agreement, as amended by this First Supplement, and the
other Loan Documents, and the terms thereof, and specifically agree to comply
with all provisions therein and herein which refer to or affect such
Guarantors.
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IN WITNESS WHEREOF, the undersigned have executed this First Supplement to
1995 Note Agreement as of the date first written above.
CASH AMERICA INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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Xxxxxx X. Xxxxxxx, Xx., Vice President
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Director
Private Placements
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GUARANTORS
CASH AMERICA, INC. OF SOUTH CAROLINA
FLORIDA CASH AMERICA, INC.
XXXXXXX XXXX AMERICA, INC.
CASH AMERICA, INC. OF LOUISIANA
CASH AMERICA, INC. OF NORTH CAROLINA
CASH AMERICA, INC. OF TENNESSEE
CASH AMERICA, INC. OF OKLAHOMA
CASH AMERICA, INC. OF KENTUCKY
CASH AMERICA PAWN, INC. OF OHIO
CASH AMERICA MANAGEMENT L.P., a Delaware limited partnership, by its
general partner, Cash America Holding, Inc.
CASH AMERICA PAWN L.P., a Delaware limited partnership, by its general
partner, Cash America Holding, Inc.
CASH AMERICA HOLDING, INC.
EXPRESS CASH INTERNATIONAL CORPORATION
CASH AMERICA, INC. OF ALABAMA
CASH AMERICA, INC. OF COLORADO
CASH AMERICA, INC. OF INDIANA
CASH AMERICA, INC.
CASH AMERICA OF MISSOURI, INC.
VINCENT'S JEWELERS AND LOAN, INC.
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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Xxxxxx X. Xxxxxxx, Xx., Vice President for All
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