Exhibit 10.9
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CREDIT AGREEMENT
by and among
CONN APPLIANCES, INC.,
and the other Borrowers Hereunder,
The Lenders Party Hereto
and
JPMORGAN CHASE BANK
as Administrative Agent
and
BANK OF AMERICA, N.A.,
as Syndication Agent
SUNTRUST BANK,
as Documentation Agent
----------
JPMORGAN CHASE SECURITIES INC.,
as Arranger
April 24, 2003
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TABLE OF CONTENTS
Page
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ARTICLE I Certain Definitions ..............................................1
SECTION 1.01. Defined Terms ..............................................1
SECTION 1.02. Classification of Loans and Borrowings ....................25
SECTION 1.03. Terms Generally ...........................................25
SECTION 1.04. Accounting Terms; GAAP ....................................25
ARTICLE II The Credits .....................................................26
SECTION 2.01. Term Commitments ..........................................26
SECTION 2.02. Revolving Commitments .....................................26
SECTION 2.03. Loans and Borrowings ......................................26
SECTION 2.04. Requests for Borrowings ...................................27
SECTION 2.05. Funding of Borrowings .....................................28
SECTION 2.06. Interest Elections ........................................28
SECTION 2.07. Termination and Reduction of Revolving Loan
Commitments ............................................29
SECTION 2.08. Repayment of Loans; Evidence of Debt ......................30
SECTION 2.09. Prepayment of Loans .......................................30
SECTION 2.10. Fees ......................................................31
SECTION 2.11. Interest ..................................................32
SECTION 2.12. Alternate Rate of Interest ................................33
SECTION 2.13. Increased Costs ...........................................33
SECTION 2.14. Break Funding Payments ....................................34
SECTION 2.15. Taxes .....................................................34
SECTION 2.16. Payments Generally; Pro Rata Treatment;
Sharing of Set-offs ....................................35
ARTICLE III Representations and Warranties ..................................37
SECTION 3.01. Organization; Powers.......................................37
SECTION 3.02. Authorization; Enforceability .............................37
SECTION 3.03. Governmental Approvals; No Conflicts ......................37
SECTION 3.04. Financial Condition; No Material Adverse Change............37
SECTION 3.05. Properties ................................................38
SECTION 3.06. Litigation and Environmental Matters ......................38
SECTION 3.07. Compliance with Laws and Agreements .......................39
SECTION 3.08. Investment and Holding Company Status......................39
SECTION 3.09. Taxes .....................................................39
SECTION 3.10. Public Utility Holding Company Act Not Applicable..........39
SECTION 3.11. Regulations G, U and X ....................................40
SECTION 3.12. ERISA .....................................................40
SECTION 3.13. Disclosure ................................................40
SECTION 3.14. Condition of Properties ...................................41
SECTION 3.15. Capital Structure .........................................41
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SECTION 3.16. Insurance .................................................42
SECTION 3.17. Solvency ..................................................42
SECTION 3.18. Indebtedness ..............................................42
ARTICLE IV Conditions ......................................................42
SECTION 4.01. Insurance .................................................42
SECTION 4.02. Payment of Expenses .......................................42
SECTION 4.03. Corporate Review ..........................................43
SECTION 4.04. Required Documents and Certificates .......................43
SECTION 4.05. Conditions Precedent to Each Loan .........................44
ARTICLE V Affirmative Covenants............................................45
SECTION 5.01. Financial Statements and Other Information ................45
SECTION 5.02. Notices of Material Events ................................47
SECTION 5.03. Existence; Conduct of Business ............................47
SECTION 5.04. Payment of Obligations ....................................47
SECTION 5.05. Maintenance of Properties; Insurance ......................48
SECTION 5.06. Books and Records; Inspection Rights ......................49
SECTION 5.07. Compliance with Laws ......................................49
SECTION 5.08. Use of Proceeds ...........................................50
SECTION 5.09. ERISA .....................................................50
SECTION 5.10. Security and Further Assurances ...........................50
SECTION 5.11. Compliance with Environmental Laws ........................51
SECTION 5.12. Landlord's Agreements .....................................51
SECTION 5.13. Additional Subsidiaries ...................................51
SECTION 5.14. Patents, Trademarks and Licenses ..........................53
SECTION 5.15. Notice of Labor Disputes ..................................53
SECTION 5.16. Fee Properties and Leases .................................53
SECTION 5.17. Lease and Investment Schedule .............................53
ARTICLE VI Negative Covenants ..............................................54
SECTION 6.01. Indebtedness ..............................................54
SECTION 6.02. Liens .....................................................55
SECTION 6.03. Fundamental Changes .......................................55
SECTION 6.04. Investments, Loans, Advances, Guarantees
and Acquisitions .......................................56
SECTION 6.05. Hedging Agreements ........................................56
SECTION 6.06. Restricted Payments .......................................56
SECTION 6.07. Transactions with Affiliates ..............................57
SECTION 6.08. Restrictive Agreements ....................................57
SECTION 6.09. Certain Contracts .........................................57
SECTION 6.10. Discount or Sale of Receivables ...........................58
SECTION 6.11. Change in Accounting Method ...............................58
SECTION 6.12. Sales and Leasebacks ......................................58
SECTION 6.13. Sale of Inventory .........................................58
SECTION 6.14. Nature of Business ........................................59
SECTION 6.15. Hazardous Materials .......................................59
SECTION 6.16. Amendment of Charter Documents ............................59
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SECTION 6.17. Use of Proceeds ...........................................59
SECTION 6.18. Debt Service Coverage Ratio ...............................59
SECTION 6.19. Total Leverage Ratio ......................................60
SECTION 6.20. Net Worth .................................................60
SECTION 6.21. Extension, Delinquencies, Charge-Offs .....................60
SECTION 6.22. Consolidated Capital Expenditures .........................61
SECTION 6.23. Prepayment of Indebtedness ................................61
SECTION 6.24. Issuance of Shares ........................................61
ARTICLE VII Events of Default ...............................................61
ARTICLE VIII The Administrative Agent ........................................64
SECTION 8.01. INDEMNIFICATION ...........................................66
ARTICLE IX Miscellaneous ...................................................67
SECTION 9.01. Notices 67
SECTION 9.02. Waivers; Amendments .......................................67
SECTION 9.03. Expenses; Indemnity; Damage Waiver ........................68
SECTION 9.04. Successors and Assigns ....................................70
SECTION 9.05. Survival ..................................................72
SECTION 9.06. Counterparts; Integration; Effectiveness ..................72
SECTION 9.07. Severability ..............................................72
SECTION 9.08. Right of Set-off ..........................................72
SECTION 9.09. Governing Law; Jurisdiction; Consent to
Service of Process .....................................73
SECTION 9.10. WAIVER OF JURY TRIAL ......................................73
SECTION 9.11. Headings ..................................................74
SECTION 9.12. Payments Set Aside ........................................74
SECTION 9.13. Loan Agreement Controls ...................................74
SECTION 9.14. FINAL AGREEMENT ...........................................74
SECTION 9.15. Interest Rate Limitation ..................................74
SECTION 9.16. Limitation of Liens .......................................75
SECTION 9.17. Amendment and Restatement .................................75
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SCHEDULES:
Schedule 2.01 - Term Loan Commitments
Schedule 2.02 - Revolving Loan Commitments
Section 3.05(a)(i) - Fee Properties
Section 3.05(a)(ii)- Leasehold Properties
Schedule 3.15(a) - Subsidiaries of CAI
Schedule 3.15(b) - Outstanding Shares of CAI; Identification of Xxxxxxxx Group
Schedule 3.15(c) - Permitted Disqualified Capital Stock
Schedule 3.16 - Insurance coverage
Schedule 3.17 - Existing Indebtedness
Schedule 6.08 - Restrictive Agreements Permitted
Schedule 6.09 - Certain Contracts Permitted
EXHIBITS:
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Borrowing Base Report
Exhibit C - Form of Landlord's Agreement
Exhibit D - Form of Borrowing Request
Exhibit E - Form of Interest Election Request
Exhibit F - Form of Term Note
Exhibit G - Form of Revolving Note
Exhibit H - Form of Compliance Certificate
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CREDIT AGREEMENT
This CREDIT AGREEMENT dated as of April 24, 2003 (the "Agreement"), is
entered into by and among CONN APPLIANCES, INC., a Texas corporation ("CAI"),
and CAI CREDIT INSURANCE AGENCY, INC., a Louisiana corporation ("Louisiana
Insurance Company") (CAI and Louisiana Insurance Company are each a "Borrower"
and collectively the "Borrowers"), the financial institutions listed on the
signature pages hereof (collectively, the "Lenders" and individually, a
"Lender"), JPMORGAN CHASE BANK, individually and as Administrative Agent for the
Lenders hereunder (the "Administrative Agent"), JPMORGAN CHASE SECURITIES, INC.,
as arranger (the "Arranger") and BANK OF AMERICA, N.A., individually and as
Syndication Agent for the Lenders hereunder (the "Syndication Agent"), SUNTRUST
BANK, individually and as Documentation Agent for the Lenders hereunder (the
"Documentation Agent," and together with the Administrative Agent and the
Syndication Agent, collectively, the "Agents").
The parties hereto agree as follows:
ARTICLE I
Certain Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:
"ABR," when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
"Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Alternate Base Rate" means, with respect to an ABR Loan, for any day, a
rate per annum equal to, the Base Rate in effect on such day plus the Base Rate
Margin. Any change in the Alternate Base Rate due to a change in the Prime Rate,
the Base Rate or the Federal Funds Effective Rate shall be effective from and
including the effective date of such change in the Prime Rate, the Base Rate or
the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Lender, the percentage
of the total Commitments represented by such Lender's Commitment. If the
Commitments have terminated
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or expired, the Applicable Percentages shall be determined based upon the
Commitments most recently in effect, giving effect to any assignments.
"Applicable Margin" means, with respect to any ABR Loan or Eurodollar Loan,
as the case may be, the applicable margin per annum set forth under the caption
"Base Rate Margin" or "LIBO Rate Margin" in the applicable pricing matrix.
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
"Availability Period" means the period from and including the date hereof
to but excluding the earlier of the Revolving Maturity Date and the date of
termination of the Revolving Loan Commitments.
"Bank of America Letters of Credit" means the letters of credit issued by
Bank of America, N.A. to support CAI's purchase of inventory from foreign
suppliers in an aggregate face amount at any one time outstanding not exceeding
$5,000,000.
"Base Rate" means the greater of (a) the Prime Rate, or (b) the Federal
Funds Effective Rate plus .50%.
"Base Rate Margin" means, with respect to any ABR Loan, the applicable
margin set forth below under the caption "Base Rate Margin," based upon the
ratio of (i) the sum of (x) Consolidated Total Debt plus (y) eight times
Consolidated Rent Expense divided by (ii) Consolidated EBITDA plus Consolidated
Rent Expense, as determined quarterly on a rolling four quarter basis
Ratio Base Rate Margin
----- ----------------
x **** 3.25 1.75%
2.75 *** x * 3.25 1.50%
2.25 *** x * 2.75 1.25%
1.75 *** x * 2.25 1.00%
1.25 *** x * 1.75 0.75%
x * 1.25 0.50%
* denotes less than
*** denotes less than or equal to
**** denotes more than or equal to
"Board" means the Board of Governors of the Federal Reserve System of the
United States of America.
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"Change of Control" means the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) other than
the Control Group, of shares representing more than 50% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock of
CAI; provided, however, that from and after the closing of the IPO Transaction,
the definition of "Change of Control" shall automatically be revised to mean the
acquisition of ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of the Securities Exchange Act of 1934
and the rules of the Securities and Exchange Commission thereunder as in effect
on the date hereof) other than the Control Group, of shares representing more
than 33-1/3% of the aggregate ordinary voting power represented by the issued
and outstanding capital stock of Parent.
"Charge-Off Ratio" shall mean the ratio of (a) the aggregate outstanding
balance of all Charge-Off Receivables of Conn Funding I LP and Conn Funding II
LP to (b) the aggregate outstanding balance of all accounts receivable of Conn
Funding I LP and Conn Funding II LP.
"Charge-Off Receivable" means those accounts receivable (i) which have
been, or should be in accordance with the Credit and Collection Policy,
written-off or discounted any amount due thereunder or (ii) as to which the
account debtor of which has become subject to a bankruptcy, insolvency,
liquidation or reorganization proceeding or proceeding seeking an order of
relief or appointment of a receiver for any substantial part of its property.
"Class," when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are Revolving Loans or the
Term Loan.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" shall mean any property purportedly covered by the terms of
the Security Documents.
"Collection Account Letters of Credit" shall mean letters of credit as
contemplated by the Conn Funding II Indenture issued in order to permit the
delay in depositing amounts otherwise required to be held in a collection
account.
"Commitment" means, with respect to each Lender, (a) such Lender's
Revolving Loan Commitment and (b) such Lender's Term Loan Commitment.
"Commitments" shall mean, collectively, the Revolving Loan Commitments and the
Term Loan Commitments of all the Lenders. The initial amount of each Lender's
Term Loan Commitment and Revolving Loan Commitment is set forth on Schedule 2.01
and Schedule 2.02, respectively, or in the Assignment and Acceptance pursuant to
which such Lender shall have assumed its Commitment, as applicable. The initial
aggregate amount of the Lenders' Commitments is $55,000,000.00.
"Commitment Fee Rate" means, with respect to the commitment fees payable
hereunder, the applicable fee rate as set forth below under the caption
"Commitment Fee," based upon the ratio of (i) the sum of (x) Consolidated Total
Debt plus (y) eight times Consolidated Rent
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Expense divided by (ii) Consolidated EBITDA plus Consolidated Rent Expense, as
determined quarterly on a rolling four quarter basis
Ratio Commitment Fee Rate
----- -------------------
x **** 1.75 0.50%
x * 1.75 0.375%
**** denotes greater or equal to
* denotes less than
"Conn CC LP" shall mean Conn CC, L.P., a Texas limited partnership.
"Conn Credit LLC" shall mean Conn Credit, L.L.C., a Delaware limited
liability company.
"Conn Funding I LP" shall mean Conn Funding I, L.P. a Texas limited
partnership.
"Conn Funding II LP" shall mean Conn Funding II, L.P. a Texas limited
partnership.
"Conn Funding II GP LLC" shall mean Conn Funding II GP, L.L.C., a Texas
limited liability company.
"Conn Funding II Indenture" means that certain Base Indenture dated as of
September 1, 2002 executed by and between Conn Funding II LP and Xxxxx Fargo
Bank Minnesota, National Association, as Trustee, as the same may be amended,
restated, modified or supplemented from time to time.
"Conn Funding LLC" shall mean Conn Funding, L.L.C., a Texas limited
liability company.
"Consolidated Capital Expenditures" shall mean, for any period as to the
Consolidated Group, all capital expenditures made during such period, as
determined in accordance with GAAP (including the capital portion of lease
payments in respect of Capital Lease Obligations); provided, however, that
"Consolidated Capital Expenditures" shall not include (a) expenditures for the
repair or replacement of any fixed or capital assets which were destroyed or
damaged, in whole or in part, to the extent financed by the proceeds of an
insurance policy maintained by such Person or (b) expenditures associated with
the SRDS Loan Guaranty program which have been outstanding one year or less.
"Consolidated Cash Interest Expense" shall mean, for any period as to the
Consolidated Group, the sum of (i) the aggregate amount of interest accruing
and/or actually paid during such period on Consolidated Total Debt, including
the interest portion of payments under Capital Lease Obligations and any
capitalized interest, plus (ii) the net amount payable or paid by such Person
pursuant to any interest rate exchange agreements accruing during such period,
minus (iii) the net amount paid to such Persons pursuant to any interest rate
exchange agreements accruing during such period.
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"Consolidated EBIT" shall mean, for any period the Consolidated Net Income
(plus or minus any non-recurring charges or credits) of the Consolidated Group,
plus (i) the aggregate amount of all federal income taxes of such Person for
such period, plus (ii) Consolidated Cash Interest Expense of such Persons for
such periods plus (or minus) (v) adjustments for extraordinary gains (or losses)
in accordance with GAAP.
"Consolidated EBITDA" shall mean, for any period, the Consolidated Net
Income (plus or minus and non-recurring charges or credits) of the Consolidated
Group, plus (i) the aggregate amount of all federal income taxes of such Persons
for such period, plus (ii) Consolidated Cash Interest Expense of such Person for
such period, plus (iii) the aggregate amount deducted in determining
Consolidated Net Income of such Persons for such period for depreciation,
obsolescence and amortization of Property, plus (or minus) (iv) other Non-Cash
Expense (or Income), plus (or minus) (v) adjustments for extraordinary losses
(or gains) in accordance with GAAP.
"Consolidated Group" shall mean, collectively, (i) prior to the closing of
the IPO Transaction, CAI and its Subsidiaries and (ii) after the closing of the
IPO Transaction, Parent and its Subsidiaries (including CAI and its
Subsidiaries).
"Consolidated Net Income" shall mean, for any period for the Consolidated
Group, the net income minus the net losses of such Persons, as determined in
accordance with GAAP, excluding unusual or extraordinary gains or losses.
"Consolidated Net Worth" shall mean, as of any date, the consolidated net
worth of the Consolidated Group as reflected in such Persons' financial
statements most recently provided pursuant to Section 5.01(b) hereof.
"Consolidated Rent Expense" means for any period for the Consolidated Group
the gross property lease obligations of such Persons for base rent attributable
to leased property (whether real or personal property).
"Consolidated Total Debt" shall mean, as of any date as to the Consolidated
Group, the sum of Senior Debt and Subordinated Debt.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Control Group" means, collectively, the Xxxxxxxx Group and the senior
management of CAI.
"Credit and Collection Policy" means, collectively, the credit, collection,
customer relations and service policies of CAI and CAILP in effect on September
1, 2002, a summary of which has been delivered to the Administrative Agent, as
such policies may be amended, modified or supplemented from time to time with
the consent of the Administrative Agent.
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"Debt Service" means, for any period, the sum of (i) required principal
payments on Consolidated Total Debt for such period (including the capital
portion of lease payments made in respect of Capital Lease Obligations) plus
(ii) Consolidated Cash Interest Expense.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Deferred Sales Proceeds" shall mean the aggregate Outstanding Principal
Balance of Eligible Receivables (as defined in the Conn Funding II Indenture)
minus, without duplication, (x) amounts actually outstanding under the Conn
Funding II Indenture, (y) the aggregate amount of any cash reserves held under
the Conn Funding II Indenture (including an appropriate deduction related to
funds required to be held in any collection account for a period of more than
three (3) Business Days prior to the applicable payments to be made out of such
collection account) and (z) to the extent otherwise included as "Deferred Sales
Proceeds", any Unpurchased Receivables.
"Delinquency Ratio" means the ratio of (a) the aggregate outstanding
balance of all Delinquent Receivables to (b) the aggregate outstanding balance
of all accounts receivable of Conn Funding I LP and Conn Funding II LP.
"Delinquent Receivable" means any account receivable of Conn Funding I LP
and Conn Funding II LP which is 31 days or more past its original due date.
"Disqualified Capital Stock" means with respect to any Person, any capital
stock of such Person or its Subsidiaries that, by its terms or by the terms of
any security into which it is convertible or exchangeable, is, or upon the
happening of an event or the passage of time would be, required to be or at the
option of the issuer may be, redeemed or repurchased by such Person or its
Subsidiaries, including at the option of the holder, in whole or in part, has,
or upon the happening of an event or passage of time would have, a redemption or
similar payment due, on or prior to September 30, 2005.
"DOJ" means the United States Department of Justice.
"Dollars" or "$" refers to lawful money of the United States of America.
"Eligible Accounts Receivable" shall mean accounts receivable of CAI and
CAILP meeting all of the following criteria as of the date of any determination
of Eligible Accounts Receivable:
(a) the account receivable is not a Charge-Off Receivable;
(b) the account receivable shall be billed promptly after the shipment of
the goods or performance of the services giving rise to the account receivable
and shall not remain unpaid for more than sixty (60) days from the applicable
due date;
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(c) which, together with all other accounts receivable owed by such account
debtor to the Consolidated Group, does not constitute in excess of 20% of the
aggregate amount of all accounts receivable held by the Consolidated Group;
(d) is not an account receivable with respect to which, in whole or in
part, a check or other instrument for the payment of money has been received,
presented for payment and returned uncollected for any reason;
(e) is not an account receivable which represents a progress billing or as
to which the obligee has extended the time for payment without the consent of
the Administrative Agent; for the purposes hereof, "progress billing" means any
invoice for goods sold or leased or services rendered under a contract or
agreement pursuant to which the account debtor's obligation to pay such invoice
is conditioned upon the obligee's completion of any further performance under
the contract or agreement;
(f) the Lenders have a valid and perfected first priority Lien with respect
thereto;
(g) the account receivable shall arise from the performance by the obligee
thereon of services which have been fully and satisfactorily performed, or from
the absolute sale by such Person of goods (i) in which such Person had sole and
complete ownership and (ii) which have been shipped and delivered to the account
debtor, evidencing which such Person has possession of shipping and delivery
receipts;
(h) the account receivable is not subject to set-off, counterclaim,
defense, allowance or adjustment other than discounts for prompt payment shown
on the invoice, or to dispute, objection or complaint by the account debtor
concerning its liability on the account receivable, and the goods, the sale of
which gave rise to the account receivable, have not been returned, rejected,
lost or damaged;
(i) the account receivable shall arise in the ordinary course of business
of the obligee thereon, and no notice of bankruptcy or insolvency of the account
debtor, nor any notice of such account debtor's inability to pay its debts as
they become due, has been received by the obligee of such receivable;
(j) the account debtor (i) is a resident of, or organized under the laws of
with its chief executive office in, the United States of America; (ii) is not a
Governmental Authority; (iii) is not subject to a filing by or against the
account debtor of a request or petition for liquidation, reorganization,
arrangement, adjustment of debts, adjudication as a bankrupt, winding-up, or
other relief under the bankruptcy, insolvency, or similar laws of the United
States, any state or territory thereof, or any foreign jurisdiction, now or
hereafter in effect; (iv) has not made any assignment for the benefit of
creditors, is not subject to the appointment of a receiver or trustee, and is
not subject to a proceeding by or against the account debtor under the
bankruptcy laws of the United States or of any formal or informal proceeding for
the dissolution or liquidation of, the settlement of claims against, or winding
up the affairs of the account debtor or for any substantial amount of its
property; and (v) if an individual, is not dead or as to which a judicial
declaration of incompetency has occurred;
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(k) as to which the obligee thereon has not received notice from the
Administrative Agent that, based on such credit, collection and collateral
considerations as the Administrative Agent shall deem reasonable, such account
receivable is ineligible;
(l) the account debtor's obligation to pay the account receivable is not
conditional upon such account debtor's approval or the account receivable is not
subject to any repurchase obligation or return right, other than in the ordinary
course of business;
(m) the unpaid balances of which are included on a certification furnished
to the Lenders pursuant to Section 5.01(e) and are the actual amounts owed by
the account debtor obligated on each such account as of the date of such
certification;
(n) the account receivable is not subject to a Lien in favor of any Person
other than the Lien of the Lenders under the Security Documents;
(o) the account receivable is an "account," "chattel paper" or "general
intangible" within the meaning of Sections 9-105 and 9-106 of the UCC of all
applicable jurisdictions and is not evidenced by an instrument;
(p) the account receivable is denominated and payable only in Dollars in
the United States of America;
(q) the account receivable arises under a contract that is in full force
and effect and constitutes the legal, valid and binding obligation of the
related account debtor enforceable against such account debtor in accordance
with its terms;
(r) the account receivable arises under a contract that (i) does not
require the account debtor on the account receivable to consent to the transfer,
sale or assignment of the rights to payment of the obligee under such account
receivable and (ii) does not contain a confidentiality provision that purports
to restrict the Administrative Agent or any Lender's exercise of rights under
the Loan Documents, including, without limitation, the right to review such
contract; and
(s) the account receivable does not, in whole or in part, contravene in any
material respect any law, rule or regulation applicable thereto (including,
without limitation, those relating to usury, truth in lending, fair credit
billing, fair credit reporting, equal credit opportunity, fair debt collection
practices and privacy) if such contravention could impair the collectibility of
the account receivable or give rise to any liability;
provided, however, that any account receivable which does not meet one or more
of the above requirements may nevertheless be treated as an Eligible Account
Receivable if so agreed in writing by the Lenders. For purposes of this
definition and the calculation of the amount of any Eligible Accounts
Receivable, such amount shall exclude any and all deferred interest charges and
cash option reserves.
"Eligible Inventory" shall mean inventory of the Consolidated Group
(excluding CCC, Conn Funding I LP, Conn Funding II LP, Conn Funding LLC, Conn
Funding II GP LLC, Conn
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CC LP and Conn Credit LLC) the following criteria as of the date of
determination of Eligible Inventory:
(a) the inventory consists of finished products (and not raw materials,
spare parts, packaging and shipping material, supplies, xxxx and hold inventory,
sold and not delivered inventory, returned inventory, inventory delivered to
such Person on consignment, or work in process or held for repair); and
(b) the inventory is not located outside the United States of America and
is not located any clearance center location;
(c) the Lenders have a valid and perfected first priority Lien with respect
to such inventory and is not subject to a Lien in favor of any other Person and
such inventory is in the possession of such Person and is not evidenced by any
negotiable or non-negotiable document of title;
(d) the inventory has not been returned, repossessed or damaged;
(e) the inventory has not become obsolete and is saleable for the use for
which it was manufactured or purchased;
(f) the inventory is not subject to a buyer's rights which would be
superior to the Lien of the Lenders evidenced by the Security Documents;
(g) which, as of the date of any determination of Eligible Inventory, is in
good condition, meets all standards imposed by any governmental authority having
regulatory authority over such goods, their use and/or sale and is either
currently usable or currently salable in the ordinary course of business of the
owner thereof;
(h) as to which, if stored or maintained in a leased location, the
Administrative Agent shall have received a Landlord's Agreement;
(i) which the Administrative Agent shall have all rights under all
applicable patent and trademark laws necessary to sell without material loss of
value following an Event of Default;
(j) the inventory has not been market-down;
(k) the inventory is not loaned inventory; and
(l) as to which such Person has not received notice from the Administrative
Agent that, based on such credit, collection and collateral considerations as
the Administrative Agent shall deem reasonable, such inventory is ineligible.
For purposes of determining the value of Eligible Inventory to be included in
the Borrowing Base, the value thereof shall at the time of any determination
thereof be the lower of (i) cost (less any appropriate revaluation reserves or
reserve for obsolete inventory and any profits accrued in
10
connection with transfers of inventory between the Consolidated Group) or (ii)
fair market value of the Eligible Inventory at such time, in Dollars, determined
in accordance with the average-weighted cost method of accounting and on a basis
otherwise consistent with such Person's current and historical accounting
practices.
"Environmental Laws" means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.
"Environmental Liability" means, as to any Person, any liability,
contingent or otherwise (including any liability for damages, costs of
environmental remediation, fines, penalties or indemnities), of such Person
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
that, together with any Loan Party, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under Section
414 of the Code.
"ERISA Event" means (a) any "reportable event," as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by any Loan Party or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by any Loan Party or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by any
Loan Party or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by any Loan Party or any ERISA Affiliate of any notice, or the receipt
by any Multiemployer Plan from any Loan Party or any ERISA Affiliate of any
notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA.
11
"Eurodollar," when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article VII.
"Excess Cash Flow" shall mean for any period as to the Consolidated Group,
Consolidated EBITDA for such period, minus (a) Debt Service for such period, (b)
voluntary prepayments made pursuant to Section 2.09(a) hereof for such period,
(c) federal, state and local taxes for such period, (d) Consolidated Capital
Expenditures for such period, (e) changes in Working Capital for such period and
(f) any prepayments of the Term Loans required by the provisions of Section
2.09(c).
"Excess Taking Proceeds" means any Extraordinary Receipts in excess of
$250,000 in the aggregate during any calendar year.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, or any other recipient of any payment to be made by or on account of any
obligation of any Loan Party hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which any Loan Party is located and (c) in the case of a Foreign
Lender, any withholding tax that is imposed on amounts payable to such Foreign
Lender at the time such Foreign Lender becomes a party to this Agreement (or
designates a new lending office) or is attributable to such Foreign Lender's
failure to comply with Section 2.15(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from the Loan
Parties with respect to such withholding tax pursuant to Section 2.15(a).
"Extended Receivable" shall mean any account receivable of Conn Funding I
LP and Conn Funding II LP as to which the original due date has been extended.
"Extension Ratio" shall mean the ratio of (a) the aggregate outstanding
balance of all Extended Receivables to (b) the aggregate outstanding balance of
all accounts receivable of Conn Funding I LP and Conn Funding II LP.
"Extraordinary Receipt" means any cash received by or paid to or for the
account of any Person not in the ordinary course of business, tax refunds,
pension plan reversions, proceeds of insurance (other than proceeds of business
interruption insurance to the extent such proceeds constitute compensation for
lost earnings) and indemnity payments; provided, however, that, so long as no
Default or Event of Default shall have occurred and be continuing, an
Extraordinary Receipt shall not include cash receipts received from proceeds of
insurance, condemnation awards (or payments in lieu thereof) or indemnity
payments to the extent that such proceeds, awards or payments in respect of loss
or damage to equipment, fixed assets or real property are applied (or in respect
of which expenditures were previously incurred) to replace or repair the
equipment, fixed assets or real property in respect of which such proceeds were
received in
12
accordance with the terms of the Loan Documents, so long as such application is
made within 12 months after the occurrence of such damage or loss; provided
further, however, that notwithstanding anything to the contrary contained
herein, all Extraordinary Receipts in excess of the Excess Taking Proceeds shall
be applied to the Obligations in accordance with Section 2.09(c) of this
Agreement.
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" means, as to any Person, the Chief Financial Officer or
Treasurer of such Person.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than the United States of America.
"FTC" means the Federal Trade Commission.
"GAAP" means generally accepted accounting principles in effect from time
to time in the United States of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person means any obligation, contingent or
otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person in any
manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness or other obligation
of the payment thereof, (c) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or (d)
as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation; provided that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.
13
"Guarantors" means the parties to the Guaranty Agreements, including but
not limited to Parent and all present and future direct and indirect
Subsidiaries of CAI (excluding CCC, Conn Funding I LP, Conn Funding II LP, Conn
Funding LLC, Conn Funding II GP LLC, Conn CC LP and Conn Credit LLC, so long as
such Subsidiaries of CAI are not required to be treated as new Subsidiaries
under Section 5.13).
"Guaranty Agreements" shall mean, collectively, Guaranty Agreements duly
executed by all of the Guarantors as of the date hereof, together with any
Guaranty Supplement hereafter executed and delivered pursuant to Section 5.13,
in each case as amended from time to time.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
"Highest Lawful Rate" has the meaning set forth in Section 9.15.
"Indebtedness" shall mean (without duplication), for any Person,
(i) all indebtedness of such Person for borrowed money or arising out
of any extension of credit to or for the account of such Person or with
respect to deposits or advances of any kind (including, without limitation,
extensions of credit in the form of reimbursement or payment obligations of
such Person relating to letters of credit issued for the account of such
Person) or for the deferred purchase price of property or services, except
indebtedness which is owing to trade creditors in the ordinary course of
business and which is due within 90 days after the original invoice date;
(ii) Indebtedness of the kind described in clause (i) of this
definition which is secured by (or for which the holder of such
Indebtedness has any existing right, contingent or otherwise, to be secured
by) any mortgage, deed of trust, pledge, lien, security interest or other
charge or encumbrance upon or in property (including, without limitation,
accounts and contract rights) owned by such Person, whether or not such
Person has assumed or become liable for the payment of such Indebtedness or
obligations;
(iii) Capitalized Lease Obligations of such Person;
(iv) all obligations, contingent or otherwise, of such Person in
respect of bankers' acceptances;
(v) all obligations of such Person upon which interest charges are
customarily paid;
14
(vi) all obligations of such Person under conditional sale or other
title retention agreements relating to property acquired by such Person;
and
(vii) all Guaranties or other contingent liabilities (other than
endorsements for collection in the ordinary course of business), direct or
indirect, with respect to Indebtedness (of the kind described in clauses
(i) through (vi) of this definition) of another Person, through an
agreement or otherwise, including, without limitation,
(A) any endorsement not for collection in the ordinary course of
business or discount with recourse or undertaking substantially
equivalent to or having economic effect similar to a Guaranty in
respect of any such Indebtedness;
(B) any agreement (1) to purchase, or to advance or supply funds
for the payment or purchase of, any such Indebtedness, (2) to
purchase, sell or lease property, products, materials or supplies, or
transportation or services, in order to enable such other Person to
pay any such Indebtedness or to assure the owner thereof against loss
regardless of the delivery or nondelivery of the property, products,
materials or supplies or transportation or services or (3) to make any
loan, advance or capital contribution to or other investment in, or to
otherwise provide funds to or for, such other Person in order to
enable such Person to satisfy any obligation (including any liability
for a dividend, stock liquidation payment or expense) or to assure a
minimum equity, working capital or other balance sheet condition in
respect of any such obligation;
(C) obligations of such Person to the counterparty under foreign
currency "hedging" contracts and interest rate contracts (including
without limitation liquidated damages specified therein) arising by
reason of a default or breach (however defined) by such Person
thereunder, net of amounts to be paid to such Person from such
counterparty thereunder; and
(D) obligations under surety, appeal or customs bonds.
The Indebtedness of any Person which shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to
the extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Interest Election Request" means a request by the Borrowers to convert or
continue a Borrowing in accordance with Section 2.06.
"Interest Payment Date" means (a) with respect to any ABR Loan, the last
day of each March, June, September and December, or (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months' duration, each day
15
prior to the last day of such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest Period.
"Interest Period" means (a) with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the applicable Borrower may elect; provided that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case
of a Eurodollar Borrowing only, such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii) any Interest Period pertaining to a
Eurodollar Borrowing that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"IPO Transaction" means the sale of approximately 4,000,000 shares of stock
of Parent to the public pursuant to the draft Form S-1 Registration Statement
(marked as "Version 3") provided to the Agent concurrently with the execution of
this Agreement, the conversion of Parent from a wholly-owned Subsidiary of CAI
to the owner of all of the issued and outstanding equity interests in and to
CAI, the formation of a merger Subsidiary and the merger of such merger
Subsidiary with and into CAI (with CAI being the survivor), the payment of cash
dividends or redemption payments in an aggregate amount not exceeding $2,500,000
and the issuance of stock dividends by Parent required to effectuate the
foregoing.
"Landlord's Agreement" shall mean a Landlord's Agreement, substantially in
the form of Exhibit C hereto, in form and substance satisfactory to the
Administrative Agent.
"Lenders" means the Person listed on the signature pages hereto as the
Lenders and any other Person that shall have become a party hereto pursuant to
an Assignment and Acceptance, or pursuant to an amendment of this Agreement,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Acceptance, or pursuant to an amendment of this Agreement.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London
16
interbank market at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period.
"LIBO Rate Margin" means, with respect to any Eurodollar Loan, the
applicable margin set forth below under the caption "LIBO Rate Margin," based
upon the ratio of (i) the sum of (x) Consolidated Total Debt plus (y) eight
times Consolidated Rent Expense divided by (ii) Consolidated EBITDA plus
Consolidated Rent Expense, as determined quarterly on a rolling four quarter
basis
Ratio LIBO Rate Margin
----- ----------------
x **** 3.25 2.75%
2.75 *** x * 3.25 2.50%
2.25 *** x * 2.75 2.25%
1.75 *** x * 2.25 2.00%
1.25 *** x * 1.75 1.75%
x * 1.25 1.50%
**** denotes greater or equal to
*** denotes less than or equal to
* less than
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"Loans" means the loans made by the Lenders to the Borrowers pursuant to
this Agreement.
"Loan Documents" shall mean this Agreement, the Notes, all Security
Documents, the Subordination Agreements, any Hedging Agreement between any
member of the Consolidated Group and any Lender, and all instruments,
certificates and agreements now or hereafter executed or delivered to the
Administrative Agent or any Lender pursuant to any of the foregoing and the
transactions connected therewith, and all amendments, modifications, renewals,
extensions, increases and rearrangements of, and substitutions for, any of the
foregoing.
"Loan Party" means any Person which now or hereafter executes and delivers
a Loan Document, other than the Administrative Agent, the Lenders and any
Participant.
"Louisiana Insurance Company" means CAI Credit Insurance Agency, Inc., a
Louisiana corporation.
17
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
the Consolidated Group taken as a whole, (b) the ability of any Loan Party to
perform any of its obligations under any Loan Document to which it is a party or
(c) the rights of or benefits available to the Administrative Agent and the
Lenders under the Loan Documents.
"Material Indebtedness" means Indebtedness (other than the Loans), or
obligations in respect of one or more Hedging Agreements, of any one or more of
the Consolidated Group in an aggregate principal amount exceeding $500,000. For
purposes of determining Material Indebtedness, the "principal amount" of the
obligations of any Person in respect of any Hedging Agreement at any time shall
be the maximum aggregate amount (giving effect to any netting agreements) that
such Person would be required to pay if such Hedging Agreement were terminated
at such time.
"Maturity Date" means, with respect to any Revolving Loan, the Revolving
Maturity Date and with respect to the Term Loan, the Term Loan Maturity Date.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgaged Property" shall mean all tangible assets and real property
interests subject to the Security Documents.
"Mortgages" means, collectively, Mortgages, Pledges, Assignments, Security
Agreements and Financing Statements and Deeds of Trust, Assignments, Security
Agreements and Financing Statements securing the Obligations and covering all of
the real property owned or leased by the Loan Parties as of the date hereof
(except such leased properties on which no Lien is required pursuant to Section
5.16), together with any other mortgage or deed of trust hereafter delivered
pursuant to Section 5.16, in each case as amended from time to time.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer or
other disposition of any asset or the sale of any capital stock or other
ownership or profit interest, any securities convertible into or exchangeable
for capital stock or other ownership or profit interest or any warrants, rights,
options or other securities to acquire capital stock or other ownership or
profit interest by any Person, or any Extraordinary Receipt received by or paid
to or for the account of any Person, the aggregate amount of cash received from
time to time (whether as initial consideration or through payment or disposition
of deferred consideration) by or on behalf of such Person in connection with
such transaction after deducting therefrom only (without duplication) (a)
reasonable and customary brokerage commissions, underwriting fees and discounts,
legal fees, finder's fees and other similar fees and commissions, (b) the amount
of taxes payable in connection with or as a result of such transaction and (c)
the amount of any Indebtedness secured by a Lien on such asset that, by the
terms of the agreement or instrument governing such Indebtedness, is required to
be repaid upon such disposition, in each case to the extent, but only to the
extent, that the amounts so deducted are, at the time of receipt of such cash,
actually paid to a Person that is not an Affiliate of such Person or any Loan
Party or any
18
Affiliate of any Loan Party and are properly attributable to such transaction or
to the asset that is the subject thereof.
"Non-Cash Expense (or Income)" shall mean, for any period, the amount of
non-cash expense or income; provided that, (i) if any cash outlay (receipt) is
made (received) during such period in respect of such non-cash expense (income),
only the amount of such non-cash expense (income) which exceeds the amount of
the cash outlay (receipt) may be added back to Consolidated Net Income for
purposes of calculating Consolidated EBITDA, and (ii) if any cash outlay
(receipt) is made (received) during such period in respect of a non-cash expense
(income) for a prior or future period, the amount of such cash outlay (receipt)
shall be deducted from (added to) Consolidated Net Income for the current period
for purposes of calculating Consolidated EBITDA.
"Note" or "Notes" shall mean a promissory note or promissory notes,
respectively, of the Borrowers, executed and delivered under this Agreement.
"Obligations" means all of the obligations of any Loan Party now or
hereafter existing under the Loan Documents, whether for principal, interest,
fees, expenses, indemnification or otherwise.
"Officer's Certificate" shall mean a certificate signed in the name of a
Person, by either its Chief Executive Officer, President, one of its Financial
Officers or Secretary.
"Originator Notes" shall mean (i) those two (2) certain Originator's Notes
dated as of May 12, 2000 executed by Conn Funding I LP payable to order of CAI
and CAILP, respectively, delivered pursuant to the terms and provisions of the
Receivables Purchase Agreement, and (ii) those two (2) certain Originator's
Notes dated as of September 13, 2002 executed by Conn Funding II LP payable to
order of CAI and CAILP, respectively, delivered pursuant to the terms and
provisions of the Receivables Purchase Agreement, as the same may be renewed,
extended, modified or rearranged from time to time.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement.
"Parent" means Conn's, Inc., a Delaware corporation.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's and
other like
19
Liens imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 30 days or are being contested in
compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;
(e) easements, zoning restrictions, rights-of-way and similar encumbrances
on real property imposed by law or arising in the ordinary course of business
that do not secure any monetary obligations and do not materially detract from
the value of the affected property or interfere with the ordinary conduct of
business of any Loan Party or any of their Subsidiaries; and
(f) security interest filings by lessors under personal property leases;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the date
of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Xxxxx'x;
(c) investments in certificates of deposit, banker's acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000; and
(d) fully collateralized repurchase agreements with a term of not more than
30 days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c) above.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
20
"Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which any Loan Party or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Pledge and Security Agreements" means, collectively, Pledge and Security
Agreements securing the Obligations and covering all of the issued and
outstanding equity interests in and to each of the Loan Parties (other than
those equity interests in and to CAI on which no Lien is required pursuant to
Section 6.24 and other than, after the closing of the IPO Transaction, equity
interests in and to Parent), and those certain Pledge and Security Agreements
executed and delivered pursuant to Section 5.13, in each case as amended from
time to time.
"Prime Rate" means the rate of interest per annum publicly announced from
time to time by JPMorgan Chase Bank as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be effective from
and including the date such change is publicly announced as being effective.
"Real Estate Documentation" means that certain Promissory Note dated June,
1993 payable to Metlife Capital Corporation (and thereafter assigned to General
Electric Capital Corporation) in the sum of $675,000 secured by a Deed of Trust
on real property known as CAI Store Location No. 27.
"Receivables Purchase Agreement" means that certain Receivables Purchase
Agreement dated as of September 1, 2002 between Conn Funding II LP, as
Purchaser, Conn Funding I LP, as the Initial Seller, and CAI and CAILP,
collectively as Originator, together with any and all amendments, restatements,
renewals and extensions thereof not in violation of Article VII(p).
"Receivables Purchase Documents" means, collectively, the Receivables
Purchase Agreement, the Originator Notes, the Conn Funding II Indenture, the
Collection Account Letters of Credit and any and all documents, instruments and
agreements executed in connection therewith.
"Register" has the meaning set forth in Section 9.04(c).
"Related Parties" means, with respect to any specified Person, such
Person's affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's affiliates.
"Required Lenders" means, at any time, Lenders having Revolving Credit
Exposures and Term Loan Exposures and unused Commitments representing at least
66 2/3% of the sum of the total Revolving Credit Exposures, Term Loan Exposures
and unused Commitments at such time.
"Restricted Payment" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any shares of any class of
capital stock of any member of the Consolidated Group, or any payment (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption,
21
retirement, acquisition, cancellation or termination of any such shares of
capital stock of any such Person or any option, warrant or other right to
acquire any such shares of capital stock of any such Person.
"Revolving Credit Exposure" means, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender's Revolving Loans.
"Revolving Loan" means a Loan made pursuant to Section 2.02.
"Revolving Loan Commitment" shall mean each Lender's initial Revolving Loan
Commitment set forth on Schedule 2.02, expressed as an amount representing the
maximum aggregate amount of such Lender's Revolving Credit Exposure hereunder,
as such commitment may be (i) reduced from time to time pursuant to Section 2.07
and (ii) reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 9.04.
"Revolving Maturity Date" shall mean September 13, 2005, or any earlier
date on which (i) the Revolving Loan Commitments shall have terminated in
accordance with this Agreement and (ii)(a) all unpaid amounts owing under the
Revolving Notes have been declared due and payable in accordance with this
Agreement or (b) all unpaid amounts owing under the Revolving Notes shall have
been prepaid in accordance with this Agreement.
"Revolving Notes" shall mean the promissory notes of the Borrowers executed
and delivered under Section 2.08(c).
"S&P" means Standard & Poor's Ratings Group.
"SEC" means the Securities and Exchange Commission, an agency of the United
States government.
"Security Agreements" means, collectively, Security Agreements securing the
Obligations and covering all material personal property of the Loan Parties
(other than personal property covered by the Pledge and Security Agreements),
and those certain Security Agreements executed and delivered pursuant to Section
5.13, in each case as amended from time to time.
"Security Documents" shall mean the Pledge and Security Agreements, the
Security Agreements, the Guaranty Agreements and the Mortgages, as they may be
amended or modified from time to time, and any and all other agreements, deeds
of trust, mortgages, chattel mortgages, security agreements, pledges,
guaranties, assignments of production or proceeds of production, assignments of
income, assignments of contract rights, assignments of partnership interest,
assignments of royalty interests, assignments of performance, completion or
surety bonds, standby agreements, subordination agreements, undertakings and
other instruments and financing statements now or hereafter executed and
delivered by any Person (other than solely by the Administrative Agent or any
Lender and/or any other creditor participating in the Loans evidenced by the
Notes or any collateral or security therefor) in connection with, or as security
for Obligations.
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"Seller Subordinated Note" means that certain promissory note dated as of
July 14, 1998 executed and delivered by CAI to X.X. Xxxx, Xx., in the original
principal amount of $9,180,000.
"Seller Subordination Agreement" means that certain Subordination Agreement
dated as of July 14, 1998 among CAI, the Administrative Agent and X.X. Xxxx,
Xx., as amended from time to time.
"Senior Debt" means, as to the Consolidated Group, Indebtedness minus
Subordinated Debt.
"SRDS Loan Guaranty Program" shall mean those series of loan guaranties
entered into by CAI, for the benefit of various lenders, to facilitate the
construction and development of new stores by CAI and its Affiliates by third
party developers, all in accordance with the business plan and expansion program
of said parties in effect as of September 13, 2002.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Xxxxxxxx Group" means the persons identified on Schedule 3.15(b) as the
"Xxxxxxxx Group".
"Subordinated Debt" shall mean, collectively, (i) Indebtedness of CAI
existing under the Voyager Debenture, to the extent permitted under Section
6.01(e) hereof, and (ii) Indebtedness of CAI under the Seller Subordinated Note,
to the extent permitted under Section 6.01(g).
"Subordination Agreements" means, collectively, the Voyager Subordination
and Standstill Agreement and the Seller Subordination Agreement.
"Subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or
23
(b) that is, as of such date, otherwise Controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.
"Taxes" means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
"Term Loan" means a Loan made pursuant to Section 2.01.
"Term Loan Commitment" shall mean each Lender's initial Term Loan
Commitment set forth on Schedule 2.01.
"Term Loan Exposure" means, with respect to any Lender at any time, the sum
of the outstanding principal amount of such Lender's percentage share of the
Term Loan.
"Term Maturity Date" shall mean September 13, 2005, or any earlier date on
which (i) the Term Loan Commitments shall have terminated in accordance with
this Agreement and (ii)(a) all unpaid amounts owing under the Term Notes have
been declared due and payable in accordance with this Agreement or (b) all
unpaid amounts owing under the Term Notes shall have been prepaid in accordance
with this Agreement.
"Term Notes" shall mean the promissory notes of the Borrowers executed and
delivered under Section 2.08(a).
"Transactions" means the execution, delivery and performance by the Loan
Parties of this Agreement and the other Loan Documents, the borrowing of Loans,
and the use of the proceeds thereof.
"Type," when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the LIBO Rate or the Alternate Base Rate.
"Unpurchased Receivables" means, for any period, accounts receivable of
Conn Funding I LP and Conn Funding II LP that would otherwise be Eligible
Accounts Receivable except for items (f) and (n) in the definition thereof.
"Voyager" shall mean the Voyager Indemnity Insurance Company.
"Voyager Debenture" shall mean that certain Floating Rate Debenture, in the
original principal amount of $2,000,000 (and with a current principal balance of
$3,500,000), dated as of April 1, 1998, executed by CAI, as amended from time to
time not in violation of Article VII(q) hereof.
"Voyager Documents" means, collectively, the Voyager Debenture, the Voyager
Keep Well Agreement, the Voyager Security Agreement and the Voyager
Subordination and Standstill Agreement.
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"Voyager Keep Well Agreement" shall mean that certain Keep Well and
Repurchase Agreement between Voyager and CAI, dated as of April 1, 1998, as
amended from time to time not in violation of Article VII(q) hereof.
"Voyager Security Agreement" shall mean that certain Security Agreement,
dated as of April 1, 1998, executed in favor of Voyager, as amended from time to
time not in violation of Article VII(q) hereof.
"Voyager Subordination and Standstill Agreement" shall mean that certain
Voyager Subordination and Standstill Agreement, dated as July 14, 1998, among
the Administrative Agent, CAI (and certain of its affiliates) and Voyager, as
amended from time to time not in violation with Article VII(q) hereof.
"Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
"Working Capital" means, for any period, current assets minus current
liabilities, as defined in accordance with GAAP.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a "Revolving
Loan" or a "Term Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and
Type (e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified
and referred to by Class (e.g., a "Revolving Borrowing" or a "Term Borrowing")
or by Type (e.g., a "Eurodollar Borrowing") or by Class and Type (e.g., a
"Eurodollar Revolving Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word "shall."
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein," "hereof" and "hereunder," and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with
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GAAP, as in effect from time to time; provided that, if the Borrowers notify the
Administrative Agent that the Borrowers request an amendment to any provision
hereof to eliminate the effect of any change occurring after the date hereof in
GAAP or in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrowers that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Term Commitments. Each Lender has made a Term Loan to the
Borrowers in an aggregate principal amount equal to such Lender's Term Loan
Commitment. Amounts borrowed under the Term Loan and repaid or prepaid may not
be reborrowed. After giving effect to such Term Loan, the unused Term Loan
Commitments shall be automatically and permanently terminated.
SECTION 2.02. Revolving Commitments. Subject to the terms and conditions
set forth herein, each Lender agrees to make Revolving Loans to the Borrowers
from time to time during the Availability Period in an aggregate principal
amount that will not result in (a) such Lender's Revolving Credit Exposure to
all Borrowers exceeding such Lender's Revolving Loan Commitment or (b) the sum
of the total Revolving Credit Exposures exceeding the lesser of (x) the total
Revolving Loan Commitments or (y) the Borrowing Base. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrowers
may borrow, prepay and reborrow Revolving Loans.
SECTION 2.03. Loans and Borrowings.
(a) Each Loan shall be made as part of a Borrowing consisting of Loans made
by the Lenders ratably in accordance with their respective Commitments. The
failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender's failure to make Loans as required.
(b) Subject to Section 2.12, each Borrowing shall be comprised entirely of
ABR Loans or Eurodollar Loans as the applicable Borrower may request in
accordance herewith. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the applicable Borrower to repay such Loan in accordance with the terms of
this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $500,000 and not less than $1,000,000. At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $500,000 and not less than $1,000,000;
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provided that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Revolving Loan Commitments.
Borrowings of more than one Type and Class may be outstanding at the same time;
provided that there shall not at any time be more than a total of twelve (12)
Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the Borrowers
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.
SECTION 2.04. Requests for Borrowings. To request a Borrowing, the
applicable Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.,
Houston time, three Business Days before the date of the proposed Borrowing, or
(b) in the case of an ABR Borrowing, not later than 11:00 a.m., Houston time,
one Business Day before the date of the proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Borrowing Request
in the form set forth as Exhibit D hereto and signed by the applicable Borrower.
Each such telephonic and written Borrowing Request shall specify the following
information in compliance with Sections 2.02 and 2.03:
(i) the applicable Borrower;
(ii) the aggregate amount of the requested Borrowing;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) whether such Borrowing is to be a Term Borrowing or a Revolving
Borrowing;
(v) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(vi) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(vii) the location and number of the Borrower's account to which funds
are to be disbursed.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the applicable Borrower
shall be deemed to have selected an Interest Period one month's duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
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SECTION 2.05. Funding of Borrowings.
(a) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 12:00
noon, Houston time, to the account of the Administrative Agent most recently
designated by it for such purpose by notice to the Lenders. The Administrative
Agent will make such Loans available to the Borrowers by promptly crediting the
amounts so received, in like funds, to an account of the Borrowers maintained
with the Administrative Agent in Houston and designated by the Borrowers in the
applicable Borrowing Request.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrowers a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrowers severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrowers to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrowers,
the interest rate applicable to ABR Loans. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
SECTION 2.06. Interest Elections.
(a) Each Borrowing initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall
have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrowers may elect to convert such Borrowing to a different
Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing,
may elect Interest Periods therefor, all as provided in this Section. The
Borrowers may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the Borrowers shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrowers were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request in a
form set forth on Exhibit E attached hereto and signed by the applicable
Borrower.
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(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.03:
(i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing
(in which case the information to be specified pursuant to clauses (iii)
and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period."
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the applicable Borrower shall be deemed to
have selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrowers fail to deliver a timely Interest Election Request
with respect to a Eurodollar Revolving Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrowers, then, so long
as an Event of Default is continuing (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
SECTION 2.07. Termination and Reduction of Revolving Loan Commitments.
(a) Unless previously terminated, the Revolving Loan Commitments shall
terminate on the Revolving Maturity Date.
(b) The Borrowers may at any time terminate, or from time to time reduce,
the Revolving Loan Commitments; provided that each reduction of the Revolving
Loan Commitments shall be in an amount that is an integral multiple of $250,000
and not less than $1,000,000.
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(c) The Borrowers shall notify the Administrative Agent of any election to
terminate or reduce the Revolving Loan Commitments under paragraph (b) of this
Section at least five Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrowers pursuant to this Section shall be irrevocable. Any termination or
reduction of the Revolving Loan Commitments shall be permanent. Each reduction
of the Revolving Loan Commitments shall be made ratably among the Lenders in
accordance with their respective Revolving Loan Commitments.
SECTION 2.08. Repayment of Loans; Evidence of Debt.
(a) The Borrowers have executed and delivered to the Administrative Agent
for the benefit of each Lender in order to evidence the Term Loans made by such
Lender to the Borrowers under such Lender's Term Loan Commitment, Term Notes,
which are (i) in the principal amount of such Lender's applicable maximum Term
Loan Commitment and (ii) in substantially the form attached hereto as Exhibit F,
with the blanks appropriately filled. The outstanding principal balance of each
Term Note shall be payable in equal quarterly installments of principal in an
amount equal to $1,500,000 times the applicable Lender's pro rata share of the
aggregate Term Loans, with such payments to be due on May 1, 2003 and on the
first day of each August, November, February and May thereafter prior to the
Term Maturity Date. On the Term Maturity Date, the entire unpaid principal
balance of the Term Loans shall be due and payable.
(b) Each Term Note shall bear interest on the unpaid principal amount
thereof from time to time outstanding at the rate per annum determined as
specified in Section 2.11 payable on each Interest Payment Date and at maturity,
commencing with the first Interest Payment Date following the date of such Term
Note.
(c) The Borrowers shall execute and deliver to the Administrative Agent for
each Lender a Revolving Note to evidence the Revolving Loans made by such Lender
to the Borrowers under such Lender's aggregate Revolving Loan Commitment, which
shall be (i) in the principal amount of such Lender's Revolving Loan Commitment
and (ii) in substantially the form attached hereto as Exhibit G, with the blanks
appropriately filled. The outstanding principal balance of each Revolving Note
shall be payable on the Revolving Maturity Date.
(d) Each Revolving Note shall bear interest on the unpaid principal amount
thereof from time to time outstanding at the rate per annum determined as
specified in Section 2.11 payable on each Interest Payment Date and at maturity,
commencing with the first Interest Payment Date following the date of such
Revolving Note.
SECTION 2.09. Prepayment of Loans.
(a) The Borrowers shall have the right at any time and from time to time to
prepay any Borrowing in whole or in part, subject to prior notice in accordance
with paragraph (d) of this Section; provided that such prepayment shall be in an
amount that is an integral multiple of $250,000 and not less than $1,000,000.
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(b) Concurrently with the delivery of each set of financial statements
pursuant to Section 5.01(a), commencing with the fiscal year ending January 31,
2003, the Borrowers shall prepay the outstanding Term Loans, in inverse order of
maturity, in an aggregate amount equal to fifty percent (50%) of Excess Cash
Flow, if any, as determined for the fiscal year then ended.
(c) The Borrowers shall, on the date of receipt of Net Cash Proceeds by any
Loan Party from (A) the sale, lease, transfer or other disposition of any assets
of any such Person having a fair market value at the time of such sale, lease,
transfer or other disposition of $3,500,000 or more in the aggregate for all
such sales, leases, transfers or other dispositions of such Persons in any
fiscal year (other than pursuant to Sections 6.10, 6.12 and 6.13 or the
Receivables Purchase Agreement and, provided no Default or Event of Default
shall exist, excluding any Net Cash Proceeds applied within six months after
such sale, transfer or other disposition towards the acquisition by such Person
of assets (i) which have an aggregate fair market value at least equal to the
Net Cash Proceeds received from such disposition, (ii) which are pledged to the
Administrative Agent pursuant to Section 5.10 and no other Liens shall exist on
such assets and (iii) are of the same general type as such disposed assets), (B)
the sale or issuance by any such Person of any capital stock or other ownership
or profit interest (other than in respect of stock options or warrants currently
outstanding and identified in Schedule 3.15 or hereafter issued pursuant to any
stock option plan or other compensation arrangement approved by CAI's Board of
Directors), any securities converted into or exchangeable for capital stock or
other ownership or profit interest or any warrants, rights or options to acquire
capital stock or other ownership or profit interest, (C) any contribution to the
capital of any such Person (other than from a Loan Party to another Loan Party)
and (D) any Extraordinary Receipt received by or paid to or for the account of
any such Person, prepay an aggregate principal amount of the Term Loans, in
inverse order of maturity equal to 100% of the amount of such Net Cash Proceeds.
Notwithstanding the foregoing, (i) Borrowers shall not be required to prepay the
Term Loans by more than $5,000,000 from the proceeds realized from the IPO
Transaction and (ii) such prepayment of the Term Loans from the proceeds
realized from the IPO Transaction shall be applied pro rata to all of the
remaining principal installments payable on the Term Loans.
(d) The Borrowers shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder not later than 11:00 a.m.,
Houston time, five Business Days before the date of prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid. Promptly following
receipt of any such notice, the Administrative Agent shall advise the Lenders of
the contents thereof. Each prepayment of a Revolving Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing. Each prepayment of a
Term Borrowing shall be applied in the inverse order of maturity. All
prepayments shall be accompanied by accrued interest and, if the prepayment is
in respect of a Eurodollar Borrowing and is made on any day other than the last
day of the applicable Interest Period, such prepayment must be accompanied by
payment of all breakage costs and funding losses as provided for in Section
2.14.
SECTION 2.10. Fees.
(a) The Borrowers agree to pay to the Administrative Agent for the account
of each Lender a facility fee, which shall accrue at the Commitment Fee Rate on
the daily amount of the
31
unutilized portion of the Revolving Commitment of such Lender during the period
from and including the date hereof to but excluding the date on which such
Commitment terminates. Accrued facility fees shall be payable in arrears on the
last day of April, July, October and January of each year and on the date on
which the Commitments terminate, commencing on the first such date to occur
after the date hereof; provided that any facility fees accruing after the date
on which the Commitments terminate shall be payable on demand. All facility fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).
(b) The Borrowers agree to pay to the Arranger an underwriting fee, which
shall be payable at closing and payable in the amounts and at the times
separately agreed upon between the Borrowers and the Arranger.
(c) The Borrowers agree to pay to the Administrative Agent, for its own
account, administrative fees payable in the amounts and at the times separately
agreed upon between the Borrowers and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Arranger, in
the case of fees payable to it) for distribution, in the case of facility fees
and participation fees, to the Lenders. Fees paid shall not be refundable under
any circumstances.
SECTION 2.11. Interest.
(a) The Loans comprising each ABR Borrowing shall bear interest at the
Alternate Base Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest at
the Adjusted LIBO Rate plus the applicable LIBO Rate Margin for the Interest
Period in effect for such Borrowing.
(c) Notwithstanding the foregoing, if any principal of or interest on any
Loan or any fee or other amount payable by the Borrowers hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 3% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 3% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and, in the case of Revolving Loans, upon
termination of the Revolving Loan Commitments; provided that (i) interest
accrued pursuant to paragraph (c) of this Section shall be payable on demand,
(ii) in the event of any repayment or prepayment of any Loan, accrued interest
on the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.
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(e) All interest hereunder shall be computed on the basis of a year of 360
days, except that, interest computed by reference to the Alternate Base Rate at
times when the Alternate Base Rate is based on the Prime Rate shall be computed
on the basis of a year of 365 days (or 366 days in a leap year), and in each
case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). The applicable Alternate Base Rate and LIBO
Rate shall be determined by the Administrative Agent, and such determination
shall be conclusive absent manifest error.
SECTION 2.12. Alternate Rate of Interest. If prior to the commencement of
any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that the
LIBO Rate for such Interest Period will not adequately and fairly reflect the
cost to such Lenders (or Lender) of making or maintaining their Loans (or its
Loan) included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrowers and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrowers and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing; provided that if the circumstances
giving rise to such notice affect only one Type of Borrowings, then the other
Type of Borrowings shall be permitted.
SECTION 2.13. Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or to
reduce the amount of any sum received or receivable by such Lender hereunder
(whether of principal, interest or otherwise), then the Borrowers will pay
33
to such Lender such additional amount or amounts as will compensate such Lender
for such additional costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of this Agreement or the Loans made by such Lender to a level
below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Borrowers will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts necessary
to compensate such Lender or its holding company, as the case may be, as
specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrowers and shall be conclusive absent manifest error. The Borrowers shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
(d) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's right to
demand such compensation.
SECTION 2.14. Break Funding Payments. In the event of (a) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, or (c) the failure to borrow, convert, continue or
prepay any Loan on the date specified in any notice delivered pursuant hereto
then, in any such event, the Borrowers shall compensate each Lender for the
loss, cost and expense attributable to such event. In the case of a Eurodollar
Loan, such loss, cost or expense to any Lender shall be deemed to include an
amount determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at LIBO Rate that would have been applicable to such Loan,
for the period from the date of such event to the last day of the then current
Interest Period therefor (or, in the case of a failure to borrow, convert or
continue, for the period that would have been the Interest Period for such
Loan), over (ii) the amount of interest which would accrue on such principal
amount for such period at the interest rate which such Lender would bid were it
to bid, at the commencement of such period, for dollar deposits of a comparable
amount and period from other banks in the Eurodollar market. A certificate of
any Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section shall be delivered to the Borrowers and shall
be conclusive absent manifest error. The Borrowers shall pay such Lender the
amount shown as due on any such certificate within 10 days after receipt
thereof.
SECTION 2.15. Taxes.
(a) Any and all payments by or on account of any obligation of the
Borrowers hereunder shall be made free and clear of and without deduction for
any Indemnified Taxes or Other Taxes; provided that if the Borrowers shall be
required to deduct any Indemnified Taxes or
34
Other Taxes from such payments, then (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 or Lender (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrowers shall
make such deductions and (iii) the Borrowers shall pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Borrowers shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrowers shall indemnify the Administrative Agent and each Lender,
within ten (10) days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of the Borrowers hereunder (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Borrowers by a Lender or by the Administrative Agent on its own behalf or
on behalf of a Lender, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrowers to a Governmental Authority, the Borrowers shall deliver
to the Administrative Agent the original or a certified copy of a receipt issued
by such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which any Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrowers (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrowers as will permit such payments to be made
without withholding or at a reduced rate.
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) The Borrowers shall make each payment required to be made by it
hereunder (whether of principal, interest or fees, or of amounts payable under
Section 2.13, 2.14 or 2.15, or otherwise) prior to 12:00 noon, Houston time, on
the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at 000
Xxxx Xxxxxx, Xxxxxxx, Xxxxx 00000. The Administrative Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be
35
extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such
extension. All payments hereunder shall be made in Dollars.
(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, interest and fees
then due hereunder, such funds shall be applied (i) first, towards payment 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 (ii) second, towards payment of principal then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal then
due to such parties.
(c) If any Lender shall, by exercising any right of set-off or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of its Revolving or Term Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Revolving or Term Loans and
accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Revolving or Term Loans of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving and Term Loans; provided that (i)
if any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrowers pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans to any assignee
or participant, other than to Parent or to the Borrowers or any Subsidiary or
affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrowers consent to the foregoing and agree, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrowers rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrowers in the amount
of such participation.
(d) Unless the Administrative Agent shall have received notice from the
Borrowers prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrowers will not make
such payment, the Administrative Agent may assume that the Borrowers have made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lender, the amount due. In such event, if the
Borrowers have not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.
36
(e) If any Lender shall fail to make any payment required to be made by it
to the Administrative Agent pursuant to Section 2.05(b) or 2.16(d), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender's obligations under
such Sections until all such unsatisfied obligations are fully paid.
ARTICLE III
Representations and Warranties
The Borrowers represent and warrant to the Lenders that:
SECTION 3.01. Organization; Powers. Each Loan Party and each of their
Subsidiaries are duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. Authorization; Enforceability. The Transactions are within
the corporate powers of each Loan Party and have been duly authorized by all
necessary corporate and, if required, stockholder action. Each Loan Document to
which any Loan Party is a party has been duly executed and delivered by such
Person and constitutes a legal, valid and binding obligation of such Person,
enforceable in accordance with its terms.
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect, (b) will not violate any applicable
law or regulation or the charter, by-laws or other organizational documents of
any Loan Party or any of their Subsidiaries or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon any Loan Party or any of their
Subsidiaries or its assets, or give rise to a right thereunder to require any
payment to be made by any Loan Party or any of their Subsidiaries, and (d)
except for Liens in favor of the Lenders created by the Loan Documents, will not
result in the creation or imposition of any Lien on any asset of any Loan Party
or any of their Subsidiaries.
SECTION 3.04. Financial Condition; No Material Adverse Change.
(a) The Borrowers have heretofore furnished to the Administrative Agent the
following financial statements: a consolidated balance sheet and statements of
income, stockholders equity and cash flows of CAI (i) as of and for the fiscal
year ended January 31, 2002 reported on by nationally recognized independent
public accountants, and (ii) as of and for the fiscal quarter ended October 31,
2002, certified by a Financial Officer. Such financial statements present
fairly, in all material respects, the financial position and results of
operations and cash flows of CAI and its consolidated Subsidiaries as of such
dates and for such periods in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes in the case of the statements referred
to in clause (ii) above.
37
(b) Since October 31, 2002, there has been no material adverse change in
the business, assets, operations, prospects or condition, financial or
otherwise, of CAI and its Subsidiaries, taken as a whole.
SECTION 3.05. Properties.
(a) Except for Liens permitted by Section 6.02, each Loan Party and each of
their Subsidiaries has good title to, or valid leasehold interests in, all its
real and personal property material to its business, except for minor defects in
title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes.
Set forth on Schedule 3.05(a)(i) hereto is a complete and accurate list of all
real property owned by any Loan Party or any of their Subsidiaries, showing as
of the date hereof the street address, county or other relevant jurisdiction,
state, record owner and the acquisition cost and book value thereof. Each Loan
Party and each of their Subsidiaries has good, marketable and insurable fee
simple title to such real property, free and clear of all Liens, other than
Liens permitted by Section 6.02. Set forth on Schedule 3.05(a)(ii) hereto is a
complete and accurate list of all leases of real property under which any Loan
Party or any of their Subsidiaries is the lessee or sublessee, showing as of the
date hereof the street address, county or other relevant jurisdiction, state,
lessor, lessee or sublessee, expiration date and annual rental cost thereof.
Each such lease or sublease is the legal, valid and binding obligation of the
lessor or sublessor, as the case may be thereof, enforceable in accordance with
its terms. From and after the closing of the IPO Transaction, Parent will own no
material property other than equity interests in and to CAI and such equity
interests shall not be subject to any Lien.
(b) Each Loan Party and each of their, Subsidiaries enjoy, peaceful and
undisturbed possession of the portion of the real property as to which any such
Person is a lessee under all leases necessary for the operation of its
properties and assets, and all such leases are valid and subsisting and are in
full force and effect.
(c) Each Loan Party and each of their Subsidiaries owns, or is licensed to
use, all trademarks, trade names, copyrights, patents and other intellectual
property material to its business, and the use thereof by such Person does not
infringe upon the rights of any other Person, except for any such infringements
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.06. Litigation and Environmental Matters.
(a) There are no actions, suits or proceedings by or before any arbitrator
or Governmental Authority pending against or, to the knowledge of any Borrower,
threatened against or affecting any Loan Party or any of their Subsidiaries (i)
as to which there is a reasonable possibility of an adverse determination and
that, if adversely determined, could reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect or (ii) that involve any
Loan Document or the Transactions or (iii) which affects the Mortgaged Property
(including, without limitation, any which challenges or otherwise pertains to
any Loan Party's or any of their Subsidiaries' title to the Mortgaged Property).
As of the date hereof, there
38
is no outstanding judgment, order or decree affecting any Loan Party or any of
their Subsidiaries before or by any administrative or Governmental Authority.
(b) (i) All facilities and property owned or leased by any Loan Party or
any of their Subsidiaries have been and continue to be, owned or leased and
operated by such Person in material compliance with all Environmental Laws; (ii)
there has not been any Release of Hazardous Materials at, on or under any
property now or previously owned or leased by any Loan Party or any of their
Subsidiaries (A) in quantities that would be required to be reported under any
Environmental Law, (B) that required, or may reasonably be expected to require,
any such Person to expend funds on remediation or clean-up activities pursuant
to any Environmental Law, or (C) that, singly or in the aggregate, have, or may
reasonably be expected to have, a Material Adverse Effect; (iii) each Loan Party
and each of their Subsidiaries have been issued and are in material compliance
with all permits, certificates, approvals, orders, licenses and other
authorizations relating to environmental matters necessary for their respective
businesses; (iv) there are not and in the past there have been none of the
following on or in any of the assets of any Loan Party or any of their
Subsidiaries or any property now or previously owned or leased by them which
would result in any Environmental Liability or any Material Adverse Effect: (A)
any Hazardous Materials, (B) any generation, treatment, recycling, storage or
disposal of any Hazardous Materials, (C) any underground storage tanks or
surface impoundments, (D) any asbestos-containing material, or (E) any
polychlorinated biphenyls (PCBs); and (v) neither any Loan Party nor any of
their Subsidiaries (A) has become subject to any Environmental Liability, (B)
has received notice of any claim with respect to any Environmental Liability or
(C) knows of any basis for any Environmental Liability.
SECTION 3.07. Compliance with Laws and Agreements. Each Loan Party and each
of their Subsidiaries is in compliance with all laws, regulations and orders of
any Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.
SECTION 3.08. Investment and Holding Company Status. No Loan Party nor any
of their Subsidiaries is (a) an "investment company" as defined in, or subject
to regulation under, the Investment Company Act of 1940 or (b) a "holding
company" as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935.
SECTION 3.09. Taxes. As of the date hereof, each Loan Party and each of
their Subsidiaries have filed all tax returns required to be filed and have paid
all taxes shown on said returns and all assessments which are not yet
delinquent. No Borrower is aware of any pending investigation by any taxing
authority or of any claims by any Governmental Authority for any unpaid taxes by
any Loan Party or any of their Subsidiaries.
SECTION 3.10. Public Utility Holding Company Act Not Applicable. No Loan
Party nor any of their Subsidiaries thereof is a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company," or an affiliate of a "subsidiary company" of a "holding company," or a
"public utility," as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended.
39
SECTION 3.11. Regulations G, U and X. None of the proceeds of any Loan will
be used for the purpose of purchasing or carrying, directly or indirectly, any
"margin stock" within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System ("margin stock"), or to extend credit to others for
the purpose of purchasing or carrying any margin stock, or for any other purpose
which would constitute this transaction a "purpose credit" within the meaning of
said Regulation U, as now in effect or as the same may hereafter be in effect.
No Loan Party nor any of their Subsidiaries will take or permit any action which
would involve the Lenders in a violation of Regulation G, Regulation U,
Regulation X or any other regulation of the Board of Governors of the Federal
Reserve System or a violation of the Securities Exchange Act of 1934, in each
case as now or hereafter in effect.
SECTION 3.12. ERISA. No "reportable event" (as defined in Section 4043(b)
of ERISA) has occurred with respect to any Plan. Each Plan complies with all
applicable provisions of ERISA, and each Loan Party and each of their
Subsidiaries have filed all reports required by ERISA and the Code to be filed
with respect to each Plan. The Borrowers have no knowledge of any event which
could result in a liability of any Loan Party or any of their Subsidiaries to
the Pension Benefit Guaranty Corporation. Each Loan Party and each of their
Subsidiaries have met all requirements with respect to funding the Plans imposed
by ERISA or the Code. Since the effective date of Title IV of ERISA, there have
not been any, nor are there now existing any, events or conditions that would
permit any Plan to be terminated under circumstances which would cause the lien
provided under Section 4068 of ERISA to attach to any property of any Loan Party
or any of their Subsidiaries The value of the Plans' benefits guaranteed under
Title IV of ERISA on the date hereof does not exceed the value of such Plans'
assets allocable to such benefits as of the date of this Agreement and shall not
be permitted to do so hereafter.
SECTION 3.13. Disclosure. The Borrowers have disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which any Loan
Party or any of their Subsidiaries is subject, and all other matters known to
it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. None of the reports, financial statements,
certificates or other information furnished by or on behalf of any Loan Party or
any of their Subsidiaries to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or delivered hereunder or in
connection herewith (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. All estimates,
projections and pro forma financial information contained in materials hereafter
delivered to the Administrative Agent by or on behalf of any Loan Party or any
of their Subsidiaries will be based upon assumptions believed by such Persons to
be reasonable as of the date of the preparation of the same. Nothing in this
Section 3.13 shall be construed as a representation, warranty or covenant that
any of such estimates, projections or pro forma financial information shall in
fact be achieved.
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SECTION 3.14. Condition of Properties.
(a) The retail sales locations of each Loan Party and each of their
Subsidiaries have adequate rights of access to public streets and roads and to
all water, sanitary sewer and storm drainage facilities necessary for the
intended use of such locations. All roads necessary for the intended use of such
locations have (i) been completed, (ii) the necessary rights-of-way therefor,
which have been acquired by the appropriate Governmental Authority or have been
dedicated to public use and accepted by such Governmental Authority, and all
necessary steps have been taken to assure the complete construction and
installation thereof, and (iii) valid easements appurtenant to such locations
with completed roadway contained therein.
(b) The inventory of each Loan Party and each of their Subsidiaries is in
materially merchantable condition and of a quality and quantity usable, or
salable, as appropriate, in the ordinary course of business. There is on hand at
each retail sales location inventory levels in amounts consistent with ordinary
business practices and at levels sufficient for each Loan Party and each of
their Subsidiaries to operate the business in the ordinary course.
SECTION 3.15. Capital Structure.
(a) Schedule 3.15(a) is a complete and correct list, as of the date hereof,
of all Subsidiaries of CAI, showing the jurisdiction of their incorporation or
organization and the percentage of the outstanding shares of each class of
capital stock (or other equivalent interest) owned, directly or indirectly, by
CAI. Except as disclosed in Schedule 3.15(a) and except for Liens created by the
Security Documents, CAI owns, directly or indirectly, free and clear of all
Liens or restrictions on transferability or voting, the percentage of
outstanding shares of such Subsidiaries as shown on Schedule 3.15(a) and all
such shares are validly issued, fully paid and non-assessable. There are no
outstanding warrants, options, contracts or commitments of any such Subsidiary
of any kind entitling any Person to purchase or otherwise acquire (i) any shares
of the capital stock of any such Subsidiary or (ii) any securities convertible
into or exchangeable for any shares of such capital stock. No securities are
outstanding which are convertible into or exchangeable for any shares of capital
stock of any such Subsidiary thereof.
(b) Schedule 3.15(b) is a complete and correct list, as of the date hereof,
of the outstanding shares of each class of capital stock (or other equivalent
interest) of CAI, showing the percentage held by each holder thereof. Except as
disclosed in Schedule 3.15(b) and except for Liens created by the Security
Documents, the Xxxxxxxx Group owns, directly or indirectly, free and clear of
all Liens or restrictions on transferability or voting, the percentage of
outstanding shares of CAI as shown on Schedule 3.15(b), and all shares of CAI
are validly issued, fully paid and non-assessable. Except as disclosed in
Schedule 3.15(b), there are no outstanding warrants, options, contracts or
commitments of CAI of any kind entitling any Person to purchase or otherwise
acquire (i) any shares of the capital stock of CAI or (ii) any securities
convertible into or exchangeable for any shares of such capital stock. No
securities are outstanding which are convertible into or exchangeable for any
shares of capital stock of CAI.
(c) CAI has not issued, and is not required to issue, any Disqualified
Capital Stock except as described on Schedule 3.15(c).
41
SECTION 3.16. Insurance. Schedule 3.16, attached hereto and incorporated
herein by this reference, is a true, correct and complete list and description
of all policies of insurance and fidelity bonds relating to the business of any
Loan Party or any of their Subsidiaries (except for any such policies maintained
to provide benefits to employees under a benefit plan or arrangement described
elsewhere herein), all of which are in full force and effect. All premiums
thereon have been paid, and the Borrowers have received no notice of
cancellation with respect thereto. There are no claims pending under any of said
policies or bonds or disputes with underwriters. There are no pending or
threatened terminations of, or premium increases with respect to, any of such
policies and bonds and each Loan Party and each of their Subsidiaries are in
compliance with all conditions contained therein. The Borrowers have no reason
to believe that such insurance is not, or since the date of its inception has
not been, adequate with respect to risks normally insured against by comparable
companies similarly situated. The Borrowers have delivered to the Administrative
Agent true, complete and correct copies of all of the above-described insurance
policies.
SECTION 3.17. Solvency. No Loan Party nor any of their Subsidiaries (i) is
"insolvent", as such term is used in the United States Bankruptcy Code of 1978,
as amended, and any successor statute, or the Texas Uniform Fraudulent Transfer
Act; (ii) is engaged in business or in a transaction, or is about to engage in
business or a transaction, for which its capital is unreasonably small, or (iii)
intends to incur, or believes it will incur, debts beyond its ability to pay as
they mature.
SECTION 3.18. Indebtedness. Attached hereto as Schedule 3.18 is a complete
list, as of the date hereof, of all agreements or instruments evidencing
Indebtedness of each Loan Party and each of their Subsidiaries (other than the
Loan Documents), showing as of the date hereof the principal amount outstanding
thereunder, the maturity date thereof and the amortization schedule thereunder.
ARTICLE IV
Conditions
SECTION 4.01. Insurance. The Administrative Agent shall have received all
such information as the Administrative Agent shall reasonably request concerning
the insurance maintained by each Loan Party and each of their Subsidiaries
described in Section 3.16 hereof, including, without limitation, as to those
policies identified on Schedule 3.16 as to which the Administrative Agent is
required to be loss payee or additional insured, certificates of insurance
naming the Administrative Agent as loss payee or additional insured, as the case
may be, and the Administrative Agent shall have approved the types and amounts
of such insurance and the issuers thereof.
SECTION 4.02. Payment of Expenses. The Borrowers shall have reimbursed the
Administrative Agent for all reasonable fees and expenses in connection with the
preparation of this Agreement and all documentation contemplated hereby, the
satisfaction of the condition set forth herein, the filing and recordation of
the Security Documents, and the consummation of the Transactions.
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SECTION 4.03. Corporate Review. The Administrative Agent shall have made
satisfactory completion of all corporate, ownership, solvency, organizational,
capital structure, environmental, employee benefit and retirement savings and
collateral audits of each Loan Party and each of their Subsidiaries by the
Administrative Agent as deemed necessary or prudent by the Administrative Agent.
SECTION 4.04. Required Documents and Certificates. The Administrative Agent
(or its counsel) shall have received, in addition to the items listed in
Sections 4.01 through 4.03, the following, in each case in form, scope and
substance satisfactory to the Lenders:
(i) a counterpart of this Agreement signed on behalf of such party or
written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signed signature page of this Agreement)
that such party has signed a counterpart of this Agreement, duly executed
by the Borrowers;
(ii) the Notes duly executed by the Borrowers;
(iii) an Officer's Certificate of each applicable Loan Party dated
substantially concurrently herewith certifying, inter alia, (A) true and
correct copies of the Articles of Incorporation and Bylaws (or equivalent
corporate documents), as amended and in effect, of such party, (B)
corporate resolutions duly adopted by the Board of Directors of such party
authorizing the transactions contemplated by the Loan Documents and (C) the
incumbency and specimen signatures of the officers of such party executing
documents on its behalf;
(iv) a certificate from the Secretary of State and other appropriate
public officials in each jurisdiction in which the Loan Parties are
organized or incorporated, as the case may be, as to the continued
existence and good standing of such party;
(v) a certificate from the appropriate public official of each
jurisdiction in which the Loan Parties are authorized and qualified to do
business as to the due qualification and good standing of such party;
(vi) a favorable written opinion (addressed to the Administrative
Agent and the Lenders and dated substantially concurrently herewith) of
Xxxxxxx & Xxxxx L.L.P., Texas counsel for the Loan Parties, covering such
other matters relating to the Loan Parties, this Agreement or the
Transactions as the Required Lenders shall reasonably request. The
Borrowers hereby request such counsel to deliver such opinion;
(vii) an initial Borrowing Base Report dated substantially
concurrently herewith in the form required by Section 5.01(d);
(viii) the Security Agreements;
(ix) the Mortgages, covering all real estate interests of the Loan
Parties, including but not limited to fee simple interests and leasehold
interests;
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(x) the Pledge and Security Agreements;
(xi) certificates representing the stock of CAI and its Subsidiaries,
pledged in accordance with the Pledge and Security Agreements, accompanied
by duly executed instruments of transfer or assignment in blank, in form
and substance satisfactory to the Administrative Agent;
(xii) the Guaranty Agreements;
(xiii) copies of all other requisite filing documents necessary to
perfect the Liens granted pursuant to the Security Documents and duly
executed releases or assignments of Liens and UCC-3 financing statements in
recordable form, and in form and substance satisfactory to the Lenders,
covering all of the collateral, as may be necessary to reflect that the
Liens granted to the Administrative Agent for the benefit of the Lenders
are first and prior Liens, except for the Liens permitted under Section
6.02 herein;
(xiv) duly executed Landlord Agreements as to any property consisting
of or located in property leased by any Loan Party, and
(xv) certified copies of Requests for Information of Copies (Form
UCC-11), or equivalent reports, listing all effective financing statements
which name any Loan Party (under its present name, any trade names and any
previous names) as debtor and which are filed, together with copies of all
such financing statements.
In addition, all legal matters incident to the transactions herein contemplated
shall be satisfactory to counsel for the Administrative Agent and the Lenders.
SECTION 4.05. Conditions Precedent to Each Loan. The obligation of each
Lender to make a Loan on the occasion of any Borrowing is subject to the
satisfaction of the following conditions:
(a) The representations and warranties of the Loan Parties set forth in the
Loan Documents shall be true and correct on and as of the date of such
Borrowing.
(b) At the time of and immediately after giving effect to such Borrowing,
no Default shall have occurred and be continuing and there shall have occurred
no event which would be reasonably likely to have a Material Adverse Effect.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrowers on the date thereof as to the matters specified in paragraphs (a)
and (b) of this Section.
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ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the principal of
and interest on each Loan and all fees payable hereunder shall have been paid in
full, the Borrowers covenant and agree with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The Borrowers
will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of CAI ending prior to
the closing of the IPO Transaction, the audited consolidated and consolidating
balance sheets and related statements of operations, stockholders' equity and
cash flows of CAI as of the end of and for such year, setting forth in each case
in comparative form the figures for the previous fiscal year, all reported on by
Ernst & Young, L.L.P. or other independent public accountants of recognized
national standing (without a "going concern" or like qualification or exception
and without any qualification or exception as to the scope of such audit) to the
effect that such consolidated and consolidating financial statements present
fairly in all material respects the financial condition and results of
operations of CAI and its consolidated Subsidiaries on a consolidated and
consolidating basis in accordance with GAAP consistently applied;
(b) within 90 days after the end of each fiscal year of Parent ending after
the closing of the IPO Transaction, the audited consolidated and consolidating
balance sheets and related statements of operations, stockholders' equity and
cash flows of Parent as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, all reported
on by Ernst & Young, L.L.P. or other independent public accountants of
recognized national standing (without a "going concern" or like qualification or
exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated and consolidating financial
statements present fairly in all material respects the financial condition and
results of operations of Parent and its consolidated Subsidiaries on a
consolidated and consolidating basis in accordance with GAAP consistently
applied (which may be in the form of SEC 10K);
(c) within 45 days after the end of each of the first three fiscal quarters
of CAI ending prior to the closing of the IPO Transaction, the consolidated and
consolidating balance sheets and related statements of operations, stockholders'
equity and cash flows of CAI as of the end of and for such fiscal quarter and
the then elapsed portion of the fiscal year, setting forth in each case in
comparative form the figures for the corresponding period or periods of (or, in
the case of the balance sheet, as of the end of) the previous fiscal year, all
certified by one of its Financial Officers as presenting fairly in all material
respects the financial condition and results of operations of CAI and its
consolidated Subsidiaries on a consolidated and consolidating basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;
(d) within 45 days after the end of each of the first three fiscal quarters
of Parent ending after the closing of the IPO Transaction, the consolidated and
consolidating balance sheets and related statements of operations, stockholders'
equity and cash flows of Parent as of
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the end of and for such fiscal quarter and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of Parent and its consolidated Subsidiaries on a
consolidated and consolidating basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes (which may be in the form of SEC l0Q);
(e) as soon as available, and in any event within 25 days after the end of
each month in each fiscal year of CAI, a monthly summary information report for
CAI and its Subsidiaries for the period then ended, in reasonable detail;
(f) within 25 days after the last day of each month, a Borrowing Base
Report in the form attached hereto as Exhibit B which contains a certification
as to the amount of Eligible Accounts Receivable, Eligible Inventory, Deferred
Sales Proceeds, and Unpurchased Receivables existing as of the last day of the
proceeding month, and a calculation of the then current Delinquency Rates,
Charge-Off Ratio, and Extension Ratio, all signed by a Financial Officer of CAI;
(g) concurrently with any delivery of financial statements under clause
(a), (c) or (e) above, a certificate of a Financial Officer of CAI, in the form
of Exhibit H hereto, (i) certifying as to whether a Default has occurred and, if
a Default has occurred, specifying the details thereof and any action taken or
proposed to be taken with respect thereto, (ii) setting forth reasonably
detailed calculations demonstrating compliance with Sections 6.18 through 6.22
and (iii) stating whether any change in GAAP or in the application thereof has
occurred since the date of the audited financial statements referred to in
Section 3.04 and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;
(h) concurrently with any delivery of financial statements under clause (a)
above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default (which certificate may
be limited to the extent required by accounting rules or guidelines);
(i) promptly upon receipt thereof, a copy of each other report or
"management letter" submitted to any Loan Party or any of their Subsidiaries by
their independent accountants in connection with any annual, interim or special
audit made by them;
(j) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by any
Loan Party or any of their Subsidiaries with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, as the
case may be; and
(k) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of any Loan
Party or any of their Subsidiaries, or compliance with the terms of any Loan
Document, including but not limited to
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financial projection and budgets, as the Administrative Agent or any Lender may
reasonably request.
SECTION 5.02. Notices of Material Events. The Borrowers will furnish to the
Administrative Agent and each Lender immediate written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting any Loan
Party or any Affiliate thereof that, if adversely determined, could reasonably
be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
liability of any Loan Party or any of their Subsidiaries in an aggregate amount
exceeding $500,000;
(d) any other development that results in, or could reasonably be expected
to result in, a Material Adverse Effect; and
(e) copies of all notices of default, notices, amendments, waivers and
other documents delivered or received by any Loan Party or any of their
Subsidiaries pursuant to the terms of any Voyager Document, the Seller
Subordinated Note or any Receivables Purchase Document.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of CAI setting forth the details
of the event or development requiring such notice and any action taken or
proposed to be taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business. Each Borrower will, and will
cause the other Loan Parties and each of their Subsidiaries to, do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of its business; provided that the foregoing
shall not prohibit any merger, consolidation, liquidation or dissolution
permitted under Section 6.03.
SECTION 5.04. Payment of Obligations.
(a) Each Borrower will, and will cause the other Loan Parties and each of
their Subsidiaries to, pay its obligations before the same shall become
delinquent or in default, including, without limitation, all taxes, assessments,
and governmental charges or levies imposed upon any Loan Party or any of their
Subsidiaries or upon the income of any property of any Loan Party or any of
their Subsidiaries as well as all material claims of any kind (including,
without limitation, claims for labor, materials, supplies, and rent), except
where (a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) the applicable Person has set aside on its books
adequate reserves with respect thereto in accordance with
47
GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect or result in a
Lien against its property.
(b) Each Borrower will, and will cause the other Loan Parties and each of
their Subsidiaries to, promptly pay all income, franchise and other taxes owing
by the applicable Person and any stamp taxes or other taxes which may be
required to be paid with respect to the Notes, the Security Documents or any
other Loan Documents. In the event of the enactment after this date of any law
of any Governmental Authority applicable to the Administrative Agent or the
Lenders, the Mortgaged Property or the Loan Documents, deducting from the value
of property for the purpose of taxation any lien or security interest thereon,
or imposing upon the Administrative Agent or any Lender the payment of the whole
or any part of the taxes or assessments or charges or Liens required by the Loan
Documents to be paid by any Loan Party, or changing in any way the laws relating
to the taxation of deeds of trust or mortgages or security agreements or debts
secured by deeds of trust or mortgages or security agreements or the interest of
the mortgagee or secured party in the property covered thereby, or the manner of
collection of such taxes, so as to affect the Security Documents or the
indebtedness secured thereby or any Administrative Agent or any Lender, then,
and in any such event each Borrower will, upon demand by the Administrative
Agent, pay such taxes, assessments, charges or Liens, or reimburse the
Administrative Agent or the Lenders therefor to the extent permitted by
applicable law.
SECTION 5.05. Maintenance of Properties; Insurance.
(a) Each Borrower will, and will cause the other Loan Parties and each of
their Subsidiaries to, (i) keep and maintain its property in good working order
and condition, ordinary wear and tear excepted, and (ii) maintain, with
financially sound and reputable insurance companies, insurance in such amounts
and against such risks as are customarily maintained by companies engaged in the
same or similar businesses operating in the same or similar locations, and
furnish to the Administrative Agent, together with each delivery of financial
statements under Section 5.01(a), an Officer's Certificate containing full
information as to the insurance carried.
(b) With respect to Mortgaged Property constituting real property, each
Borrower will maintain and cause the other Loan Parties and each of their
Subsidiaries to maintain the following insurance: (1) all-risk insurance with
respect to all such insurable Mortgaged Property, against loss or damage by
fire, lightning, windstorm, explosion, hail, tornado and such hazards as are
presently included in so-called "all-risk" coverage, in an amount not less than
the amount in effect on the date of this Agreement and disclosed to the
Administrative Agent in writing; (2) if and to the extent any portion of such
Mortgaged Property is in a special flood hazard area, a flood insurance policy
in an amount equal to the lesser of the principal face amount of the Notes or
the maximum amount of flood insurance available; and (3) statutory worker's
compensation insurance with respect to any work on or about such Mortgaged
Property. All insurance policies shall require not less than thirty (30) days'
prior written notice to the Administrative Agent of any cancellation or change
of coverage. All insurance policies maintained, or caused to be maintained, with
respect to such Mortgaged Property, except for public liability insurance, shall
provide that each such policy shall be primary without right of contribution
from any other insurance that may be carried by any Loan Party or any of their
Subsidiaries or the Lenders and
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that all of the provisions thereof, except the limits of liability, shall
operate in the same manner as if there were a separate policy covering each
insured. If any insurer which has issued a policy of title, hazard, liability or
other insurance required pursuant to this Section or any other Loan Document to
which any Loan Party or any of their Subsidiaries is a party becomes insolvent
or the subject of any bankruptcy, receivership or similar proceeding or if in
the reasonable opinion the financial responsibility of such insurer is or
becomes inadequate, the Borrowers shall, or shall cause the applicable Person
to, in each instance promptly upon the request of the Administrative Agent and
at Borrowers' expense, obtain and deliver to the Administrative Agent a like
policy (or, if and to the extent permitted by the Administrative Agent, a
certificate of insurance) issued by another insurer, which insurer and policy
meet the requirements of this Section or such other Loan Document, as the case
may be. Without limiting the discretion of the Administrative Agent with respect
to required endorsements to insurance policies, all such policies for loss of or
damage to such Mortgaged Property shall contain a standard mortgage clause
(without contribution) naming the Administrative Agent as mortgagee with loss
proceeds payable to the Administrative Agent notwithstanding (i) any act,
failure to act or negligence of or violation of any warranty, declaration or
condition contained in any such policy by any named insured; (ii) the occupation
or use of such Mortgaged Property for purposes more hazardous than permitted by
the terms of any such policy; (iii) any foreclosure or other action by the
Administrative Agent under the Loan Documents; or (iv) any change in title to or
ownership of such Mortgaged Property or any portion thereof, such proceeds to be
held for application as provided in the Loan Documents. The originals of each
initial insurance policy (or to the extent permitted by the Administrative
Agent, a copy of the original policy and a satisfactory certificate of
insurance) shall be delivered to the Administrative Agent at the time of
execution of this Agreement, with premiums fully paid, and each renewal or
substitute policy (or certificate) shall be delivered to the Administrative
Agent with premiums fully paid, at least ten (10) days before the termination of
the policy it renews or replaces. Each Borrower shall pay, and cause the other
Loan Parties and each of their Subsidiaries to pay, all premiums on policies
required hereunder as they become due and payable and promptly deliver to the
Administrative Agent evidence satisfactory to the Administrative Agent of the
timely payment thereof. If any loss occurs at any time when any Loan Party or
any of their Subsidiaries has failed to perform the covenants and agreements in
this paragraph, the Administrative Agent shall nevertheless be entitled to the
benefit of all insurance covering the loss and held by or for the applicable
Person, to the same extent as if it had been made payable to the Administrative
Agent or the Administrative Agent.
SECTION 5.06. Books and Records; Inspection Rights. Each Borrower will, and
will cause the other Loan Parties and each of their Subsidiaries to, keep proper
books of record and account in which full, true and correct entries are made of
all dealings and transactions in relation to its business and activities. Each
Borrower will, and will cause the other Loan Parties and each of their
Subsidiaries to, permit any representatives designated by the Administrative
Agent or any Lender, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested.
SECTION 5.07. Compliance with Laws. Each Borrower will, and will cause the
other Loan Parties and each of their Subsidiaries to, comply with all laws,
rules, regulations and orders of any Governmental Authority applicable to it or
its property.
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SECTION 5.08. Use of Proceeds. The proceeds of the Revolving Loans will be
used only for general corporate purposes, including working capital and capital
expenditures. No part of the proceeds of any Loan will be used, whether directly
or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations G, U and X.
SECTION 5.09. ERISA. Each Borrower will, and will cause the other Loan
Parties and each of their Subsidiaries to, at all times:
(a) Make contributions to each Plan in a timely manner and in an amount
sufficient to comply with the minimum funding standards requirements of ERISA;
(b) Immediately upon acquiring knowledge of any "reportable event" or of
any "prohibited transaction" (as such terms are defined in the Code) in
connection with any Plan, furnish the Administrative Agent with a statement
executed by the president or chief financial officer of CAI setting forth the
details thereof and the action which the Borrowers propose to take with respect
thereto and, when known, any action taken by the Internal Revenue Service with
respect thereto;
(c) Notify the Administrative Agent promptly upon receipt by any Loan Party
or any of their Subsidiaries of any notice of the institution of any proceeding
or other action which may result in the termination of any Plan and furnish to
the Administrative Agent copies of such notice;
(d) Acquire and maintain in amounts satisfactory to the Lenders from either
the Pension Benefit Guaranty Corporation or authorized private insurers, when
available, the contingent employer liability coverage insurance required under
ERISA;
(e) Furnish the Administrative Agent with copies of the annual report for
each Plan filed with the Internal Revenue Service not later than thirty (30)
days after such report has been filed; and
(f) Furnish the Administrative Agent with copies of any request for waiver
of the funding standards or extension of the amortization periods required by
Sections 303 and 304 of ERISA or Section 412 of the Code promptly after the
request is submitted to the Secretary of the Treasury, the Department of Labor
or the Internal Revenue Service, as the case may be.
SECTION 5.10. Security and Further Assurances. Whenever and as often as the
Administrative Agent may reasonably request, each Borrower will, and will cause
the other Loan Parties and each of their Subsidiaries to, at its own expense,
promptly execute and deliver all such further instruments (including, without
limiting the generality of the foregoing, additional security agreements, and
financing statements) and do such other acts as the Administrative Agent may
request for the purpose of protecting or perfecting any Lien created or granted
or intended to be created or granted in the Security Documents or in order to
insure that any such Lien is of first priority, subject only to Liens permitted
by Section 6.02 hereof, or in order to police or protect any Collateral or
otherwise to carry out more effectually the purposes and intent of the Loan
Documents. Without limiting the generality of the foregoing, Borrowers will, as
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soon as practicable after the date hereof, cause to be duly recorded, published,
registered and filed all Security Documents, in such manner and in such places
as is required by law to establish, perfect, preserve and protect the rights and
first priority security interests of the parties thereto and their respective
successors and assigns in all of the Collateral, subject to Liens permitted
under Section 6.02. Borrowers will pay all taxes, fees and other charges then
due in connection with the execution, delivery, recording, publishing,
registration and filing of such documents or instruments in such places.
SECTION 5.11. Compliance with Environmental Laws. Each Borrower will, and
will cause the other Loan Parties and each of their Subsidiaries to, at all
times:
(a) use and operate all of their respective facilities and properties in
material compliance with all Environmental Laws, keep all necessary permits,
approvals, orders, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in material compliance therewith,
handle all Hazardous Materials in material compliance with all applicable
Environmental Laws and dispose of all Hazardous Materials generated by any such
Person or at any property owned or leased by them at facilities or with carriers
that maintain valid permits, approvals, certificates, licenses or other
authorizations for such disposal under applicable Environmental Laws;
(b) promptly notify the Administrative Agent and provide copies upon
receipt of all written claims, complaints, notices or inquiries relating to the
environmental condition of the facilities and properties of any such Person or
their respective compliance with Environmental Laws; and
(c) promptly upon request by Administrative Agent, permit any Person
designated by the Administrative Agent, at the Borrowers' expense and upon
reasonable notice, to visit such Person and any of their respective properties
and discuss their respective environmental affairs with their principal
officers, all at such times as the Administrative Agent may reasonably request,
and without limiting the generality of the foregoing, permit any Person, agent
or environmental consultant designated by the Administrative Agent upon
reasonable notice, and at the Borrowers' expense, to (i) have access to and
examine and inspect any of the properties, books and records of such Person, and
(ii) conduct environmental assessments in respect of such properties, in scope
and substance satisfactory to Administrative Agent.
SECTION 5.12. Landlord's Agreements. Each Borrower will, and will cause the
other Loan Parties to, at Borrowers' expense, deliver to the Administrative
Agent a Landlord's Agreement with respect to each leased location at which any
equipment or inventory of any such Person is stored or maintained.
SECTION 5.13. Additional Subsidiaries. Within thirty (30) Business Days any
Loan Party or any of their Subsidiaries creates, acquires or otherwise forms a
Subsidiary, Borrowers shall:
(a) execute and deliver, or cause the Person owning all of the outstanding
equity interests of such Subsidiary to execute and deliver, to the
Administrative Agent on behalf of the Lenders an agreement, substantially
similar to the Pledge and Security Agreements, with such
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changes as shall be necessary in the circumstances, pursuant to which all of the
outstanding equity interests of such Subsidiary shall be pledged to the
Administrative Agent on behalf of the Lenders, together with any certificates
representing all such equity interests so pledged and for each such certificate
a stock power executed in blank;
(b) cause such Subsidiary to execute and deliver to the Administrative
Agent on behalf of the Lenders (i) the Supplement to the Guaranty Agreement;
(ii) an agreement substantially similar to the Security Agreement and (iii) a
Mortgage as to all real property interests owned or leased by such Subsidiary;
(c) cause such Subsidiary to execute and deliver to the Administrative
Agent on behalf of the Lenders appropriate Financing Statements, each with such
changes as shall be necessary in the circumstances, covering such Collateral of
such Subsidiary of the general types and values covered by the Security
Documents executed on or prior to the date hereof;
(d) deliver or cause to be delivered to the Administrative Agent on behalf
of the Lenders all agreements, documents, instruments and other writings
described in Section 4.04, with respect to such Subsidiary;
(e) cause such Subsidiary to deliver to the Administrative Agent on behalf
of the Lenders a Landlord's Agreement with respect to each leased location
located at which any inventory of such Person is stored or maintained; and
(f) deliver or cause to be delivered to the Administrative Agent on behalf
of the Lenders all such information regarding the condition (financial or
otherwise), business and operations of such Subsidiary as the Administrative
Agent or any Lender through the Administrative Agent may reasonably request.
Notwithstanding anything to the contrary set forth in this Section, none of Conn
Funding I LP, Conn Funding II LP, Conn Funding LLC, Conn Funding II GP LLC, Conn
CC LP, Conn Credit LLC or CCC shall be treated as a new Subsidiary under this
Section (other than for purposes of the pledge of limited partnership interests
in and to Conn Funding II LP, and, if any material assets are owned by Conn
Funding I LP, limited partnership interests in Conn Funding I LP, pursuant to
Section 5.13(a) above) or be required to execute or deliver any documents under
this Section so long as the sole property owned by such entities shall be (i) in
the case of CCC, a general partnership interest in and to Conn CC LP and limited
liability company membership interests in and to Conn Credit LLC, (ii) in the
case of Conn Credit LLC, a limited partnership interest in and to Conn CC LP and
a limited partnership interest in Conn Funding I LP, (iii) in the case of Conn
CC LP, contracts with Conn Funding I LP regarding the servicing of receivables
purchased by Conn Funding I LP, (iv) in the case of Conn Funding LLC, a general
partnership interest in and to Conn Funding I LP, (v) in the case of Conn
Funding II GP LLC, a general partnership interest in and to Conn Funding II LP
and (vi) in the case of Conn Funding II, LP, the Trust Estate (as such term is
defined in the Conn Funding II Indenture). If any of such entities shall own
property other than the property described in the preceding sentence, then such
entity shall be treated as a new Subsidiary for purposes of this Section 5.13
and shall be required to execute and deliver the documentation required by this
Section.
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SECTION 5.14. Patents, Trademarks and Licenses. Each Borrower shall, and
shall cause the other Loan Parties and each of their Subsidiaries to, maintain
all assets, licenses, patents, copyrights, trademarks, service marks, trade
names, permits and other governmental approvals and authorizations necessary to
conduct its business.
SECTION 5.15. Notice of Labor Disputes. Each Borrower shall notify the
Administrative Agent in writing upon learning of (i) any material strike or
walkouts or (ii) any material labor dispute to which any Loan Party or any of
their Subsidiaries becomes a party, and the expiration or termination of any
labor contract to which any Loan Party or any of their Subsidiaries is a party
or by which any Loan Party or any of their Subsidiaries is bound or of any
negotiations with respect thereto.
SECTION 5.16. Fee Properties and Leases. Concurrent with the acquisition of
any fee property of which the net book value exceeds $250,000 or the execution
of any lease of real property for a term of five years or more (excluding any
optional renewal terms), each Borrower will, and will cause the other Loan
Parties and each of their Subsidiaries to, execute, acknowledge and deliver to
the Administrative Agent a deed of trust or mortgage, as the case may be, in
form and substance satisfactory to the Administrative Agent, covering (i) such
fee property or (ii) all of such Person's rights and interests as lessee, in, to
and under such real estate lease, together with evidence satisfactory to the
Administrative Agent and its counsel, in form and substance satisfactory to the
Administrative Agent, that such deed of trust or mortgage creates a valid, first
and prior Lien on the fee estate or the leasehold estate, as the case may be, in
favor of the Administrative Agent subject only to Liens permitted under Section
6.02 hereof. To the extent that Administrative Agent is reasonably satisfied
that any applicable landlord or lessor has failed or refused to grant its
consent to such a leasehold mortgage or lien notwithstanding good faith efforts
by Borrower to obtain such consent, Administrative Agent may, in its discretion,
waive of the requirement for a leasehold mortgages or deeds of trust covering
the applicable site, without any necessity for notice to or additional consent
by any other Lender.
SECTION 5.17. Lease and Investment Schedule. Each Borrower will deliver,
and will cause the other Loan Parties and each of their Subsidiaries to deliver,
to the Administrative Agent,
(a) together with each delivery of financial statements under Section
5.01(a), a current, complete schedule of all agreements to rent or lease any
real property, or any personal property with rental payments in excess of
$250,000 over the term of the lease, to which any Loan Party or any of their
Subsidiaries is a party lessee, showing the total amounts payable under each
such agreement, the amounts and due dates of payments thereunder and containing
a description of the rented or leased property, and all other information the
Lenders may request, all in a form satisfactory to the Lenders;
(b) together with each delivery of financial statements under Section
5.01(a) a current, complete schedule listing all Persons (except Subsidiaries)
whose equity or debt any Loan Party or any of their Subsidiaries owns or holds,
containing all information required by, and in a form satisfactory to, the
Lenders; and
53
(c) notices of any default by any Loan Party or any of their Subsidiaries
with respect to the leases described in Section 5.17(a).
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full,
each Borrower covenants and agrees with the Lenders that:
SECTION 6.01. Indebtedness. Each Borrower will not, and will not permit any
Loan Party or any of their Subsidiaries to, create, incur, assume or permit to
exist any Indebtedness, except:
(a) Indebtedness evidenced by the Loan Documents;
(b) endorsements in the ordinary course of business of negotiable
instruments in the course of collection;
(c) Indebtedness of CAI pursuant to the Real Estate Documentation, in an
aggregate amount at any time not to exceed $675,000;
(d) Indebtedness that is evidenced by the Originator Notes and obligations
under the Receivables Purchase Documents;
(e) Indebtedness of CAI to Voyager Insurance Company pursuant to the
Voyager Debenture, together with the guarantee thereof by CAI, in an aggregate
amount at any time not to exceed $3,500,000, to the extent that such
Indebtedness is subject to the Voyager Subordination and Standstill Agreement;
(f) Indebtedness of CAI incurred in connection with the construction of a
new distribution center, in an aggregate principal amount at any time not to
exceed $7,500,000, provided that such Indebtedness is not increased, renewed or
extended or permitted to remain outstanding after the stated maturity thereof;
(g) unsecured Indebtedness of CAI to X.X. Xxxx, Xx. evidenced by the Seller
Subordinated Note, in an aggregate principal amount at any time not to exceed
$11,500,000, to the extent such Indebtedness is subject to the Seller
Subordination Agreement, provided that such Indebtedness is not increased,
renewed or extended or permitted to remain outstanding after the stated maturity
thereof;
(h) contingent Indebtedness in respect of the Collection Account Letters of
Credit provided that the aggregate amounts of such contingent Indebtedness may
not exceed $15,000,000;
(i) other unsecured Indebtedness in aggregate principal amount at any time
not to exceed $10,000,000
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(j) other Indebtedness of the Consolidated Group incurred in the ordinary
course of business to finance the acquisition of assets (including, without
limitation, indebtedness of the Consolidated Group incurred on ordinary trade
terms which is owing to vendors, suppliers, or such Persons providing inventory
for use by the Consolidated Group in the ordinary course of their business) in
an aggregate principal amount at any time not to exceed $25,000,000;
(k) contingent unsecured Indebtedness in respect of letters of credit
issued to support xxxxxxx'x compensation insurance maintained by the Borrowers
or their Subsidiaries; provided that the aggregate amounts of such contingent
Indebtedness may not exceed $2,500,000 at any time.
SECTION 6.02. Liens. Each Borrower will not, and will not permit any Loan
Party or any of their Subsidiaries to, create, incur, assume or permit to exist
any Lien on any property or asset now owned or hereafter acquired by it, or
assign or sell any income or revenues (including accounts receivable) or rights
in respect of any thereof, except:
(a) Permitted Encumbrances;
(b) Liens in favor of the Administrative Agent, for the benefit of the
Lenders, created by the Security Documents;
(c) Liens securing the Indebtedness described in Section 6.01(c), provided
that such Liens do not cover any property other than that subject to such Lien
on the date hereof;
(d) Liens created by the Voyager Security Agreement securing the
Indebtedness of CAI described in Section 6.01(e);
(e) Liens securing the Indebtedness described in Section 6.01(f), provided
that such Liens do not cover any property other than such distribution center;
(f) Liens on assets and identifiable cash proceeds thereof which are not
commingled with any other property of the Consolidated Group, which secure
Indebtedness of the Consolidated Group incurred in the ordinary course of
business to finance the acquisition of assets (including, without limitation,
indebtedness of the Consolidated Group incurred on ordinary trade terms which is
owing to vendors, suppliers, or such Persons providing inventory for use by the
Consolidated Group in the ordinary course of their business); provided that the
aggregate principal amount of all obligations subject to the Liens permitted by
this Section 6.02(f) shall not at any time exceed $25,000,000;
(g) Liens on property of Conn Funding I LP and Conn Funding II LP.
SECTION 6.03. Fundamental Changes. Each Borrower will not, and will not
permit any Loan Party or any of their Subsidiaries to, merge into or consolidate
with any other Person, or permit any other Person to merge into or consolidate
with it, or sell, transfer, lease or otherwise dispose of (in one transaction or
in a series of transactions) all or any substantial part of its assets, or any
stock or Indebtedness of any of their Subsidiaries (in each case, whether now
55
owned or hereafter acquired), or permit any Subsidiary to issue or dispose of
any of its stock, or take any action (directly or indirectly) which would have
the effect of causing any Subsidiary to cease to be a wholly-owned Subsidiary,
or issue any Disqualified Capital Stock except for the issuance of Disqualified
Capital Stock as described in Schedule 3.15(c), or liquidate or dissolve;
provided the foregoing shall not prohibit the transactions contemplated by the
Receivables Purchase Documents or the IPO Transaction. Notwithstanding anything
herein to the contrary, any Subsidiary which is wholly-owned (directly or
indirectly) by CAI may liquidate or dissolve if CAI determines in good faith
that such liquidation or dissolution is in the best interests of CAI and is not
materially disadvantageous to the Lenders. The Borrowers shall promptly deliver
written notice to the Administrative Agent of each such liquidation or
dissolution.
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions.
Each Borrower will not, and will not permit any Loan Party or any of their
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person any capital stock, evidences of indebtedness or other securities
(including any option, warrant or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, guarantee any obligations
of, or make or permit to exist any investment or any other interest in, any
other Person, or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person constituting a business unit, or
become a general partner of any other Person, except:
(a) Permitted Investments;
(b) investments existing on the date hereof by any Borrower in the capital
stock of its Subsidiaries and, after the closing of the IPO Transaction,
investments by Parent in the capital stock of CAI;
(c) loans or advances permitted under Section 6.01 hereof;
(d) Guarantees by the Borrowers or their Subsidiaries, in an aggregate
amount not to exceed $15,000,000 at any one time outstanding, of Indebtedness
incurred in connection with the acquisition and development of sites (and
construction of improvements thereon) which are subject to leases in favor of a
Borrower or a Subsidiary of a Borrower (such Guarantees to be permitted in
addition to and cumulative of the other Indebtedness permitted under Section
6.01 hereof), and
(e) investments in the form of membership or partnership interests, as
applicable, in Conn Funding LLC, Conn Funding I LP, Conn Funding II LP and Conn
Funding II GP LLC.
SECTION 6.05. Hedging Agreements. Each Borrower will not, and will not
permit any Loan Party or any of their Subsidiaries to, enter into any Hedging
Agreement, other than Hedging Agreements entered into by any Loan Party or any
of their Subsidiaries in the ordinary course of business to hedge or mitigate
risks to which any Loan Party or any of their Subsidiaries is exposed in the
conduct of its business or the management of its liabilities.
SECTION 6.06. Restricted Payments. Each Borrower will not, and will not
permit any of their Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment other than as specifically
included in the definition of the IPO Transaction;
56
provided, however, that so long as no Default or Event of Default has occurred,
is continuing or would be created thereby, (i) the Borrowers and their
Subsidiaries may make Restricted Payments to retiring or terminated employees
(other than Xxxxxx Xxxxxxxxx) in an amount not to exceed, in the aggregate from
and after August 1, 2002, $2,000,000, (ii) the Borrowers and their Subsidiaries
may make Restricted Payments to Xxxxxx Xxxxxxxxx upon his retirement or
termination in an amount not to exceed, in the aggregate, $3,200,000 and (iii)
upon the closing of the IPO Transaction and so long as such closing occurs on or
before July 31, 2003 and the net proceeds realized therefrom equal or exceed
$35,000,000, CAI may thereafter make Restricted Payments in an aggregate amount
not to exceed $5,000,000. Notwithstanding anything herein to the contrary, any
Subsidiary which is wholly-owned (directly or indirectly) by CAI may declare and
pay dividends to the owners of its equity interests.
SECTION 6.07. Transactions with Affiliates. Each Borrower will not, and
will not permit any Loan Party or any of their Subsidiaries to, sell, lease or
otherwise transfer any property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except in the ordinary course of
business at prices and on terms and conditions not less favorable to such Person
than could be obtained on an arm's-length basis from unrelated third parties.
SECTION 6.08. Restrictive Agreements. Each Borrower will not, and will not
permit any Loan Party or any of their Subsidiaries to, directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of any Loan
Party or any of their Subsidiaries to create, incur or permit to exist any Lien
upon any of its property or assets, or (b) the ability of any Subsidiary of CAI
to pay dividends or other distributions with respect to any shares of its
capital stock or to make or repay loans or advances to CAI or any other
Subsidiary of CAI or to Guarantee Indebtedness of CAI or any other Subsidiary of
CAI; provided that (i) the foregoing shall not apply to restrictions and
conditions imposed by law or by this Agreement, (ii) the foregoing shall not
apply to restrictions and conditions existing on the date hereof identified on
Schedule 6.08 (but shall apply to any extension or renewal of, or any amendment
or modification expanding the scope of, any such restriction or condition),
(iii) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such sale,
provided such restrictions and conditions apply only to such Subsidiary that is
to be sold and such sale is permitted hereunder, (iv) clause (a) of the
foregoing shall not apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness and (v) clause (a) of the foregoing shall not apply to customary
provisions in leases and other contracts restricting the assignment thereof.
SECTION 6.09. Certain Contracts. Except as identified in Schedule 6.09,
each Borrower will not, and will not permit any Loan Party or any of their
Subsidiaries to, enter into or be a party to:
(a) any contracts providing for the making by any Loan Party or any of
their Subsidiaries of loans, advances or capital contributions to any Person, or
for the purchase of any property from any Person, in each case primarily in
order to enable such Person to maintain any balance sheet condition or to pay
debts, dividends or expenses, or
57
(b) any contract for the purchase of materials, supplies or other property
or services if such contract (or any related document) requires that payment by
any Loan Party or any of their Subsidiaries for such materials, supplies or
other property or services shall be made regardless of whether or not delivery
of such materials, supplies or other property or services is ever made or
tendered, or
(c) any contract to rent or lease (as lessee) any real or personal property
if such contract (or any related document) provides that the obligation to make
payments thereunder is absolute and unconditional under conditions not
customarily found in commercial leases then in general use or requires that the
lessee purchase or otherwise acquire securities or obligations of the lessor
(provided that this subsection (c) shall not be construed to prevent any Loan
Party or any of their Subsidiaries from being a party to or complying with any
provision of any lease to which any of them is a party on the date hereof).
SECTION 6.10. Discount or Sale of Receivables. Each Borrower will not, and
will not permit any Loan Party or any of their Subsidiaries to, discount (except
discounts given in the ordinary course of business in connection with credit
card and programs and vendor promotional activity and in connection with the
settlement of claims against manufacturers in the ordinary course of business)
or sell with recourse, or sell for less than the face value thereof, any of its
notes receivable, receivables under leases or other accounts receivable, except
for any sale of receivables by CAI or CAILP or any of their Subsidiaries to Conn
Funding I LP or Conn Funding II LP, or by Conn Funding I LP to Conn Funding II
LP, under the Receivables Purchase Agreement.
SECTION 6.11. Change in Accounting Method. Each Borrower will not, and will
not permit any Loan Party or any of their Subsidiaries to, make any change in
the method of computing depreciation for either tax or book purposes or any
other material change in accounting method without the Required Lenders' prior
written approval, except for any changes required by GAAP or applicable law.
Each Borrower will not, and will not permit any Loan Party or any of their
Subsidiaries to, change its fiscal year.
SECTION 6.12. Sales and Leasebacks. Except for sale and leaseback
transactions entered into after February 1, 1999 in an aggregate amount not to
exceed $10,000,000, each Borrower will not, and will not permit any Loan Party
or any of their Subsidiaries to, become liable, directly or indirectly, with
respect to any lease or property whether now owned or hereafter acquired (i)
which such Person has sold or transferred or is to sell or transfer to any other
Person or (ii) which such Person intends to use for substantially the same
purposes as any other property which has been or is to be sold or transferred by
such Person to any other Person in connection with such lease.
SECTION 6.13. Sale of Inventory. Each Borrower will not, and will not
permit any Loan Party or any of their Subsidiaries to, make any sale, lease or
other disposition of inventory except in the ordinary course of business.
58
SECTION 6.14. Nature of Business. Each Borrower will not, and will not
permit any Loan Party or any of their Subsidiaries to, engage in any line of
business other than the business as presently conducted or related thereto.
SECTION 6.15. Hazardous Materials. Each Borrower will not, and will not
permit any Loan Party or any of their Subsidiaries to (a) cause or permit any
Hazardous Materials to be treated, stored, or disposed of in a manner which
could reasonably be expected to result, singularly or in the aggregate, (i) in a
Material Adverse Effect or (ii) in costs, liabilities or expenses relating to
remediation under or violations of Environmental Laws in excess of $500,000; (b)
cause or permit any part of any property of any Loan Party or any of their
Subsidiaries to be used as a manufacturing, treatment, storage or disposal
facility for Hazardous Materials, where such action could reasonably be expected
to result, singularly or in the aggregate, (i) in a Material Adverse Effect or
(ii) in costs, liabilities or expenses relating to remediation under or
violations of Environmental Laws in excess of $500,000; or (c) cause or suffer
any Liens to be recorded against any property of any Loan Party or any of their
Subsidiaries as a consequence of, or in any way related to, the presence,
remediation, or disposal of Hazardous Materials in or about any property of any
Loan Party or any of their Subsidiaries, including any so-called state, federal
or local "superfund" lien relating to such matters.
SECTION 6.16. Amendment of Charter Documents. Each Borrower will not effect
any material amendment to or material modification of its charter documents or
by-laws, and will not permit any Loan Party or any of their Subsidiaries to
effect any material amendment to or material modification of their charter
documents or by-laws. Lenders agree that the changes required by the IPO
Transaction shall not constitute a violation of this Section.
SECTION 6.17. Use of Proceeds. The Borrowers will not use, nor permit the
use of, all or any portion of any Loan for any purpose not permitted by Section
5.09 hereof.
SECTION 6.18. Debt Service Coverage Ratio. The Borrowers will not permit
the ratio of (i) Consolidated EBITDA plus Consolidated Rent Expense minus
Consolidated Capital Expenditures divided by (ii) Consolidated Cash Interest
Expense (exclusive of any fees paid in respect of the undrawn face amounts of
the Collection Account Letters of Credit) plus Consolidated Rent Expense, as
determined as of the last day of each fiscal quarter for the twelve-month period
ending on such day, to be less than the ratio set forth below opposite the
period in which such fiscal quarter ends:
Period Ratio
------ -----
October 31, 2002
to the later of January
31, 2004 or the date of the
closing of the IPO Transaction 1.75 to 1.00
Thereafter 2.00 to 1.00
59
To the extent the foregoing applies to a period prior to the effective date of
this Agreement, this provision shall be deemed to constitute an amendment to the
July 14, 1998 Credit Agreement referred to in Section 9.17 hereof.
SECTION 6.19. Total Leverage Ratio. The Borrowers will not permit the ratio
of (i) the sum of (x) Consolidated Total Debt (exclusive of the undrawn face
amounts of the Collection Account Letters of Credit and the undrawn face amounts
of the Bank of America Letters of Credit) plus (y) eight times Consolidated Rent
Expense divided by (ii) Consolidated EBITDA plus Consolidated Rent Expense, as
determined as of the last day of each fiscal quarter for the twelve-month period
ending on such day, to be greater than the ratio set forth below opposite the
period in which such fiscal quarter ends:
Period Ratio
------ -----
October 31, 2002
to the date of the
closing of the IPO Transaction 3.50 to 1.00
Thereafter 2.75 to 1.00
To the extent the foregoing applies to a period prior to the effective date of
this Agreement, this provision shall be deemed to constitute an amendment to the
July 14, 1998 Credit Agreement referred to in Section 9.17 hereof.
SECTION 6.20. Net Worth. The Borrowers will not permit, at any time,
Consolidated Net Worth to be less than the sum of (i) $55,000,000 plus (ii) 75%
of positive Net Income generated after May 1, 2002 plus (iii) 100% of any
capital stock or other ownership or profit interest or any securities
convertible into or exchangeable for capital stock or other ownership or profit
interest or any warrants, rights or options to acquire the same, issued after
May 1, 2002. Any gains attributable to the effects of Statements of Financial
Accounting Standards Nos. 125/140 and/or 133, or their successors, and any
losses attributable thereto, shall be excluded in determining Consolidated Net
Worth for purposes of this Section.
SECTION 6.21. Extension, Delinquencies, Charge-Offs.
(a) The Borrowers will not permit the Charge-Off Ratio to be greater than
..05 to 1.00, determined as of the last day of each month averaged for the
three-month period ended on such date.
(b) The Borrowers will not permit the Extension Ratio to be greater than
..04 to 1.00, determined as of the last day of each month averaged for the
three-month period ended on such date.
(c) The Borrowers will not permit the Delinquency Ratio to be greater than
..120 to 1.00, determined as of the last day of each month averaged for the
three-month period ended on such date.
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SECTION 6.22. Consolidated Capital Expenditures. The Borrowers will not
permit the Consolidated Group to make Consolidated Capital Expenditures,
measured during any fiscal year, in excess of (i) $17,500,000 at any time prior
to the closing of the IPO Transaction (and after the closing of the IPO
Transaction, if such closing occurs after July 31, 2003 or if the net proceeds
realized therefrom are less than $35,000,000) and (ii) $20,000,000 at any time
following the closing of the IPO Transaction so long as such closing occurs on
or before July 31, 2003 and the net proceeds realized therefrom equal or exceed
$35,000,000.
SECTION 6.23. Prepayment of Indebtedness. Each Borrower will not, and will
not permit any Loan Party or any of their Subsidiaries to, directly or
indirectly, prepay (by acceleration or otherwise) any Indebtedness (other than
to the Agents and the Lenders), or repurchase, redeem, retire or otherwise
acquire any Indebtedness of any Loan Party or any of their Subsidiaries if a
Default or Event of Default exists prior to or after giving effect thereto,
provided however, in no event shall any Loan Party or any of their Subsidiaries
take any such action with respect to the Subordinated Debt prior to the
repayment in full of the Obligations. Notwithstanding the foregoing, after the
prepayment of the Term Loans required by Section 2.09(c), Borrowers may use any
remaining proceeds realized from the IPO Transaction to prepay Subordinated Debt
or any other Indebtedness of any Loan Party.
SECTION 6.24. Issuance of Shares. CAI will not issue, sell or otherwise
dispose of any shares of its capital stock or other equity securities, or
rights, warrants or options to purchase or acquire any shares or equity
securities, except in connection with the IPO Transaction and except as
otherwise permitted by other Sections of this Agreement. Prior to the closing of
the IPO Transaction, CAI shall at all times cause at least 60% of all common
stock and at least 70% of all preferred stock of CAI to be pledged to the
Administrative Agent for the benefit of Lenders pursuant to a Pledge and
Security Agreement, whereby the Administrative Agent shall have a first priority
perfected Lien thereon. From and after the closing of the IPO Transaction, CAI
shall at all times cause all equity interests in and to CAI to be pledged to the
Administrative Agent for the benefit of Lenders pursuant to a Pledge and
Security Agreement, whereby the Administrative Agent shall have a first priority
perfected Lien thereon.
ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall occur:
(a) any Borrower shall fail to pay any principal of, or interest on, any
Loan when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
(b) any Loan Party shall fail to pay any fee or any other amount (other
than an amount referred to in clause (a) of this Article) payable under any Loan
Document, when and as the same shall become due and payable, and such failure
shall continue unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or on behalf of
any Loan Party or any Subsidiary thereof in or in connection with any Loan
Document or in any report,
61
certificate, financial statement or other document furnished to the
Administrative Agent or any Lender pursuant to or in connection with any Loan
Document, shall prove to have been incorrect in any material respect when made
or deemed made;
(d) (i) any Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Article VI; or (ii) any Loan Party shall
fail to observe or perform any covenant, condition or agreement contained in any
Guaranty Agreement to which it is a party; or (iii) any Loan Party shall fail to
observe or perform any negative covenant, condition or agreement contained in
any other Loan Document to which it is a party and such violation shall not have
been remedied within five (5) days after the occurrence thereof;
(e) any Loan Party shall fail to observe or perform any affirmative
covenant, condition or agreement contained in this Agreement (other than those
specified in clause (a), (b) or (d) of this Article) or in any other Loan
Document to which it is a party, and such failure shall continue unremedied for
a period of 30 days after the occurrence thereof;
(f) (i) a Change of Control shall occur or (ii) from and after the closing
of the IPO Transaction, Parent shall cease to own all of the issued and
outstanding equity interests in and to CAI, free and clear of any Liens, or
(iii) Xxxxxx X. Xxxxx or Xxxxxxx X. Xxxxx, Xx. shall not be the Chief Executive
Officer of CAI and a replacement reasonably satisfactory to the Lenders has not
been named within 120 days thereafter;
(g) any Loan Party or any of their Subsidiaries shall fail to make any
payment (whether of principal or interest and regardless of amount) in respect
of any Material Indebtedness, when and as the same shall become due and payable
and such non-payment continues after the applicable grace period;
(h) any event or condition occurs that results in any Material Indebtedness
of any Loan Party or any of their Subsidiaries becoming due prior to its
scheduled maturity or that enables or permits (with or without the giving of
notice, the lapse of time or both) the holder or holders of any such Material
Indebtedness or any trustee or agent on its or their behalf to cause any such
Material Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity, unless such
event or condition is waived by the non-defaulting party thereto;
(i) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of any Loan Party or any Subsidiary thereof or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for such Loan Party or any Subsidiary thereof or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 30 days or an order or decree approving
or ordering any of the foregoing shall be entered;
(j) any Loan Party or any Subsidiary thereof shall (i) voluntarily commence
any proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in
62
effect, (ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (i) of this
Article, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for any Loan Party or
any Subsidiary thereof or for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors or
(vi) take any action for the purpose of effecting any of the foregoing;
(k) any Loan Party or any Subsidiary thereof shall become unable, admit in
writing or fail generally to pay its debts as they become due;
(1) one or more judgments for the payment of money in an aggregate amount
in excess of $500,000 shall be rendered against any Loan Party or any of their
Subsidiaries or any combination thereof and the same shall remain undischarged
for a period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to attach or levy upon any assets of such Person(s) to enforce any such
judgment;
(m) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred,
could reasonably be expected to result in liability of any Loan Party or any of
their Subsidiaries in an aggregate amount exceeding (i) $500,000 in any year or
(ii) $1,000,000 for all periods;
(n) except pursuant to the express terms of any Loan Document, any Loan
Document shall, at any time after its execution and delivery and for any reason,
cease to be in full force and effect or be declared to be null and void, or any
Lien granted pursuant to any Loan Document shall cease to be perfected and of
first priority due to any action or in action of any Loan Party (except for
Liens permitted by Section 6.02 hereof), or the validity or enforceability
thereof shall be contested by any Loan Party, or any Loan Party shall deny that
it has any or any further liability or obligations under any Loan Document to
which it is a party;
(o) any Loan Party sells, encumbers or abandons (except as otherwise
expressly permitted by the Loan Documents) any material portion of the Property
now or hereafter subject to any of the Security Documents; or any levy, seizure,
or attachment is made thereof or thereon; or any material portion of such
Property is lost, stolen, substantially damaged or destroyed;
(p) (i) except for violations or defaults that have been waived or
consented to, any party thereto shall violate any covenant, agreement or
condition contained in any Receivables Purchase Document or any default or event
of default occurs and is continuing under any Receivables Purchase Document or
(ii) any party thereto shall amend, modify or supplement any provision set forth
in any Receivables Purchase Document in any manner which could reasonably be
expected to have a material adverse affect on Lenders without the prior written
consent of the Required Lenders;
(q) (i) except for any default which is waived by Voyager, any party
thereto shall violate any covenant, agreement or condition in the Voyager
Debenture, the Voyager Keep Well Agreement, or the Voyager Security Agreement,
or any default or event of default shall occur
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thereunder or (ii) any default or event of default occurs under the Voyager
Subordination and Standstill Agreement or (iii) any party thereto shall amend,
modify or supplement any provision set forth in any Voyager Document without the
prior written consent of the Required Lenders (provided no such consent shall be
required for the renewal and extension thereof provided no Default or Default or
Event of Default shall exist or result therefrom); or
(r) (i) any party thereto shall violate any covenant, agreement or
condition in the Seller Subordinated Note (except for a default waived by X.X.
Xxxx, Xx.) or the Seller Subordination Agreement or shall amend, modify or
supplement any provision of the Seller Subordinated Note or the Seller
Subordination Agreement without the prior written consent of the Required
Lenders, or (ii) any default or event of default shall occur under the Seller
Subordinated Note (except for a default waived by X.X. Xxxx, Xx.) or under the
Seller Subordination Agreement;
then, and in every such event (other than an event described in clause (i), (j)
or (k) of this Article), and at any time thereafter during the continuance of
such event, the Administrative Agent may, and at the request of the Required
Lenders shall, by notice to the Borrowers, take either or both of the following
actions, at the same or different times: (i) terminate the Commitments, and
thereupon the Commitments shall terminate immediately, and (ii) declare the
Loans then outstanding to be due and payable in whole (or in part, in which case
any principal not so declared to be due and payable may thereafter be declared
to be due and payable), and thereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and all fees and
other obligations of each Borrower accrued hereunder, shall become due and
payable immediately, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by each Borrower; and in case of any event
described in clause (i), (j) or (k) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrowers accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by each Borrower.
ARTICLE VIII
The Administrative Agent
Each of the Lenders hereby irrevocably appoints the Administrative Agent as
its agent and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof, together with such actions and powers as are reasonably
incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrowers or any Subsidiary or other affiliate
thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except
those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent
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shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing, (b) the Administrative Agent
shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby that the Administrative Agent is required to exercise in
writing by the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
9.02), and (c) except as expressly set forth herein, the Administrative Agent
shall not have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Loan Parties or any of their
Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrowers or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrowers), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders and the Borrowers. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Borrowers, to
appoint a successor. If no successor shall have been
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so appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent which shall be a bank with an
office in Houston, Texas, or an affiliate of any such bank. Upon the acceptance
of its appointment as Administrative Agent hereunder by a successor, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrowers to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrowers and such successor. After the Administrative Agent's
resignation hereunder, the provisions of this Article and Section 9.03 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Administrative
Agent.
SECTION 8.01. INDEMNIFICATION. NOTWITHSTANDING ANYTHING TO THE CONTRARY
HEREIN CONTAINED, THE ADMINISTRATIVE AGENT SHALL BE FULLY JUSTIFIED IN FAILING
OR REFUSING TO TAKE ANY ACTION HEREUNDER UNLESS IT SHALL FIRST BE INDEMNIFIED TO
ITS SATISFACTION BY THE LENDERS AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, AND
DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED
BY OR ASSERTED AGAINST THE ADMINISTRATIVE AGENT IN ANY WAY RELATING TO OR
ARISING OUT OF ITS TAKING OR CONTINUING TO TAKE ANY ACTION OR ITS REFRAINING TO
TAKE ANY ACTION. EACH LENDER AGREES TO INDEMNIFY THE ADMINISTRATIVE AGENT (TO
THE EXTENT NOT REIMBURSED BY THE BORROWERS OR ANY SUBSIDIARY), ACCORDING TO SUCH
LENDER'S COMMITMENTS, FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, AND
DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED
BY, OR ASSERTED AGAINST THE ADMINISTRATIVE AGENT IN ANY WAY RELATING TO OR
ARISING OUT OF ANY LOAN DOCUMENT OR ANY ACTION TAKEN OR OMITTED BY THE
ADMINISTRATIVE AGENT UNDER ANY LOAN DOCUMENT; PROVIDED THAT NO LENDER SHALL BE
LIABLE FOR ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR DISBURSEMENTS
RESULTING FROM THE GROSS NEGLIGENCE OR WILFUL MISCONDUCT OF THE PERSON BEING
INDEMNIFIED; AND PROVIDED FURTHER THAT IT IS THE INTENTION OF EACH LENDER TO
INDEMNIFY THE ADMINISTRATIVE AGENT AGAINST THE CONSEQUENCES OF THE
ADMINISTRATIVE AGENT'S OWN NEGLIGENCE, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT,
CONCURRENT, ACTIVE OR PASSIVE. WITHOUT LIMITATION OF THE FOREGOING, EACH LENDER
AGREES TO REIMBURSE THE ADMINISTRATIVE AGENT PROMPTLY UPON DEMAND FOR ITS PRO
RATA PERCENTAGE OF ANY OUT-OF-POCKET EXPENSES (INCLUDING ATTORNEYS' FEES)
INCURRED BY THE
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ADMINISTRATIVE AGENT IN CONNECTION WITH THE PREPARATION, ADMINISTRATION, OR
ENFORCEMENT OF, OR LEGAL ADVICE IN RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER,
ANY LOAN DOCUMENT, TO THE EXTENT THAT THE ADMINISTRATIVE AGENT IS NOT REIMBURSED
FOR SUCH EXPENSES BY THE BORROWERS.
Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any related agreement or any
document furnished hereunder or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrowers, to Conn Appliances, Inc., Attention of Xxxxxx X.
Xxxxx (Telecopy No. (000) 000-0000);
(b) if to the Administrative Agent, to JPMorgan Chase Bank, Attention of
Xxxxxxx Xxxxx (Telecopy No. (000) 000-0000);
(c) if to any other Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments.
(a) No failure or delay by the Administrative Agent or any Lender in
exercising any right or power hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, and the
Lenders hereunder are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by the Borrowers therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of
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this Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan shall not be construed as a
waiver of any Default, regardless of whether the Administrative Agent or any
Lender may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrowers and the Required Lenders or by the Borrowers and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan, or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected thereby, (iv)
change Section 2.16 in a manner that would alter the pro rata sharing of
payments required thereby, without the written consent of each Lender, (v)
except in connection with a sale, transfer or other disposition permitted
hereby, release any Collateral, (vi) release of Guarantor from its obligations,
or (vii) change any of the provisions of this Section or the definition of
"Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender; provided further that no such agreement shall amend,
modify or otherwise affect the rights or duties of the Administrative Agent,
without the prior written consent of the Administrative Agent.
SECTION 9.03. Expenses; Indemnity; Damage Waiver.
(a) The Borrowers shall pay (i) all out-of-pocket expenses incurred by the
Administrative Agent and its affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent, in connection with
the syndication of the credit facilities provided for herein, the preparation
and administration of this Agreement or any other Loan Document or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all out-of-pocket expenses incurred by the Administrative
Agent or any Lender, including the fees, charges and disbursements of any
counsel for the Administrative Agent or any Lender, in connection with the
enforcement or protection of its rights in connection with this Agreement or any
other Loan Document, including its rights under this Section, or in connection
with the Loans made, including all such out-of-pocket expenses incurred during
any workout, restructuring or negotiations in respect of such Loans.
(b) The Borrowers shall indemnify the Administrative Agent, and each
Lender, and each related party of any of the foregoing persons (each such person
being called an "Indemnitee") against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses, including
the fees, charges and disbursements of
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any counsel for any Indemnitee, incurred by or asserted against any indemnitee
arising out of, in connection with, or as a result of:
(i) the execution or delivery of this agreement or any agreement or
instrument contemplated hereby, the performance by the parties hereto of
their respective obligations hereunder or the consummation of the
transactions or any other transactions contemplated hereby,
(ii) any Loan or the use of the proceeds therefrom,
(iii) any actual or alleged presence or release of Hazardous Materials
on or from any property owned or operated by the Borrowers or any of their
Subsidiaries, or any Environmental Liability related in any way to the
Borrowers or any of their Subsidiaries,
(iv) any transaction, act, omission, event or circumstance in any way
connected with the Mortgaged Property or with the Security Documents,
including but not limited to any bodily injury or death or property damage
occurring in or upon or in the vicinity of the Mortgaged Property through
any cause whatsoever any act performed or omitted to be performed
hereunder, any breach by any Loan Party of any representation, warranty,
covenant, agreement or condition contained in the Security Documents, any
default as defined herein, and any claim under or with respect to any Lease
(as defined in the Mortgages).
(v) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract,
tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and non appealable judgment to have resulted from the
gross negligence or wilful misconduct of such Indemnitee.
(c) To the extent that any Borrower fails to pay any amount required to be
paid by it to the Administrative Agent, under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent such
Lender's per rata percentage of such unpaid amount in accordance with Section
8.01.
(d) To the extent permitted by applicable law, the Borrowers shall not
assert, and hereby waive, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable not later than 15
days after written demand therefor.
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SECTION 9.04. 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 no Borrower may 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 any 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 Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it); provided that (i) except in
the case of an assignment to a Lender or an affiliate of a Lender, each of the
Borrowers and the Administrative Agent must give their prior written consent to
such assignment (which consent shall not be unreasonably withheld), (ii) except
in the case of an assignment to a Lender or an affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender's Commitment,
the amount of the Commitment of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Administrative Agent) shall not be less
than $5,000,000 unless the Borrowers and the Administrative Agent otherwise
consent, (iii) 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, (iv) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Acceptance, together with (except in
the case of an assignment to a Lender or an affiliate of a Lender) a processing
and recordation fee of $3,500, and (v) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; and provided further that any consent of the Borrowers otherwise
required under this paragraph shall not be required if an Event of Default has
occurred and is continuing. Subject to acceptance and recording thereof pursuant
to paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance the 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 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this paragraph 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
paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of the
Borrowers, shall maintain at one of its offices in Houston, Texas 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 Commitment of, and principal
amount of the Loans owing to, each Lender pursuant to the
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terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and the Borrowers, 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 Borrowers, and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an assignee, the assignee's completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Acceptance
and record the information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrowers 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 obligations
under this Agreement (including all or a portion of its Commitment and the 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
Borrowers, 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, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
Subject to paragraph (f) of this Section, the Borrowers agree that each
Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 9.08 as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.18(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.15 or 2.17 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 Borrowers'
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 2.17 unless the
Borrowers are notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrowers, to comply with Section
2.17(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not
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apply to any such pledge or assignment of a security interest; provided that no
such pledge or assignment of a security interest shall release a Lender from any
of its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Borrowers herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement is outstanding and unpaid
and so long as the Commitments have not expired or terminated. The provisions of
Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, and the Commitments or the
termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Administrative
Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. This Agreement shall
become effective when it shall have been executed by the Administrative Agent
and when the Administrative Agent shall have received counterparts hereof which,
when taken together, bear the signatures of each of the other parties hereto,
and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Set-off. If an Event of Default shall have occurred
and be continuing, each Lender and each of its affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or affiliate to or for the credit or the account of any Borrower
against any of and all the obligations of the Borrowers now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of each
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Lender under this Section are in addition to other rights and remedies
(including other rights of set-off) which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAW OF THE STATE OF TEXAS.
(b) EACH BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR
ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE DISTRICT COURT
OF THE STATE OF TEXAS SITTING IN XXXXXX COUNTY AND OF THE UNITED STATES DISTRICT
COURT OF THE SOUTHERN DISTRICT OF TEXAS, AND ANY APPELLATE COURT FROM ANY
THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN TEXAS
OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES
HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY
RIGHT THAT THE ADMINISTRATIVE AGENT, OR ANY LENDER MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST ANY BORROWER OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c) EACH BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT REFERRED TO IN
PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(d) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 9.01. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
73
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Payments Set Aside. To the extent that any Borrower makes a
payment or payments to the Administrative Agent or any Lender or the
Administrative Agent or any Lender enforces any security interest or exercises
its right of set-off, and such payment or payments or the proceeds of such
enforcement or set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other Person under any debtor law or
equitable cause, then, to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied, and all rights and remedies
therefor, shall be revived and shall continue in full force and effect as if
such payment had not been made or such enforcement or set-off had not occurred.
SECTION 9.13. Loan Agreement Controls. If there are any conflicts or
inconsistencies among this Agreement and any of the other Loan Documents, the
provisions of this Agreement shall prevail and control.
SECTION 9.14. FINAL AGREEMENT. THIS WRITTEN AGREEMENT REPRESENTS 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.
SECTION 9.15. Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively, the "Charges"), shall exceed the
maximum lawful rate (the "Highest Lawful Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Highest Lawful Rate and, to the extent lawful, the interest and
Charges that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section shall be cumulated and the
interest and Charges payable to such Lender in respect of other Loans or periods
shall be increased (but not above the Highest Lawful Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by such Lender.
74
SECTION 9.16. Limitation of Liens. Notwithstanding anything in any Loan
Document to the contrary, The Administrative Agent and the Lenders hereby agree
that under no circumstances shall the Collateral include (i) "Purchased
Receivables" (as defined in the Receivables Purchase Agreement) or (ii) "Related
Security" or "Receivable Files" (each as defined in the Conn Funding II
Indenture), or products or proceeds of any of the foregoing.
SECTION 9.17. Amendment and Restatement. This Agreement amends and restates
in its entirety that certain Credit Agreement dated as of July 14, 1998 by and
among CAI and certain related entities, as Borrowers, JPMorgan Chase Bank, as
Administrative Agent, and the other lenders named therein.
75
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
CONN APPLIANCES, INC.
By: /s/ XXXXXX X. XXXXX
------------------------------------
Name: XXXXXX X. XXXXX
Title: CHIEF EXECUTIVE OFFICER &
CHAIRMAN OF THE BOARD
CAI CREDIT INSURANCE AGENCY, INC.
By: /s/ XXXXX X. XXXXX
------------------------------------
Name: XXXXX X. XXXXX
Title: PRESIDENT
76
JPMORGAN CHASE BANK, individually and as
Administrative Agent
By: /s/ H. Xxxxx Xxxxx
------------------------------------
Name: H. Xxxxx Xxxxx
Title: Vice President
77
BANK OF AMERICA, N.A., individually and
as Syndication Agent
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
78
SUNTRUST BANK, individually and as
Documentation Agent
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
79
HIBERNIA NATIONAL BANK
By: /s/ XXXX X. XXXXXXX
------------------------------------
Name: XXXX X. XXXXXXX
Title: VICE PRESIDENT
80
GUARANTY BANK
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Name: Xxxx Xxxxxxxx
Title: VP
81
SCHEDULE 2.01
TERM COMMITMENTS
JPMorgan Chase Bank $ 3,000,000
Bank of America, N.A. $ 3,000,000
Guaranty Bank $ 3,000,000
Hibernia National Bank $ 3,000,000
SunTrust Bank $ 3,000,000
TOTAL $15,000,000
SCHEDULE 2.02
REVOLVING COMMITMENTS
JPMorgan Chase Bank $ 8,000,000
Bank of America, N.A. $ 8,000,000
Hibernia National Bank $ 8,000,000
SunTrust Bank $ 8,000,000
Guaranty Bank $ 8,000,000
TOTAL $40,000,000
CONN APPLIANCES, INC. and Subsidiaries
CONN'S OPPORTUNITY FINANCE COMPANY
Listing of Real Estate Holdings Schedule 3.05(a)(1)
Post Recapitalization Plan
Date
Location Owner Description Address City State County/Parish Acquired
--------------------------------------------------------------------------------------------------------------------------------
1 CAI Corporate Headquarters 0000 Xxxxxxx Xxxxxxxx Xxxxx Jefferson 11/1/1984
3 XXX Xxxxxxxx Warehouse 0000 Xxxxxx Xxxxxxxx Xxxxx Jefferson 4/1/1972
10 CAI Store 10 1715 Alexander Baytown Texas Xxxxxx 1/1/1979
17 CAI Store 17 00000 Xxxxxxxxx Xxxxxxx Xxxxxxx Xxxxx Xxxxxx 9/1/1984
22 CAI Lafayette Warehouse-Prk 118 Xxxxxxxx Lafayette Louisiana Lafayette 8/25/1995
22 CAI Land Xxxxxxx St. Laf 124 Xxxxxxxx Lafayette Louisiana Lafayette 6/2/1982
27 CAI Store 27 0000 X. Xxxxxxxx Xxxxxxx Xxxxx Jefferson 5/1/1992
61 CAI Store 61 0000 XX Xxxxxxxx Xx. Xxx Xxxxxxx Xxxxx Bexar 9/1/1993
62 CAI Store 62 4918 Loop 000 X Xxx Xxxxxxx Xxxxx Bexar 4/19/1983
801 CAI Land Xxx 0 0000 Xxxxxx Xxxxxxxx Xxxxx Jefferson 1/1/1977
801 CAI Land Beaumont 0000 Xxxxxx Xxxxxxxx Xxxxx Jefferson 1/1/1977
801 CAI Land 0000 Xxxxxx Xxxxxxxx Xxxxx Jefferson 7/1/1986
801 CAI Land-Missouri Pacific XX 0000 Xxxxxx Xxxxxxxx Xxxxx Jefferson 9/7/1988
999 CAI New Iberia Excess Land Admiral Xxxxx Dr. New Iberia Louisiana Iberia Parish 9/25/1979
999 CAI SFR Xxxx Xxxxx 000 Xxxxxxx Xxxxxxx Texas Xxxxxx 1/31/1983
999 CAI Vacant Lot 915 Fortune Baytown Texas Xxxxxx 4/22/1983
CAI Baton Rouge Excess TR X-0-X Xxx 00 Xxxxxx 0X Xxxxx Xxxxx Louisiana East Baton Rouge 9/12/1983
3A XXX Xxxxxxxx Xxxxxxxxx Xxxxxxxx Xxxx Xxxxxxxx Xxxxx Jefferson
TOTALS
Acquisition Acquisition Net Book
Location Owner Description Cost-Land Cost-Imprv Value-Imprv NBV
-------------------------------------------------------------------------------------------------
1 CAI Corporate Headquarters 91,552 91,552
3 XXX Xxxxxxxx Warehouse 197,282 737,597 414,273 611,554
10 CAI Store 10 92,370 164,633 37,163 129,533
17 CAI Store 17 1,149,355 615,431 353,084 1,502,438
22 CAI Lafayette Warehouse-Prk 84,588 84,588
22 CAI Land Xxxxxxx St. Laf 137,952 137,952
27 CAI Store 27 273,000 649,062 526,290 799,290
61 CAI Store 61 259,612 910,041 707,830 967,442
62 CAI Store 62 539,865 756,027 646,581 1,186,447
801 CAI Land Lot 1 66,587 66,587
801 CAI Land Beaumont 19,106 39,895 16,401 35,507
801 CAI Land 28,532 28,532
801 CAI Land-Missouri Pacific RR 21,275 21,275
999 CAI New Iberia Excess Land 75,000 75,000
999 CAI SFR Rent House 58,353 58,353
999 CAI Vacant Lot 36,050 36,050
CAI Baton Rouge Excess 304,023 304,023
3A XXX Xxxxxxxx Warehouse
TOTALS 3,342,949 3,872,687 2,701,622 6,136,122
0
0
Legend CAILP CAI, LP
APS Appliance Parts & Service, Inc
CDC Conn Development Corporation
-----------------------------------------------------------------------------------------------------------------------------
TOTAL DATE DATE
LANDLORD AND LEASE FIRST LAST PRIMARY
LOCATION LOCATION BILLING ADDRESS PMTS PMT DUE PMT DUE LEASE TERMS
-----------------------------------------------------------------------------------------------------------------------------
AIRPLANE S.E. TEXAS REGIONAL JEFFERSON COUNTY 214.00 MONTH TO MONTH
HANGER 0000 XXXXXX XXXXX
XXXXXXXX, XXXXX 00000
CORP. 3295 COLLEGE, SUITE A BEAUMONT DEVELOPMENT 32,411.33 9/9/2000 9/1/2010 9/9/00 - 9/30/2010
BEAUMONT, TEXAS C/O UNITED EQUITES, INC.
0000 XXXXXXXX, XXXXX 000
XXXXXXX, XXXXX
ADDTL SPACE 3141 COLLEGE, SUITE A
BMT WHSE 0000 XXXXXX XX. CONN BROTHERS 450.00 MONTH TO MONTH
PKG LOT BEAUMONT, TEXAS X.X. XXX 0000
XXXXXXXX, XXXXX 00000
1 8550 - A MARKET ST. XXXXXXXXXX REALTY 71,145.00 9/1/2000 - 8/31/2005
Houston Whse 0000 - X XXXXXX XX. XXX: XXXX
XXXXXXX, XXXXX 00000 X.X. XXX 000000
XXXXXXX, XXXXX 00000
-------------------------------------------------------------------------------------------------------------------------------
PRIMARY AMENDMENT TOTAL NUMBER
LEASE PAYMENT OR OPTION LEASE PAYMENT OF RENEWAL
LOCATION LOCATION COMPUTATION COMPUTATION COMPUTATION OPTIONS
-------------------------------------------------------------------------------------------------------------------------------
AIRPLANE S.E. TEXAS REGIONAL Base 214.00 Base 0.00 Base 214.00
HANGER Cam 0.00 Cam 0.00 Cam 0.00
Insurance 0.00 Insurance 0.00 Insurance 0.00
Taxes 0.00 Taxes 0.00 Taxes 0.00
214.00 0.00 214.00
CORP. 3295 COLLEGE, SUITE A Base 20,232.00 Base 4,239.58 Base 24,471.58 1 - 5 year option
BEAUMONT, TEXAS Cam 4,360.31 Cam 0.00 Cam 4,360.31 2 - 5 year option
Insurance 533.92 Insurance 0.00 Insurance 533.92
Taxes 3,025.52 Taxes 0.00 Taxes 3,025.52
Signs 0.00 0.10 20.00
28,151.75 4,239.58 32,411.33
ADDTL SPACE 3141 COLLEGE,
SUITE A
BMT WHSE 0000 XXXXXX XX. Base 450.00 Base 0.00 Base 450.00 NONE
PKG LOT BEAUMONT, TEXAS Cam 0.00 Cam 0.00 Cam 0.00
Insurance 0.00 Insurance 0.00 Insurance 0.00
Taxes 0.00 Taxes 0.00 Taxes 0.00
450.00 0.00 450.00
1 8550 - A MARKET ST. Base 71,145.00 Base 0.00 Base 71,145.00 1 - 5 year option
Houston Whse 8550 - B MARKET ST. Cam 0.00 Cam 0.00 Cam 0.00
** ONE TIME
OFFER TO
XXXXXXX, XXXXX 00000 Insurance 0.00 Insurance 0.00 Insurance 0.00 TERMINATE
NOTICE SENT ON
OR BEFORE
Taxes 0.00 Taxes 0.00 Taxes 0.00 FEBRUARY 28,
WITH
TERMINATION
71,145.00 0.00 71,145.00 TO BE
SCHEDULE 3.05(a)(ii)
Page 1
-----------------------------------------------------------------------------------------------------------------------------
TOTAL DATE DATE
LANDLORD AND LEASE FIRST LAST PRIMARY
LOCATION LOCATION BILLING ADDRESS PMTS PMT DUE PMT DUE LEASE TERMS
-----------------------------------------------------------------------------------------------------------------------------
2 000 XXXXXXX XXXXXXXX XXXXXXX 19,391.66 8/13/2001 8/1/2011 8/13/01 - 8/12/2011
BEAUMONT, TEXAS 0000 XXXXXXXXXX, XXXXX
XXXXXXX, XXXXX 00000
3,000.00 11/19/2002 10/1/2007 11/1/02 - 10/31/07
03A WAREHOUSE & THE XXXXX COMPANY
BLDG) 0000 XXXXXXXX XXXXX
0000 XXXXXX XXXXXX XXXXXXXX, XXXXX 00000
77702
5 3600 HWY 365 XXXXXXX XXXXX XXXX, XX 16,500.00 8/1/1998 7/1/2008 8/1/98 - 7/31/2008
NEDERLAND, TEXAS X.X. XXX 0000
XXXXXXXX, XXXXX 00000
6 0000 XXXXX XXX. 14 XXXXXXXXXX REALTY 15,260.58 1/29/2001 1/1/2011 1/29/01 - 1/31/2011
LAKE CHARLES, LA X.X. XXX 000000
XXXXXXX, XXXXX 00000
PHONE
FAX
------------------------------------------------------------------------------------------------------------------------------
PRIMARY AMENDMENT TOTAL NUMBER
LEASE PAYMENT OR OPTION LEASE PAYMENT OF RENEWAL
LOCATION LOCATION COMPUTATION COMPUTATION COMPUTATION OPTIONS
------------------------------------------------------------------------------------------------------------------------------
2 108 GATEWAY Base 13,052.08 Base 0.00 Base 13,052.08 1 - 5 year option
BEAUMONT, TEXAS Cam 0.00 Cam 0.00 Cam 0.00 Base
Insurance 0.00 Insurance 0.00 Insurance 0.00 2 - 5 year option
Taxes 0.00 Taxes 0.00 Taxes 0.00 Base
CTI 6,339.58 CTI 0.00 CTI 6,339.58 3 - 5 year option
19,391.66 0.00 19,391.66 Base
4 - 5 year option
Base
Base 2,500.00 Base 0.00 Base 2,500.00 1 - 5 year option
03A WAREHOUSE & Cam Cam 0.00 Cam 0.00 Base
BLDG) Insurance Insurance 0.00 Insurance 0.00 Insurance & Taxes
0000 XXXXXX XXXXXX Taxes Taxes 0.00 Taxes 0.00
77702 Ins/faxes 500.00 CTI 0.00 CTI 500.00
3,000.00 0.00 3,000.00
5 0000 XXX 000 Base 10,500.00 Base 0.00 Base 10,500.00 1 - 5 year option
NEDERLAND, TEXAS Cam 0.00 Cam 0.00 Cam 0.00 Base
Insurance 0.00 Insurance 0.00 Insurance 0.00 2 - 5 year option
Taxes 0.00 Taxes 0.00 Taxes 0.00 Base
16,500.00 0.00 16,500.0 3 - 5 year option
Base
6 0000 XXXXX XXX. 14 Base 11,739.00 Base 0.00 Base 11,739.00 1 - 5 year option
LAKE CHARLES, LA Cam 1,252.16 Cam 0.00 Cam 1,252.16 Base
Insurance 939.00 Insurance 0.00 Insurance 939.00 2 - 5 year option
Taxes 1,330.42 Taxes 0.00 Taxes 1,330.42 Base
15,260.58 0.00 15.260.58
SCHEDULE 3.05(a)(ii)
Page 2
----------------------------------------------------------------------------------------------------------------------------
TOTAL DATE DATE
LANDLORD AND LEASE FIRST LAST PRIMARY
LOCATION LOCATION BILLING ADDRESS PMTS PMT DUE PMT DUE LEASE TERMS
----------------------------------------------------------------------------------------------------------------------------
7 000 X. XXXXXXX XXXXXXXX SHOPPING 10,406.25 7/24/2001 6/1/2011 7/24/01 - 6/30/11
NEW XXXXXX, XX 00000 X/X XXXXXXXXXX XXXXXXXX,
XXX: XXXXXX X. XXXXXX
000 X. XXXXX XXXXX XX.
XXX XXXXXX,
XX 00000-0000
8 000 XXXX XXXXXX XX. XXX XXXX EXCEL REALTY 6,714.75 8/1/1997 5/1/2008 8/1/97 - 5/30/2008
LAFAYETTE, LA. X.X. XXX 000000
XXXXXX, XXXXX 00000-0000
9 8888 AIRLINE XXXXXXX XXXXX CONN, LP 15,041.67 3/1/1999 2/1/2008 3/1/99 - 2/28/2008
BATON ROUGE, LA X.X. XXX 0000
XXXXXXXX, XXXXX 00000
11 3559 AMBASSADOR EQUITY ONE, INC. 23,685.88 9/1/2001 7/1/2011 6/25/01 - 7/31/11
XXXXXXXXX, XX 00000 X.X. XXX 000000
XXXXXXX, XX 00000-0000
---------------------------------------------------------------------------------------------------------------------------------
PRIMARY AMENDMENT TOTAL NUMBER
LEASE PAYMENT OR OPTION LEASE PAYMENT OF RENEWAL
LOCATION LOCATION COMPUTATION COMPUTATION COMPUTATION OPTIONS
---------------------------------------------------------------------------------------------------------------------------------
7 917 E. ADMIRAL Base 8,040.67 Base 0.00 Base 8,040.67 1 - 5 year option
NEW XXXXXX, XX 00000 Cam 2,365.58 Cam 0.00 Cam 2,365.58 Base
Insurance 0.00 Insurance 0.00 Insurance 0.00 2 - 5 year option
Taxes 0.00 Taxes 0.00 Taxes 0.00 Base
10,406.25 0.00 10,406.25 3 - 5 year option
Base
4 - 5 year option
Base
8 000 XXXX XXXXXX XX. Base 5,250.00 Base 0.00 Base 5,250.00 1 - 5 year option
LAFAYETTE, LA. Cam 1,464.75 Cam 0.00 Cam 1,464.75 2 - 5 year option
Insurance 0.00 Insurance 0.00 Insurance 0.00
Taxes 0.00 Taxes 0.00 Taxes 0.00
6,714.75 0.00 6,714.75
9 8888 AIRLINE Base 15,041.67 Base 0.00 Base 15,041.67 1 - 5 year option
BATON ROUGE, LA Cam 0.00 Cam 0.00 Cam 0.00 Base
Insurance 0.00 Insurance 0.00 Insurance 0.00 2 - 5 year option
Taxes 0.00 Taxes 0.00 Taxes 0.00 Base
15,041.67 0.00 15,041.67 3 - 5 year option
Base
11 3559 AMBASSADOR Base 19,111.88 Base 0.00 Base 19,111.88 1 - 5 year option
XXXXXXXXX, XX 00000 Cam 3,526.00 Cam 0.00 Cam 3,526.00 Base
Insurance 0.00 Insurance 0.00 Insurance 0.00 2 - 5 year option
Taxes 1,048.00 Taxes 0.00 Taxes 1,048.00 Base
23,685.88 0.00 23,685.88 3 - 5 year option
Base
4 - 5 year option
Base
SCHEDULE 3.05(a)(ii)
Page 3
----------------------------------------------------------------------------------------------------------------------------
TOTAL DATE DATE
LANDLORD AND LEASE FIRST LAST PRIMARY
LOCATION LOCATION BILLING ADDRESS PMTS PMT DUE PMT DUE LEASE TERMS
----------------------------------------------------------------------------------------------------------------------------
12 0000 XXXXXX XXXX XXXXXXXX DEVELOPMENT 20,039.59 4/1/1998 3/1/2008 4/1/98 - 3/31/2008
BEAUMONT, TEXAS X.X. XXX 0000
XXXXXXXX, XXXXX 00000
14 000 XXXXXXXXXX XX. XXXXXX XXXXXX X LAND 7,607.50 1/1/02 - 12/31/2008
XXXXXX, XXXXX 00000 X.X. XXX 0000
XXXXXXXX, XXXXX 00000
15 2425 TURNING BASIN XXXXXXX XXXXX CONN, 19,500.00 8/1/1998 7/1/2008 8/1/98 - 7/31/2008
HOUSTON, TEXAS X.X. XXX 0000
XXXXXXXX, XXXXX 00000
16 0000 X. XXXXXXX C. W. & XXXXXXX XXXX 22,500.00 10/1/2002 0/0/0000
XXXXXXX, XXXXX FAMILY PARTNERSHIP, LTD
X.X. XXX 0000
xxx XXXXXXXX, XXXXX 00000
Blue Xxxx 000 XXXX XXXX
XXXXXXX, XXXXX
---------------------------------------------------------------------------------------------------------------------------------
PRIMARY AMENDMENT TOTAL NUMBER
LEASE PAYMENT OR OPTION LEASE PAYMENT OF RENEWAL
LOCATION LOCATION COMPUTATION COMPUTATION COMPUTATION OPTIONS
---------------------------------------------------------------------------------------------------------------------------------
12 0000 XXXXXX XXXX Base 15,882.70 Base 0.00 Base 15,882.73 1 - 5 year option
BEAUMONT, TEXAS Cam 1,758.70 Cam 0.00 Cam 1,758.79 2 - 5 year option
Insurance 502.50 Insurance 0.00 Insurance 502.50 3 - 5 year option
Taxes 1,895.57 Taxes 0.00 Taxes 1,895.57 4 - 5 year option
20,039.59 0.00 20,039.59
14 000 XXXXXXXXXX XX. Base 5,312.50 Base 0.00 Base 5,312.50 1 - 5 year option
XXXXXX, XXXXX 00000 Cam 0.00 Cam 0.00 Cam 0.00 8-10 years
Insurance 0.00 Insurance 0.00 Insurance 0.00 11-12 years
Taxes 0.00 Taxes 0.00 Taxes 0.00 2 - 5 year option
CTI 2,295.00 CTI 0.00 CTI 2,295.00 13-14 years
7,607.50 0.00 7,607.50 16-17 years
3 - 5 year option
18-20 years
21-22 years
15 2425 TURNING BASIN Base 19,500.00 Base 0.00 Base 19,500.00 1 - 5 year option
HOUSTON, TEXAS Cam 0.00 Cam 0.00 Cam 0.00 2 - 5 year option
Insurance 0.00 Insurance 0.00 Insurance 0.00 3 - 5 year option
Taxes 0.00 Taxes 0.00 Taxes 0.00
19,500.00 0.00 19,500.00
16 0000 X. XXXXXXX Base 0.00 Base 22,500.00 Base 22,500.00 2 - 5 year option
HOUSTON, TEXAS Cam 0.00 Cam 0.00 Cam 0.00 Base
Insurance 0.00 Insurance 0.00 Insurance 0.00 3 - 5 year option
and Taxes 0.00 Taxes 0.00 Taxes 0.00 Base
0.00 22,500.00 22,500.00
Blue Xxxx 000 XXXX XXXX
XXXXXXX, XXXXX
SCHEDULE 3.05(a)(ii)
Page 4
----------------------------------------------------------------------------------------------------------------------------
TOTAL DATE DATE
LANDLORD AND LEASE FIRST LAST PRIMARY
LOCATION LOCATION BILLING ADDRESS PMTS PMT DUE PMT DUE LEASE TERMS
----------------------------------------------------------------------------------------------------------------------------
805 2425 TURNING BASIN XXXXXXX XXXXX CONN, LP 19,500.00 81/98 - 7/21/2008
Houston Serv HOUSTON, TEXAS X.X. XXX 0000
Xxxxxxx X/X XXXXXXXX, XXXXX 00000
18 10900 GULF FREEWAY XXXXXXX XXXXX XXXX, 15,500.00 7/21/1998 6/1/2008 7/21/98 - 6/30/2008
HOUSTON, TEXAS X.X. XXX 0000
XXXXXXXX, XXXXX 00000
21 20051 KATY FREEWAY JRS PROPERTY 30,750.00 4/1/2002 4/1/2017 4/1/02 - 4/30/17
XXXX, XXXXX 00000 0000 XXXX XXX XXXX.,
XXXXX XXXXXXX,
XXXXX 00000
23 0000 XXXX XXXX XXXXX PLAZA, LTD. 10,650.00 10/22/2001 11/1/2021 10/22/01 - 11/30/21
HOUSTON, TEXAS ONE HOUSTON CENTER
0000 XXXXXXXX
XXXXXXX, XXXXX 00000
------------------------------------------------------------------------------------------------------------------------------
PRIMARY AMENDMENT TOTAL NUMBER
LEASE PAYMENT OR OPTION LEASE PAYMENT OF RENEWAL
LOCATION LOCATION COMPUTATION COMPUTATION COMPUTATION OPTIONS
------------------------------------------------------------------------------------------------------------------------------
805 2425 TURNING BASIN Base 19,500.00 Base 0.00 Base 19,500.00 1 - 5 year option
Houston Serv HOUSTON, TEXAS Cam 0.00 Cam 0.00 Cam 0.00 Base
Houston H/R Insurance 0.00 Insurance 0.00 Insurance 0.00 2 - 5 year option
Taxes 0.00 Taxes 0.00 Taxes 0.00 Base
19,500.00 0.00 19,500.00 3 - 5 year option
Base
18 10900 GULF FREEWAY Base 15,500.00 Base 0.00 Base 15,500.00 1 - 5 year option
HOUSTON, TEXAS Cam 0.00 Cam 0.00 Cam 0.00 Base
Insurance 0.00 Insurance 0.00 Insurance 0.00 2 - 5 year option
Taxes 0.00 Taxes 0.00 Taxes 0.00 Base
15,500.00 0.00 15,500.00 3 - 5 year option
Base
21 20051 KATY FREEWAY Base 23,750.00 Base 0.00 Base 23,750.00 1 - 5 year option
XXXX, XXXXX 00000 Cam 0.00 Cam 0.00 Cam 0.00 Base
Insurance 0.00 Insurance 0.00 Insurance 0.00 CAM
CTI 7,000.00 CTI 0.00 CTI 7,000.00 2 - 5 year option
30,750.00 0.00 30,750.00 Base
CAM
23 0000 XXXX XXXX Base 10,650.00 Base 0.00 Base 10,650.00 1 - 5 year option
HOUSTON, TEXAS Cam 0.00 Cam 0.00 Cam 0.00 Base
Insurance 0.00 Insurance 0.00 Insurance 0.00 2 - 5 year option
Taxes 0.00 Taxes 0.00 Taxes 0.00 Base
10,650.00 0.00 10,650.00 3 - 5 year option
Base
4 - 5 year option
Base
SCHEDULE 3.05(a)(ii)
Page 5
------------------------------------------------------------------------------------------------------------------------------
TOTAL DATE DATE
LANDLORD AND LEASE FIRST LAST PRIMARY
LOCATION LOCATION BILLING ADDRESS PMTS PMT DUE PMT DUE LEASE TERMS
------------------------------------------------------------------------------------------------------------------------------
24 1933-A 1960 XXXXXXXXXX REALTY 22,172.39 8/7/97 - 8/31/2002
XXXXXX, XXXXX 00000 X.X. XXX 000000
XXXXXXX, XXXXX 00000
25 7911 X.XX 1960 XXXXXX X. XXXXX 23,436.35 2/1/96 - 1/31/2011
HOUSTON, TEXAS X.X. XXX 0000
XXXXXXXX, XXXXX 00000
26 1333/37 IH-10 EAST CA NEW PLAN FLOATING 11,258.00 4/1/91 - 3/31/2006
HOUSTON, TEXAS PARTNERSHIP, L.P.
X.X. XXX 000000
XXXXXXX, XXXXX 00000
28 6835 SEIGEN ROAD XXXXXXXXXX REALTY 27,486.00 11/17/01 - 11/30/2016
BATON ROUGE, LA X.X. XXX 000000
XXXXXXX, XXXXX 00000
---------------------------------------------------------------------------------------------------------------------------------
PRIMARY AMENDMENT TOTAL NUMBER
LEASE PAYMENT OR OPTION LEASE PAYMENT OF RENEWAL
LOCATION LOCATION COMPUTATION COMPUTATION COMPUTATION OPTIONS
---------------------------------------------------------------------------------------------------------------------------------
24 1933-A 1960 Base 10,233.00 Base 10,233.00 Base 14,990.00 2 - 5 year option
XXXXXX, XXXXX 00000 Cam 0.00 Cam 1,969.90 Cam 1,969.90 Base
Insurance 0.00 Insurance 747.20 Insurance 747.20 3 - 5 year option
Taxes 0.00 Taxes 4,415.29 Taxes 4,415.29 Base
CTI 5,902.17 CTI 0.00 CTI 0.00
Water 50.00 50.00 50.00
16,135.17 17,415.39 22,172.39
25 7911 X.XX 1960 Base 17,235.00 Base 0.00 Base 17,235.00 1 - 5 year option
HOUSTON, TEXAS Cam 1,518.92 Cam 0.00 Cam 1,518.92 2 - 5 year option
Insurance 345.74 Insurance 0.00 Insurance 345.74
Taxes 4,336.69 Taxes 0.00 Taxes 4,336.69
23,436.35 0.00 23,436.35
26 0000/00 XX-00 XXXX Xxxx 7,605.00 Base 0.00 Base 7,605.00 1 - 5 year option
HOUSTON, TEXAS Cam 1,001.00 Cam 0.00 Cam 1,001.00 Base
Insurance 555.00 Insurance 0.00 Insurance 555.00
Taxes 2,097.00 Taxes 0.00 Taxes 2,097.00
11,258.00 0.00 11,258.00
28 0000 XXXXXX XXXX Base 21,840.00 Base 0.00 Base 21,840.00 1 - 5 year option
BATON ROUGE, LA Cam 2,600.00 Cam 0.00 Cam 2,600.00 Base
Insurance 520.00 Insurance 0.00 Insurance 520.00 2 - 5 year option
Taxes 2,496.00 Taxes 0.00 Taxes 2,496.00 Base
Sign 30.00 Sign 0.00 Sign 30.00
27,486.00 0.00 27,486.00
SCHEDULE 3.05(a)(ii)
Page 6
-----------------------------------------------------------------------------------------------------------------------------
TOTAL DATE DATE
LANDLORD AND LEASE FIRST LAST PRIMARY
LOCATION LOCATION BILLING ADDRESS PMTS PMT DUE PMT DUE LEASE TERMS
-----------------------------------------------------------------------------------------------------------------------------
29 0000 X. XXXX XXXX 1 XXXXXXX XX ASSOCIATES 16,446.69 9/1/02 - 3/31/2014
WEBSTER, TEXAS ATT: XXXXX XXXXXXXXX
0000 XXXXXXXX, XXXXX 0000
XXX XXXX, XXX XXXX
30 9333/35 XXXXXX XXX K CA NEW PLAN FLOATING 9,613.00 10/1/98 - 9/30/2003
HOUSTON, TEXAS PARTNERSHIP, L.P.
P.O. BOX 297095 Renewal Option
XXXXXXX, XXXXX 00000 10/1/2003 - 9/30/2008
*44 LAKELINE MALL DEVELOPMENT 27,768.00 9/16/2002 9/30/2017 9/16/02 - 9/30/17
Lakeline 00000 XXXXX XXXX XXXXXXXX, XX
XXXXXX, XXXXX X.X. XXX 0000
XXXXXXXX, XXXXX 00000
*45 0000 X. XXXXXXXX XX. DEVELOPMENT 28,600.00 6/16/2002 6/30/1932 7/1/02 - 6/30/32
Xxxxxxxx Xx. XXXXXX, XXXXX 00000- SERVICES, LP
X.X. XXX 0000
XXXXXXXX, XXXXX 00000
-----------------------------------------------------------------------------------------------------------------------------
PRIMARY AMENDMENT TOTAL NUMBER
LEASE PAYMENT OR OPTION LEASE PAYMENT OF RENEWAL
LOCATION LOCATION COMPUTATION COMPUTATION COMPUTATION OPTIONS
-----------------------------------------------------------------------------------------------------------------------------
29 0000 X. XXXX XXXX 1 Base 13,855.29 Base 0.00 Base 13,855.29 1 - 5 year option
WEBSTER, TEXAS Mgmt Fee 277.11 Cam 0.00 Cam 277.11 Base
Insurance 0.00 Insurance 0.00 Insurance 0.00 Mgmt Fee
CTI 2,314.29 CTI 0.00 CTI 2,314.29 2 - 5 year option
16,446.69 0.00 16,446.69 Base
Mgmt Fee
30 9333/35 STELLA LINK Base 7,050.00 Base 0.00 Base 7,050.00 2 - 5 year option
HOUSTON, TEXAS Cam 846.00 Cam 0.00 Cam 846.00 Base
Insurance 372.00 Insurance 0.00 Insurance 372.00
Taxes 1,295.00 Taxes 0.00 Taxes 1,295.00
Sign 50.00 Sign 0.00 Sign 50.00
9,613.00 0.00 9,613.00
*44 LAKELINE MALL Base 27,768.00 Base 0.00 Base 27,768.00 3 - 5 year options
Lakeline 11101 PECAN PARK Cam 0.00 Cam 0.00 Cam 0.00 1 - 3 year option
AUSTIN, TEXAS Insurance 0.00 Insurance 0.00 Insurance 0.00 Base
Taxes 0.00 Taxes 0.00 Taxes 0.00 1 - 3 year option
27,768.00 0.00 27,768.00 Base
1 - 3 year option
Base
1 - 3 year option
Base
1 - 3 year option
Base
*45 0000 X. XXXXXXXX XX. Base 28,600.00 Base 0.00 Base 28,600.00 3 - 5 year options
Xxxxxxxx Xx. XXXXXX, XXXXX 00000- Cam 0.00 Cam 0.00 Cam 0.00 1 - 3 year option
Insurance 0.00 Insurance 0.00 Insurance 0.00 Base
Taxes 0.00 Taxes 0.00 Taxes 0.00 1 - 3 year option
28,600.00 0.00 28,600.00 Base
1 - 3 year option
Base
1 - 3 year option
Base
1 - 3 year option
Base
SCHEDULE 3.05(a)(ii)
Page 7
--------------------------------------------------------------------------------------------------------------------------------
TOTAL DATE DATE
LANDLORD AND LEASE FIRST LAST PRIMARY
LOCATION LOCATION BILLING ADDRESS PMTS PMT DUE PMT DUE LEASE TERMS
--------------------------------------------------------------------------------------------------------------------------------
*46 00000 X. XX 0000, SPECIALIZED REALTY 27,083.33 4/15/2002 4/1/17-4/15/17 4/15/02 - 4/15/2017
Bandera SAN ANTONIO, TEXAS SERVICES, LP
Point X.X. XXX 0000
XXXXXXXX, XXXXX 00000
47 DR. ABLERTSON'S, INC. 21,948.75 12/1/01-12/30/12
Corpus CORPUS CHRISTI, TX 000 XXXXXXXXXX XXXX.
Xxxxxxx X.X. XXX 00
XXXXX, XX 00000
48 SQUARE RS SHOPPING CENTER, LTD. 31,200.00 10/15/2002 10/1/2012 10/15/02 - 10/14/12
Round Rock SHOPPING CENTER P.O. BOX 97221
0000 X. 0X-00, XXXXXX, XXXXX 75397-2721
SUITE 000
XXXXX XXXX, XX
60 0000 XXXXXXXXXX XX., PROLOGIS DEVELOPMENT 76,796.67 2/1/2001 - 1/31/2011
S.A. Whse SAN ANTONIO, TX X.X. XXX 000000
XXXXXX, XXXXX 00000-0000
-----------------------------------------------------------------------------------------------------------------------------
PRIMARY AMENDMENT TOTAL NUMBER
LEASE PAYMENT OR OPTION LEASE PAYMENT OF RENEWAL
LOCATION LOCATION COMPUTATION COMPUTATION COMPUTATION OPTIONS
-----------------------------------------------------------------------------------------------------------------------------
*46 00000 X. XX 0000, Base 27,083.33 Base 0.00 Base 27,083.33
Bandera SAN ANTONIO, TEXAS Cam 0.00 Cam 0.00 Cam 0.00
Point Insurance 0.00 Insurance 0.00 Insurance 0.00
Taxes 0.00 Taxes 0.00 Taxes 0.00
27,083.33 0.00 27,083.33
47 DR. Base 21,948.75 Base 0.00 Base 21,948.75 I - 5 year option
Corpus CORPUS CHRISTI, TX Cam 0.00 Cam 0.00 Cam 0.00 Base
Christi
Insurance 0.00 Insurance 0.00 Insurance 0.00 2 - 5 year option
Taxes 0.00 Taxes 0.00 Taxes 0.00 Base
21,948.75 0.00 21,948.75 3 - 5 year option
Base
4 - 5 year option
BASE
48 SQUARE Base 22,500.00 Base 0.00 Base 22,500.00 1 - 5 year option
Round Rock SHOPPING CENTER Cam 0.00 Cam 0.00 Cam 0.00 Base
1601 S. 1H-35, Insurance 0.00 Insurance 0.00 Insurance 0.00 CTI
SUITE 500 Taxes 0.00 Taxes 0.00 Taxes 0.00 2 - 5 year option
ROUND ROCK, TX CTI 8,700.00 CTI 0.00 CTI 8,700.00 Base
31,200.00 0.00 31,200.00 CTI
3 - 5 year option
Base
CTI
60 4810 XXXXXXXXXX XX., Base 60,220.00 Base 0.00 Base 60,220.00 None
S.A. Whse SAN ANTONIO, TX Cam 7,380.00 Cam 0.00 Cam 7,380.00
Insurance 668.33 Insurance 0.00 Insurance 668.33
Taxes 8,528.34 Taxes 0.00 Taxes 8,528.34
76,796.67 0.00 76,796.67
SCHEDULE 3.05(a)(ii)
Page 8
------------------------------------------------------------------------------------------------------------------------
TOTAL DATE DATE
LANDLORD AND LEASE FIRST LAST PRIMARY
LOCATION LOCATION BILLING ADDRESS PMTS PMT DUE PMT DUE LEASE TERMS
------------------------------------------------------------------------------------------------------------------------
61 2514 S. W. MILITARY SPECIALIZED REALTY 30,167.00 8/3/2002 8/1/2017 8/16/02 - 8/31/17
SAN ANTONIO, TX SERVICES, LP
X.X. XXX 0000
XXXXXXXX, XXXXX 00000
62 0000 X.X. XXXX 410 0000 XXXXX XXXXX XXXX 7 19,093.02 1/1/2002 8/1/2010 1/1/02 - 8/31/2010
Sports SAN ANTONIO, TX FT. XXXXXXXXXX, XX 00000
Authority
SUMMIT JOINT VENTURE II 9,546.51 9/1/2010 7/1/2014 9/1/10 - 7/31/2014
0000 X. X. XXXX 000
XXX XXXXXXX, XXXXX 00000
64 4022 W. COMMERCE LOOPY LIMITED 5,000.00 9/1/2000 - 8/31/2005
Commerce SAN ANTONIO, TEXAS 0000 XXXX, XXXXX 000
XXX XXXXXXX, XXXXX 00000
65 281 @ BITTERS ROAD XXXXXXX XXXXX CONN, LP 15,000.00 8/1/98 - 7/31/2008
SAN ANTONIO, TEXAS X.X. XXX 0000
XXXXXXXX, XXXXX 00000
-----------------------------------------------------------------------------------------------------------------------------
PRIMARY AMENDMENT TOTAL NUMBER
LEASE PAYMENT OR OPTION LEASE PAYMENT OF RENEWAL
LOCATION LOCATION COMPUTATION COMPUTATION COMPUTATION OPTIONS
-----------------------------------------------------------------------------------------------------------------------------
61 2514 S. W. MILITARY Base 30,167.00 Base 0.00 Base 30,167.00 1 - 3 year option
SAN ANTONIO, TX Cam 0.00 Cam 0.00 Cam 0.00 Base
Insurance 0.00 Insurance 0.00 Insurance 0.00 1 - 3 year option
Taxes 0.00 Taxes 0.00 Taxes 0.00 Base
30,167.00 0.00 30,167.00 1 - 3 year option
Base
1 - 3 year option
Base
1 - 3 year option
Base
62 0000 X.X. XXXX 000 Xxxx 19,093.02 Base 0.00 Base 19,093.02 None
Sports SAN ANTONIO, TX Cam 0.00 Cam 0.00 Cam 0.00
Authority Insurance 0.00 Insurance 0.00 Insurance 0.00
Taxes 0.00 Taxes 0.00 Taxes 0.00
19,093.02 0.00 19,093.02
Base 26,127.02 Base 0.00 Base 26,127.02 1 - 5 year option
Cam 0.00 Cam 0.00 Cam 0.00 1-2 years
Insurance 0.00 Insurance 0.00 Insurance 0.00 3-5 years
Taxes 0.00 Taxes 0.00 Taxes 0.00 2 - 5 year option
26,127.02 0.00 26,127.02 3 - 5 year option
4 - 5 year option
64 0000 X. XXXXXXXX Base 5,000.00 Base 0.00 Base 5,000.00 1 - 5 year option
Commerce SAN ANTONIO, TEXAS Cam 0.00 Cam 0.00 Cam 0.00 Base
Insurance 0.00 Insurance 0.00 Insurance 0.00 2 - 5 year option
Base
Taxes 0.00 Taxes 0.00 Taxes 0.00
5,000.00 0.00 5,000.00
65 281 @ BITTERS ROAD Base 15,000.00 Base 0.00 Base 15,000.00 1 - 5 year option
SAN ANTONIO, TEXAS Cam 0.00 Cam 0.00 Cam 0.00 Base
Insurance 0.00 Insurance 0.00 Insurance 0.00 2 - 5 year option
Taxes 0.00 Taxes 0.00 Taxes 0.00 Base
15,000.00 0.00 15,000.00 3 - 5 year option
Base
SCHEDULE 3.05(a)(ii)
Page 9
-----------------------------------------------------------------------------------------------------------------------------
TOTAL DATE DATE
LANDLORD AND LEASE FIRST LAST PRIMARY
LOCATION LOCATION BILLING ADDRESS PMTS PMT DUE PMT DUE LEASE TERMS
-----------------------------------------------------------------------------------------------------------------------------
66 6425 IH-35 SOUTH, NEC XXXXXX / 35, LTD. 27,812.67 11/17/2000 11/1/2010 11/27/00 - 11/30/10
XXXXXX, XXXXX 00000 SERVICE
X.X. XXX 000000
XXXXXX, XXXXX 00000-0000
67 5441 XX-00 XXXXX XXXXXXX / XXXXXXX 00, 20,850.63 4/23/2001 4/23/01 - 4/30/2011
XXXXXX, XXXXX 00000 C/O CENCOR REALTY
X.X. XXX 000000
XXXXXX, XXXXX 00000-0000
68 7730 IH-35 NORTH XXXXX X. XXXXXXX, 16,625.00 9/21/01 1/1/2007 2/1/2001 - 1/31/2007
SAN ANTONIO, TEXAS NFP PARTNERSHIP
0000 XXXXXXXX XXXXXX,
XXXXXX, XXXXX 00000
69 5219 DE ZAVALA KEY BANK OPERATING 36,060.36 1/1/2002 7/1/2011 1/1/02 - 7/31/2011
Dezavala SAN ANTONIO, TEXAS RETAIL, LTD.
78249-1723 KEY BUSINESS #
ATT: XXXXX XXXXX
0000 XXXXXXXX, XXXXX 000
XXXXXX, XX 00000
-----------------------------------------------------------------------------------------------------------------------------
PRIMARY AMENDMENT TOTAL NUMBER
LEASE PAYMENT OR OPTION LEASE PAYMENT OF RENEWAL
LOCATION LOCATION COMPUTATION COMPUTATION COMPUTATION OPTIONS
-----------------------------------------------------------------------------------------------------------------------------
66 0000 XX-00 XXXXX, Xxxx 17,766.67 Base 0.00 Base 17,766.67 1 - 5 year option
XXXXXX, XXXXX 00000 Cam 5,182.00 Cam 0.00 Cam 5,182.00 Base
Insurance 400.00 Insurance 0.00 Insurance 400.00 2 - 5 year option
Taxes 4,464.00 Taxes 0.00 Taxes 4,464.00 Base
27,812.67 0.00 27,812.67
67 0000 XX-00 XXXXX Xxxx 15,795.63 Base 0.00 Base 15,795.63 1 - 5 year option
XXXXXX, XXXXX 00000 Cam 2,296.00 Cam 0.00 Cam 2,296.00 Base
Insurance 379.00 Insurance 0.00 Insurance 379.00 2 - 5 year option
Taxes 2,380.00 Taxes 0.00 Taxes 2,380.00 Base
20,850.63 0.00 20,850.63
68 0000 XX-00 XXXXX Xxxx 16,625.00 Base 0.00 Base 16,625.00 1 - 5 year option
SAN ANTONIO, TEXAS Cam 0.00 Cam 0.00 Cam 0.00 Base
Insurance 0.00 Insurance 0.00 Insurance 0.00 2 - 5 year option
CTI 0.00 CTI 0.00 CTI 0.00 Base
16,625.00 0.00 16,625.00 3 - 5 year option
Base
4 - 5 year option
Xxxx
00 0000 XX XXXXXX Base 26,833.33 Base 0.00 Base 26,833.33 4 - 5 year options
Dezavala SAN ANTONIO, TEXAS Cam 0.00 Cam 0.00 Cam 0.00 years 11 - 12
78249-1723 Insurance 0.00 Insurance 0.00 Insurance 0.00 years 13 - 15
CTI 9,227.03 CTI 0.00 CTI 9,227.03 years 16 - 18
36,060.36 0.00 36,060.36 years 19 - 21
years 22 - 24
years 25 - 27
years 28 - 30
SCHEDULE 3.05(a)(ii)
Page 10
-----------------------------------------------------------------------------------------------------------------------------
TOTAL DATE DATE
LANDLORD AND LEASE FIRST LAST PRIMARY
LOCATION LOCATION BILLING ADDRESS PMTS PMT DUE PMT DUE LEASE TERMS
-----------------------------------------------------------------------------------------------------------------------------
70 0000 XXXX XXXXXXX XXXXXXXXX DRIVE, LTD. 22,252.27 11/19/1999 11/1/2009 11/19/99 - 11/30/2009
HOUSTON, TEXAS C/O MOODY XXXXXX
00000 XXXXXXXX XX.,
XXXXX XXXXXXX,
XXXXX 00000
71 11051 NORTHWEST XXXXXXXXXX REALTY 18,142.00 11/4/99 - 00/00/0000
Xxxxxxxx XXXXXXX, XXXXX X.X. XXX 000000
Xxxxxxxx Xxx XXXXXXX, XXXXX 00000
72 0000 X. XXXX XXXXX XXXXXXXXX DRIVE, LTD. 29,166.67 10/1/1999 9/1/2014 10/1/99 - 9/30/2014
HOUSTON, TEXAS C/O MOODY XXXXXX
00000 XXXXXXXX XX.,
XXXXX XXXXXXX,
XXXXX 00000
00 XXXXXXXXXX XXXXX XXXXXXXXXX REALTY 13,680.68 7/27/2000 7/1/2010 7/28/2000 - 7/31/2010
0000 XXXX 000 XXXXX, X.X. XXX 000000
XXXXXX, XXXXX 00000 XXXXXXX, XXXXX 00000
74 19075 XX-00 XXXXX, XXXXXXXXX, LTD. 27,110.00 5/6/2001 12/1/2011 5/6/01 - 12/31/2011
SHENANDOAH, TEXAS X/X XXXXXXXXX XXXXXXXX
X.X. XXX 0000
XXX XXXXXXXXX, XXXXX
-----------------------------------------------------------------------------------------------------------------------------
PRIMARY AMENDMENT TOTAL NUMBER
LEASE PAYMENT OR OPTION LEASE PAYMENT OF RENEWAL
LOCATION LOCATION COMPUTATION COMPUTATION COMPUTATION OPTIONS
-----------------------------------------------------------------------------------------------------------------------------
70 6888 GULF FREEWAY Base 17,364.29 Base 0.00 Base 17,364.29 1 - 5 year option
HOUSTON, TEXAS Cam 2,085.08 Cam 0.00 Cam 2,085.08 Base
Insurance 0.00 Insurance 0.00 Insurance 0.00 2 - 5 year option
Taxes 2,802.90 Taxes 0.00 Taxes 2,802.90 Base
22,252.27 0.00 22,252.27
71 11051 NORTHWEST Base 14,250.00 Base 0.00 Base 14,250.00 1 - 5 year option
Xxxxxxxx HOUSTON, TEXAS Cam 1,721.00 Cam 0.00 Cam 1,721.00 Base
Shopping Ctr Insurance 390.00 Insurance 0.00 Insurance 390.00 2 - 5 year option
Taxes 1,781.00 CTI 0.00 CTI 1,781.00 Base
18,142.00 0.00 18,142.00
* THE RENEWAL
PAYMENT IS
THAN WE ARE
CURRENTLY
THE LEASE
MUST BE
72 0000 X. XXXX XXXXX Xxxx 29,166.67 Base 0.00 Base 29,166.67 1 - 5 year option
HOUSTON, TEXAS Cam 0.00 Cam 0.00 Cam 0.00 Base
Insurance 0.00 Insurance 0.00 Insurance 0.00 2 - 5 year option
CTI 0.00 CTI 0.00 CTI 0.00 Base
29,166.67 0.00 29,166.67 3 - 5 year option
Base
00 XXXXXXXXXX XXXXX Base 8,185.00 Base 0.00 Base 8,185.00 1 - 5 year option
0000 XXXX 000 XXXXX, Cam 2,385.36 Cam 0.00 Cam 2,385.36 Base
XXXXXX, XXXXX 00000 Insurance 514.49 Insurance 0.00 Insurance 514.49 2 - 5 year option
Taxes 2,595.83 Taxes 0.00 Taxes 2,595.83 Base
13,680.68 0.00 13,680.68
74 00000 XX-00 XXXXX, Xxxx 18,750.00 Base 0.00 Base 18,750.00 1 - 5 year option
SHENANDOAH, TEXAS Cam 3,147.00 Cam 0.00 Cam 3,147.00 Base
Insurance 375.00 Insurance 0.00 Insurance 375.00 2 - 5 year option
Taxes 4,838.00 Taxes 0.00 Taxes 4,838.00 Base
27,110.00 0.00 27,110.00
SCHEDULE 3.05(a)(ii)
Page 11
-----------------------------------------------------------------------------------------------------------------------------
TOTAL DATE DATE
LANDLORD AND LEASE FIRST LAST PRIMARY
LOCATION LOCATION BILLING ADDRESS PMTS PMT DUE PMT DUE LEASE TERMS
-----------------------------------------------------------------------------------------------------------------------------
76 00000 X. X. XXXXXXX c/o SM NEWCO SUGAR LAND, 43,316.83 1/25/2003 3/1/03 - 2/27/18
Sugarland SUGARLAND, TEXAS DEVELOPERS DIVERSIFIED
CORPORATION
0000 XXXXXXXXXX XXXXXXX
XXXXXXXXX, XX 00000
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
PRIMARY AMENDMENT TOTAL NUMBER
LEASE PAYMENT OR OPTION LEASE PAYMENT OF RENEWAL
LOCATION LOCATION COMPUTATION COMPUTATION COMPUTATION OPTIONS
-----------------------------------------------------------------------------------------------------------------------------
76 00000 X. X. XXXXXXX Base 27,083.33 Base 0.00 Base 27,083.33 1st - 5 year option
Sugarland SUGARLAND, TEXAS Cam 7,310.83 Cam 0.00 Cam 7,310.83 (2/28/18 - 2/27/23)
Insurance 0.00 Insurance 0.00 Insurance 0.00 2nd - 5 year option
Taxes 8,922.67 Taxes 0.00 Taxes 8,922.67 (2/28/23 - 2/27/28)
43,316.83 0.00 43,316.83 3rd - 5 year option
(2/28/28 - 2/27/33)
4th - 5 year option
(2/28/33 - 2/27/38)
-----------------------------------------------------------------------------------------------------------------------------
SCHEDULE 3.05(a)(ii)
Page 12
CONN APPLIANCES, INC. and SUBSIDIARIES
OFFICERS AND DIRECTORS
2002 - 2003
SCHEDULE 3.15(a)
CONN APPLIANCES, INC.
BOARD OF DIRECTORS
Xxx Xxxxx Xxxxxxx X. Xxxxxx *Xxxxxx Xxxxxxxxx
*X. X. Xxxx, Xx. * Xxxxxx Xxxxxxx, Xx. Xxxxx Xxxxx
Xxxx Xxxxx * Xxxx Xxxxxxx
X. X. Xxxxxxxxx Xxxx Xxxxx
* Advisory Directors
OFFICERS
Xxx Xxxxx Chairman / CEO
Xxxx Xxxxx President/COO
Xxxx Xxxxx Executive Vice President/Chief Financial Officer
Xxxxx Xxxxxx, Senior Vice President Merchandising
Xxxxxx Xxxxxxxxx, Senior Vice President Sales
Xxxxxx Xxx, Senior Vice President Advertising
Xxxxx Xxxxx, Senior Vice President Secretary / Treasurer
Xxx X Xxxxx, Vice President ECommerce and Direct Marketing
Xxxxxxx Xxxxxxxx, Vice President Distribution
Xx Xxxxxxx, Vice President Service Operations
Xxxxx X. Xxxxxxx, Vice President of Management Information Systems
Rey de la Fuente, Vice President of Credit Division
CONN CREDIT CORPORATION, INC.
BOARD OF DIRECTORS OFFICERS
Rey de la Fuente Xxxxxx X. Xxxxx, Xx. Chairman/ CEO
Xxxxxx X. Xxxxx, Xx. Chairman Rey de la Fuente, President/COO
Xxxxxxx X. Xxxxx, Xx. Xxxxxxx X. Xxxxx, Xx., Senior VP
Xxxxxx Xxxxxxxxx C. Xxxxxxx Xxxxx CFO
C. Xxxxxxx Xxxxx Xxxxxx Xxxxxxxxx Vice President
Xxxxx Xxxxx Xxxxx Xxxxxxx, Vice President
Xxxxx Xxxxx Secretary / Treasurer
CAI CREDIT INSURANCE AGENCY, INC.
BOARD OF DIRECTORS OFFICERS
Xxxxxx X. Xxxxx, Chairman Xxxxxx X. Xxxxx Chief Executive Officer
Xxxxx X. Xxxxx Xxxxx X. Xxxxx President/COO
Wm. X. Xxxxx, Xx. C. W. "Xxxx" Xxxxx Chief Financial Officer
C. Xxxxxxx Xxxxx Wm. X. Xxxxx, Xx. Secretary-Treasurer
Rey de la Fuente Xxxxx X. Xxxxxx, Vice President - Sales
Xxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxxx, Vice President - Risk
CAIAIR, INC
BOARD OF DIRECTORS OFFICERS
Xxxxxx X. Xxxxx, Xx. Xxxxxx X. Xxxxx, Xx. CEO/CHMN of Board
C. Xxxxxxx Xxxxx, VP/CFO
Xxxxx X. Xxxxx, Secretary/Treasurer
CONN'S INC
BOARD OF DIRECTORS OFFICERS
Xxxxxx X. Xxxxx, Xx. Xxxxxx X. Xxxxx, Xx. CEO/CHMN
Xxxxxxx X. Xxxxxx Xxxxxxx X. Xxxxx, Xx President/COO
Xxxxxxx X. Xxxxx, Xx. C. Xxxxxxx Xxxxx Executive Vice President/CFO
C. Xxxxxxx Xxxxx Xxxxx X. Xxxxxx SVP - Merchandising
X.X. Xxxxxxxxx Xxxxxx X. Xxxxxxxxx SVP - Sales/Store
Operations
Xxxxx X. Xxxxx Xxxxxx X. Xxx, Xx. SVP- Advertising
Xxxxx X. Xxxxx SVP - Secretary/Treasurer
CONN APPLIANCES, LLC
BOARD OF DIRECTORS OFFICERS
Xxxxxx X. Xxxxx, Xx Xxxxxxxx Xxxxxxx, President& Secretary
2
CONN CREDIT, LLC
BOARD OF DIRECTORS OFFICERS
Xxxxxx X. Xxxxx, Xx. Xxxxxxxx Xxxxxxx, President & Secretary
CAI CREDIT, LLC
BOARD OF DIRECTORS OFFICERS
Xxxxxx X. Xxxxx Xxxxxxxx Xxxxxxx, President and Secretary
3
CONNAPP CO./CONN APPLIANCES, INC.
PROJECTED STOCKHOLDER LISTING
AFTER STEPHEN'S INC LBO. INCLUDING OPTIONS AVAILABLE
COMMON & PREFERRED SHARES ISSUED/OUTSTANDING Schedule 3.15(b)
----------------------------------------------------------------------------------------------------------------------
COMMON PREFERRED-10% ACCUMULATIVE
----------------------------------------------------------
OWNER SHARES % OS % FULL SHARES %OS %FULL
----------------------------------------------------------------------------------------------------------------------
XXX XXXXX * 0 0.0000% 0.0000% 417 0.239% 0.239%
XXX XXXXXX * 0 0.0000% 0.0000% 0 0.000% 0.000%
XXXXX XXXXX * 175,000 1.0467% 1.0189% 711 0.407% 0.407%
XXXXX XXXXXX * 54,600 0.3266% 0.3179% 651 0.373% 0.373%
XXXXXX XXXXXXXXX * 94,500 0.5652% 0.5502% 417 0.239% 0.239%
XXX XXXX * 112,000 0.6699% 0.6521% 856 0.490% 0.490%
XXXXX XXXXX * 149,730 0.8955% 0.8718% 355 0.203% 0.203%
XXXX XXXXX * 222,320 1.3297% 1.2944% 0 0.000% 0.000%
XXX XXXXX * 385,000 2.3026% 2.2416% 19,252 11.023% 11.023%
Xxxxxx X. Xxxxx, Trustee for * 0 0.0000% 0.0000% 0.000% 0.000%
TJF Retained Annuity Trust * 875,000 5.2333% 5.0946% 0.000% 0.000%
XX XXXXXXXXX * 70,000 0.4187% 0.4076% 834 0.478% 0.478%
XXXXXX XXXXXXXXX * 315,000 1.8840% 1.8341% 3,753 2.149% 2.149%
XXXXX XXXXXXXXXX * 39,270 0.2349% 0.2286% 533 0.305% 0.305%
XXXXXXX XXXXXXXX * 126,000 0.7536% 0.7336% 1,067 0.611% 0.611%
XXXX XXXXX * 342,930 2.0510% 1.9967% 479 0.274% 0.274%
XX XXXXXXX * 86,450 0.5170% 0.5033% 613 0.351% 0.351%
XXXXX XXXXXX * 194,530 1.1635% 1.1326% 1,067 0.611% 0,611%
XXXX XXXXXXX * 75,390 0.4509% 0.4390% 0 0.000% 0.000%
XXX XXXXXX * 60,900 0.3642% 0.3546% 142 0.081% 0.081%
XXXXX XXXXXX * 42,000 0.2512% 0.2445% 0 0.000% 0.000%
XXXX XXXXXX * 49,000 0.2931% 0.2853% 0 0.000% 0.000%
XXX XXXXX * 83,860 0.5016% 0.4883% 0 0.000% 0.000%
REY de la FUENTE * 42,000 0.2512% 0.2445% 0 0.000% 0.000%
XXX XXXXXXXX * 42,000 0.2512% 0.2445% 0 0.000% 0.000%
XXXXX XXXXXXXXXXX * 35,000 0.2093% 0.2038% 0 0.000% 0.000%
XXXXX XXXXXXX * 38,500 0.2303% 0.2242% 0 0.000% 0.000%
XXXXXX XXX * 49,000 0.2931% 0.2853% 0 0.000% 0.000%
Xxxxxxxx Inc X 490,000 2.9306% 2.8530% 14,351 8.217% 8.217%
Xxxxxxx T Xxxxxxxx Trust No One X 0 0.0000% 0.0000% 20,017 11.461% 11.461%
Xxxx X. Xxxxxxxx Trust UID 1/4/85 X 0 0.0000% 0.0000% 20,017 11.461% 11.461%
Xxxxxx X Xxxxxxxx Trust UID 9/30/87 X 2,019,526 12.0785% 11.7585% 5,004 2.865% 2.865%
Xxxxxx X Xxxxxxxx Grantor Trust UID 9/30/87 X 168,498 1.0078% 0.9811% 0.000% 0.000%
XX Xxxxxxxx Xx Revocable Trust X 1,415,190 8.4641% 8.2398% 1,668 0.955% 0.955%
Xxxxxx X Xxxxxxxx Trust One UID 4/10/92 X 1,664,534 9.9553% 9.6916% 1,763 1.009% 1.009%
Xxxxxxxxx X. Xxxxxxxx Revocable Trust 8/5/92 X 1,415,190 8.4641% 8.2398% 1,668 0.955% 0.955%
Xxxxxxxx Investment Partners III LLC X 401,450 2.4010% 2.3374% 4,783 2.739% 2.739%
Xxx Xxxxxx X 602,210 3.6017% 3.5063% 7,175 4.108% 4.108%
Xxxx Xxxxxxxxx X 240,870 1.4406% 1.4024% 2,870 1.643% 1.643%
Xxxx Xxxxxx XXX X 0 0.0000% 0.0000% 3,827 2.191% 2.191%
Xxxx Xxxxxx X 321,160 1.9208% 1.8699% 0.000% 0.000%
Xxx Xxxx XXX X 0 0.0000% 0.0000% 1,913 1.095% 1.095%
Xxx Xxxx X 160,580 0.9604% 0.9350% 0.000% 0.000%
Xxx Xxxxxxx XXX X 0 0.0000% 0.0000% 574 0.329% 0.329%
Xxx Xxxxxxx X 48,160 0.2880% 0.2804% 0.000% 0.000%
Xxxx Xxxxxx XXX X 0 0.0000% 0.0000% 239 0.137% 0.137%
Xxxx & Xxxxxx Xxxxxx X 0 0.0000% 0.0000% 239 0.137% 0.137%
Xxxxxx Family Partnership X 40,180 0.2403% 0.2339% 0.000% 0.000%
Xxxxxxx Xxxxxx XXX X 0 0.0000% 0.0000% 143 0.082% 0.082%
Xxxxxxx Xxxxxx X 12,040 0.0720% 0.0701% 0.000% 0.000%
Xxxxxx X. & Xxxxxx Xxxxxxx X 120,470 0.7205% 0.7014% 1,435 0.822% 0.822%
Xxxxxx Xxxxx XXX X 0 0.0000% 0.0000% 479 0.274% 0.274%
Xxxxxx Xxxxx X 40,180 0.2403% 0.2339% 0.000% 0.000%
Xxxxxxx X. Xxxxxx X 80,290 0.4802% 0.4675% 957 0.548% 0.548%
DW Family Limited Partnership X 120,470 0.7205% 0.7014% 1,435 0.822% 0.822%
Xxxxx X XxXxxxxx X 0 0.0000% 0.0000% 0 0.000% 0.000%
Xxxxxx X. XxXxxxxx X 80,290 0.4802% 0.4675% 956 0.547% 0.547%
Xxxxxxxx Group, Inc. X 0 0.0000% 0.0000% 51,127 29.274% 29.274%
Xxxxxx & Xxxxxxx Xxxxxxxx Children Trust UID 9/30/87 X 1,018,123 6.0893% 5.9279% 0 0.000% 0.000%
Xxxxxx Xxxxx Xxxxxxx Xxxxxxxx Trust UID 12/4/95 X 51,282 0.3067% 0.2986% 0.000% 0.000%
Grandchild's Trust #2 X 765,100 4.5760% 4.4547% 0 0.000% 0.000%
Xxxxxxx X. Xxxxxxxx Trust UID 3/22/84 X 789,100 4.7195% 4.5945% 0 0.000% 0.000%
Xxxx Xxxxxxx Xxxxxxxx Trust UID 12/4/95 X 51,282 0.3067% 0.2986% 0.000% 0.000%
Xxxxx Xxxxxxxx Xxxxxxxx Trust UID 12/4/95 X 51,282 0.3067% 0.2986% 0.000% 0.000%
Xxxxxx Xxxxx Xxxxxxx Xxxxxxxx Trust UID 9/10/86 X 3,920 0.0234% 0.0228% 42 0.024% 0.024%
Xxxx Xxxxxxx Xxxxxxxx Trust UID 12/1/87 X 3,920 0.0234% 0.0228% 42 0.024% 0.024%
Xxxxx Xxxxxxxx Xxxxxxxx Trust UID 12/28/90 X 3,920 0.0234% 0.0228% 42 0.024% 0.024%
Xxxxx Xxxxxxx X 770 0.0046% 0.0045% 10 0.006% 0.006%
Xxxx Xxxxxxx X 4,540 0.0272% 0.0264% 0.000% 0.000%
Xxxx X. and Xxxxx Xxxxxxx X 7,000 0.0419% 0.0408% 0.000% 0.000%
Xxxxx Xxxxxx X 7,770 0.0465% 0.0452% 10 0.006% 0.006%
Xxxxx Xxxxxxx X 7,770 0.0465% 0.0452% 10 0.006% 0.006%
Xxxxxxx Xxxxxxx X 7,770 0.0465% 0.0452% 10 0.006% 0.006%
Xxxxx Xxxxxx X 7,770 0.0465% 0.0452% 10 0.006% 0.006%
Xxxx X. Xxxxxxx XX X 7,770 0.0465% 0.0452% 10 0.006% 0.006%
Xxxx X. and Xxxxxx Xxxxxxx XX X 0 0.0000% 0.0000% 0.000% 0.000%
Xxxxxxx Xxxxxxxx Xxxxxxx X 3,205 0.0192% 0.0187% 10 0.006% 0.006%
Xxxx X. Xxxxxxx XX X 3,205 0.0192% 0.0187% 10 0.006% 0.006%
Xxxxx Xxxxx X 1,470 0.0088% 0.0086% 10 0.006% 0.006%
Xxx Xxxxx X 1,470 0.0088% 0.0086% 10 0.006% 0.006%
Xxxxx Xxxxxxx X 1,470 0.0088% 0.0086% 10 0.006% 0.006%
Xxxxxx Xxxxxx X 1,470 0.0088% 0.0086% 10 0.006% 0.006%
Xxxxx Xxxxxx X 1,678 0.0100% 0.0098% 10 0.006% 0.006%
Xxxxxxx Xxxxx X 770 0.0046% 0.0045% 10 0.006% 0.006%
Xxxx Xxxxxxxxx X 770 0.0046% 0.0045% 10 0.006% 0.006%
Xxxxx Xxxxxx Xxxxxxxx Trust UID 10/20/99 X 3,990 0.0239% 0.0232% 48 0.027% 0.027%
XX Xxxxxxxx III LID 7/2/01 X 3,990 0.0239% 0.0232% 48 0.027% 0.027%
MAM International Holdings, Inc. X 249,344 1.4913% 1.4518% 95 0.054% 0.054%
Xxxxxxxx Investment Partners 2000 LLC X 182,609 1.0922% 1.0632% 0.000% 0.000%
Xxxxxxxx Investment Partners 2001 LLC X 32,130 0.1922% 0.1871% 384 0.220% 0.220%
Xxxxx Xxxxxxxx X 13,519 0.0809% 0.0787% 0 0.000% 0.000%
XX Xxxxxxxx Xx Children's Trust X 227,774 1.3623% 1.3262% 0 0.000% 0.000%
Xxxxxxx Xxxxxxx X 770 0.0046% 0.0045% 10 0.006% 0.006%
TOTAL OUTSTANDING SHARES 16,719,990 100.0000% 97.3508% 174,648 100.000% 100.000%
TREASURY STOCK 455,000 2.6492% 0 0.000%
--------------------------------------------------------------
TOTAL ISSUED 17,174,990 100.0000% 174,648 100.000%
==============================================================
* See Schedule 3.15(C) 3,759,980 22.4879% 31,147 17.834%
==============================================================
X Xxxxxxxx Group 12,960,010 77.5121% 143,501 82.166%
==============================================================
OPTIONS AVAILABLE:
--------------------------------------------------------------------------------
GRANTEE SHARES PRICE EXPIRES
--------------------------------------------------------------------------------
Xxxx Xxxxxx 35,000 4.29 11/30/09
Xxxxxxx Xxxxxxx 17,500 4.29 01/09/10
Xxx Xxxxxxx 49,000 8.21 07/27/10
Xxxxx Xxxxx 35,000 8.21 07/27/10
Xxxx Xxxxxxx 35,000 8.21 07/27/10
Xxxxxx Xxx 21,000 8.21 07/27/10
Xxxxxxx Xxxxxxxx 49,000 8.21 07/27/10
Xxxxx Xxxxxxx 31,500 8.21 07/27/10
Rey Ddi la Fuente 28,000 8.21 07/27/10
X. X. Xxxxx 70,000 8.21 07/27/10
Xxxxxx Xxxxxxxxx 45,500 8.21 01/25/11
Rey de la Fuente 28,000 8.21 01/25/11
Xxxxxx Xxxxxxxx 24,500 8.21 01/25/11
Xxxxxx Xxxx 35,000 8.21 01/25/11
Xxxxx Xxxxxxxxxxx 14,000 8.21 01/25/11
Xxxx Xxxxxxx 35,000 8.21 01/25/11
Xxx Xxx 21,000 8.21 01/25/11
X.X Xxxxxxxx 35,000 8.21 01/25/11
Xxxxxx Xxxxx 14,000 8.21 01/25/11
Xxx Xxxx 28,000 8.21 01/25/11
Xxxxxxxx, Xxxxxx 35,000 8.21 07/15/11
Xxxxx, Xxxxx 35,000 8.21 07/26/11
de la Fuente, Rey 42,000 8.21 07/26/11
Xxxxxxxxxxx, Xxxxx 21,000 8.21 07/26/11
Xxxxxxxx, Xxx 28,000 8.21 07/26/11
Xxxxx, Xxxx 29,680 8.21 07/26/11
Xxxxx, Xxx 56,140 8.21 07/26/11
Xxx, Xxxxx 35,000 8.21 07/26/11
Xxxxx, Xxx 35,000 8.21 07/26/11
Xxx, Xxx 70,000 8.21 07/26/11
Xxxxx, Xxxx 28,070 8.21 07/26/11
Xxx Xxxxx 17,500 8.21 07/31/11
Xxxx Xxxxxx 21,000 8.21 07/31/11
Xxxx Xxxxxx 17,500 9.91 12/03/11
Xxxx Xxxxxx 17,500 9.91 12/03/11
Xxxx Xxxxxxx 28,000 10.83 06/28/12
Xxxx Xxxx 28,000 10.83 06/28/12
Xxxxx Xxxxx 20,000 10.83 08/02/12
Xxxxx Xxxxxxxxxx 20,000 10.83 08/02/12
Xxxx Xxxxx 20,000 10.83 08/02/12
1,255,390
RESTRICTED MANAGEMENT OPTIONS 523,520 NBV TBD
----------------------------
1,778,910
============================
CONNAPP CO./CONN APPLIANCES, INC.
PROJECTED STOCKHOLDER LISTING
AFTER STEPHEN'S INC LBO. INCLUDING OPTIONS AVAILABLE
DISQUALIFIED COMMON & PREFERRED SHARES ISSUED/OUTSTANDING Schedule 3.15(c)
-------------------------------------------------------------------------------------------------------------------------
RESTRICTED-COMMON UNRESTRICTED-COMMON
-----------------------------------------------------------------
OWNER SHARES % OS %FULL SHARES % OS % FULL
-------------------------------------------------------------------------------------------------------------------------
XXX XXXXX 0 0.0000% 0.0000% 0 0.0000% 0.0000%
XXX XXXXXX 0 0.0000% 0.0000% 0 0.0000% 0.0000%
XXXXX XXXXX 115,360 5.5948% 5.5948% 59,640 3.5122% 3.5122%
XXXXXX XXXXXXXXX 59,500 2.8857% 2.8857% 35,000 2.0612% 2.0612%
XXX XXXX 40,180 1.9487% 1.9487% 71,820 4.2295% 4.2295%
XXXX XXXXX 222,320 10.7822% 10.7822% 0 0.0000% 0.0000%
XX XXXXXXXXX 0 0.0000% 0.0000% 70,000 4.1224% 4.1224%
XXXX XXXXX 302,750 14.6829% 14.6829% 40,180 2.3662% 2.3662%
XX XXXXXXX 35,000 1.6974% 1.6974% 51,450 3.0299% 3.0299%
XXXXX XXXXXXXX 0 0.0000% 0.0000% 0 0.0000% 0.0000%
XXXX XXXXXXX 75,390 3.6563% 3.6563% 0 0.0000% 0.0000%
XXX XXXXX 0 0.0000% 0.0000% 0 0.0000% 0.0000%
XXXXX XXXXXX 42,000 2.0369% 2.0369% 0 0.0000% 0.0000%
XXXX XXXXXX 49,000 2.3764% 2.3764% 0 0.0000% 0.0000%
XXXX XXXXXXX 0 0.0000% 0.0000% 0 0.0000% 0.0000%
XXXXX XXXXX 0 0.0000% 0.0000% 0 0.0000% 0.0000%
REY de la FUENTE 42,000 2.0369% 2.0369% 0 0.0000% 0.0000%
XXXXXX XXXXX 0 0.0000% 0.0000% 0 0.0000% 0.0000%
XXX XXXXXXXX 42,000 2.0369% 2.0369% 0 0.0000% 0.0000%
XXXXX XXXXXXXXXXX 35,000 1.6974% 1.6974% 0 0.0000% 0.0000%
XXXXX XXXXXXX 38,500 1.8672% 1.8672% 0 0.0000% 0.0000%
XXXXXX XXX 49,000 2.3764% 2.3764% 0 0.0000% 0.0000%
XXX XXXXXXXX 0 0.0000% 0.0000% 0 0.0000% 0.0000%
XX XXXXXXXX 0 0.0000% 0.0000% 0 0.0000% 0.0000%
XXXXX XXXXXXX 0 0.0000% 0.0000% 0 0.0000% 0.0000%
XXXX XXXXXX 0 0.0000% 0.0000% 0 0.0000% 0.0000%
0.0000% 0.0000% 0 0.0000% 0.0000%
0.0000% 0.0000% 0 0.0000% 0.0000%
0.0000% 0.0000% 0 0.0000% 0.0000%
0.0000% 0.0000% 0 0.0000% 0.0000%
0.0000% 0.0000% 0 0.0000% 0.0000%
0.0000% 0.0000% 0 0.0000% 0.0000%
0.0000% 0.0000% 0 0.0000% 0.0000%
-----------------------------------------------------------------
TOTAL OUTSTANDING SHARES 2,061,920 100.0000% 100.0000% 1,698,060 100.0000% 100.0000%
TREASURY STOCK 0 0.0000% 0 0.0000%
-----------------------------------------------------------------
TOTAL ISSUED 2,061,920 100.0000% 1,698,060 100.0000%
-----------------------------------------------------------------
OPTIONS AVAILABLE:
--------------------------------------------------------------------------------
GRANTEE SHARES PRICE EXPIRES
--------------------------------------------------------------------------------
Xxxx Xxxxxx 35,000 4.29 11/30/09
Xxxxxxx Xxxxxxx 17,500 4.29 01/09/10
Xxx Xxxxxxx 49,000 8.21 07/27/10
Xxxxx Xxxxx 35,000 8.21 07/27/10
Xxxx Xxxxxxx 35,000 8.21 07/27/10
Xxxxxx Xxx 21,000 8.21 07/27/10
Xxxxxxx Xxxxxxxx 49,000 8.21 07/27/10
Xxxxx Xxxxxxx 31,500 8.21 07/27/10
Rey Ddi la Fuente 28,000 8.21 07/27/10
X. X. Xxxxx 70,000 8.21 07/27/10
Xxxxxx Xxxxxxxxx 45,500 8.21 01/25/11
Rey de la Fuente 28,000 8.21 01/25/11
Xxxxxx Xxxxxxxx 24,500 8.21 01/25/11
Xxxxxx Xxxx 35,000 8.21 01/25/11
Xxxxx Xxxxxxxxxxx 14,000 8.21 01/25/11
Xxxx Xxxxxxx 35,000 8.21 01/25/11
Xxx Xxx 21,000 8.21 01/25/11
X.X Xxxxxxxx 35,000 8.21 01/25/11
Xxxxxx Xxxx 14,000 8.21 01/25/11
Xxx Xxxx 28,000 8.21 01/25/11
Xxxxxxxx, Xxxxxx 35,000 8.21 07/15/11
Xxxxx, Xxxxx 35,000 8.21 07/26/11
de la Fuente, Rey 42,000 8.21 07/26/11
Xxxxxxxxxxx, Xxxxx 21,000 8.21 07/26/11
Xxxxxxxx, Xxx 28,000 8.21 07/26/11
Xxxxx, Xxxx 29,680 8.21 07/26/11
Xxxxx, Xxx 56,140 8.21 07/26/11
Xxx, Xxxxx 35,000 8.21 07/26/11
Xxxxx, Xxx 35,000 8.21 07/26/11
Xxx, Xxx 70,000 8.21 07/26/11
Xxxxx, Xxxx 28,070 8.21 07/26/11
Xxx Xxxxx 17,500 8.21 07/31/11
Xxxx Xxxxxx 21,000 8.21 07/31/11
Xxxx Xxxxxx 17,500 9.91 12/03/11
Xxxx Xxxxxx 17,500 9.91 12/03/11
Xxxx Xxxxxxx 28,000 10.83 06/28/12
Xxxx Xxxx 28,000 10.83 06/28/12
Xxxxx Xxxxx 20,000 10.83 08/02/12
Xxxxx Xxxxxxxxxx 20,000 10.83 08/02/12
Xxxx Xxxxx 20,000 10.83 08/02/12
1,255,390
RESTRICTED MANAGEMENT OPTIONS 523,520 NBV TBD
----------------------------
1,778,910
============================
CONN APPLIANCES, INC. and SUBSIDIARIES
Insurance Schedule 3.16
Coverage Term Bank as
No Carrier Description of Coverage Amount Months Expiration Loss Payee
-------------------------------------------------------------------------------------------------------------------
1 St. Xxxx Directors & Officers Liability 3,000,000 12 Aug-03 Yes
2 AIG Lawyers Professional 10,000 12 Aug-03 Yes
3 AAU Aviation 50,000,000 12 Aug-03 No
4 St. Xxxx General Liability Umbrella 50,000,000 12 Aug-03 Yes
5 AIG Crime & Employee Dishonesty 1,000,000 12 Aug-03 Yes
6 St. Xxxx Worker's Compensation-Texas 1,000,000 12 Aug-03 No
7 St. Xxxx Commercial Auto-Texas 2,000,000 12 Aug-03 No
8 St Xxxx Commercial Auto-Louisiana 2,000,000 12 Aug-03 No
9 St. Xxxx General Liability 2,000,000 12 Aug-03 Yes
10 Lexington Building & Contents Coverage 6,000,000 12 8/1/2003 Yes
11 Westchester Building and Contents Coverage 20,000,000 12 8/1/2003 Yes
12 CUIC Building and Contents Coverage 4,000,000 12 8/1/2003 Yes
13 Blue Cross Blue Shield Employee Health Stop Loss 1,000,000 12 Mar-99 No
14 Voyager Insurance Companies Credit Insurance Varies Until CX Until CX No
15 Voyager Insurance Companies Service Maintenance Agreements Varies Until CX Until CX No
CONN APPLIANCES, INC. and Subsidiaries
Other Debt Schedule 3.17
Outstanding
No Counterparty Purpose Balance Expiration
================================================================================================================================
1 GE CAPITAL CORPORATION (Formerly Metlife) $.675 MM Real Estate Financing -Store 27 40,000 7/1/2003
2 HIBERNIA NATIONAL BANK $.8 XX Xxxxxxx'x Comp Letter of Credit
3 Bank of AMERICA, NA -Texas $1.2 MM International Commercial Letters of Credit 800,000 Various
4 SUNTRUST BANK, NA $10.OMM Co-Mingle of FUNDS ABS Letter of Credit 10,000,000 8/31/2003
5 COMMUNITY BANK CAI $ 8 MM Unsecured Revolving Loan 4,000,000 4/1/2004
6 ENTERPRISE FLEET SERVICES Master Lease-Vehicles 1,044,000 Varies
7 CITICORP LEASING, INC. Master Lease-Vehicles 450,000 Varies
8 NAVASTAR FINANCIAL LEASING Master Lease-Vehicles 125,000 Varies
9 TRANSAMERICA COMMERCIAL FINANCE CORPORATION Inventory Floor Plan - $ 10,000,000 6,500,000 11/30/2003
10 GE CAPITAL CORPORATION Inventory Floor Plan - $ 12,000,000 7,500,000 11/30/2003
12 VOYAGER INDEMNITY COMPANY OFC Subordinated Debenture 3,500,000 11/30/2003
and CAI Keep Well Agreement
CONN APPLIANCES, INC. and Subsidiaries
CONN'S OPPORTUNITY FINANCE COMPANY
Restricted Agreements Permitted Schedule 6.08
Outstanding
No Counterparty Purpose Balance Expiration
============================================================================================================================
1 METLIFE CAPITAL CORPORATION $.675 MM Real Estate Financing -Store 27 46,275 11/3/2003
2 COMMUNITY BANK CAI $ 8 MM Unsecured Revolving Loan 500,000 4/24/2003
3 CITICORP LEASING, INC. Master Lease-Vehicles 350,000 Varies
4 NAVASTAR FINANCIAL LEASING Master Lease-Vehicles 125,000 Varies
5 TRANSAMERICA COMMERCIAL FINANCE CORPORATION Inventory Floor Plan 7,500,000 00-000 D
6 GE CAPITAL CORPORATION Inventory Floor Plan 8,000,000 00-000 D
7 CONN FUNDING II, GP and XXXXX FARGO as TTEE for Base Indenture, Supplements, Note Purchase 450,000,000 9/11/2007
SERIES 2002 A and B Noteholders Agreements and related documents.
8 VOYAGER INDEMNITY COMPANY OFC Subordianted Debenture 3,500,000 11/23/2003
and CAI Keep Well Agreement
CONN APPLIANCES, INC. and SUBSIDIARIES
Certain Contracts Schedule 6.09
No Counterparty Type of Document Purpose
=================================================================================================================================
1 CAI, LP Subordinated Note Receivable Funding for a the Deferred Sales Proceeds and
Unpurchased Receivables of Conn Funding II, LP
2 All Subsidiaries of Conn Appliances, Inc. 1000 shares of Commons Stock Organize and invest in wholly owned subsidiary
No Counterparty Amount Maturity
=======================================================================
1 CAI, LP Portfolio 9/11/2007
Determined
2 All Subsidiaries of Conn Appliances, Inc.
EXHIBIT A
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of , 2003
--------------
(as amended and in effect on the date hereof, the "Credit Agreement"), among
Conn Appliances, Inc., certain of its subsidiaries, the Lenders named therein,
Bank of America, N.A., as Documentation Agent, and JPMorgan Chase Bank, as
Administrative Agent for the Lenders. Terms defined in the Credit Agreement are
used herein with the same meanings.
The Assignor named herein hereby sells and assigns, without recourse, to
the Assignee named herein, and the Assignee hereby purchases and assumes,
without recourse, from the Assignor, effective as of the Assignment Date set
forth herein, the interests set forth herein (the "Assigned Interest") in the
Assignor's rights and obligations under the Credit Agreement, including, without
limitation, the interests set forth herein in the Revolving Loan Commitment and
Term Loan Commitment of the Assignor on the Assignment Date and Revolving Loans
and Term Loans owing to the Assignor on the Assignment Date and Revolving Loans
and Term Loans owing to the Assignor which are outstanding on the Assignment
Date, including accrued interest and fees through the Assignment Date. The
Assignee hereby acknowledges receipt of a copy of the Credit Agreement. From and
after the Assignment Date (i) the Assignee shall be a party to and be bound by
the provisions of the Credit Agreement and, to the extent of the Assigned
Interest, have the rights and obligations of a Lender thereunder and (ii) the
Assignor shall, to the extent of the Assigned Interest, relinquish its rights
and be released from its obligations under the Credit Agreement.
This Assignment and Acceptance is being delivered to the Administrative
Agent together with (i) if the Assignee is a Foreign Lender, any documentation
required to be delivered by the Assignee pursuant to Section 2.15(e) of the
Credit Agreement, duly completed and executed by the Assignee, and (ii) if the
Assignee is not already a Lender under the Credit Agreement, an Administrative
Questionnaire in the form supplied by the Administrative Agent, duly completed
by the Assignee.
This Assignment and Acceptance Shall be Governed by and Construed In
Accordance With the Laws of the State of Texas.
Legal Name of Assignor:
----------------------
Legal Name of Assignee:
----------------------
Effective Date of Assignment
("Assignment Date")
----------------------
Facility Principal Amount Assigned
-------- -------------------------
Commitment Assigned: $
----------------
Term Loans: $
----------------
The terms set forth above are hereby agreed to:
,
----------------------------------
as Assignor
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
,
----------------------------------
as Assignee
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
EXHIBIT B
FORM OF
BORROWING BASE REPORT
Monthly accounting period ended , 200
--------------- --
To: JPMorgan Chase Bank,
as Administrative Agent
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Date: , 200
------------------------- ----------- --
Re: Borrowing Base -- Consolidated Group
Reference is made to that certain Credit Agreement dated as of
, 2003 (the "Credit Agreement") executed by and among JPMorgan Chase
------------
Bank, individually and as Administrative Agent, NationsBank, N.A., individually
and as Documentation Agent, and the other banks or other financial institutions
which are or may become a party thereto in accordance with the terms thereof
(collectively, the "Lenders"), Conn Appliances, Inc. ("CAI") and the other
Borrowers thereunder.
Pursuant to Section 5.01(e) of the Credit Agreement, the undersigned, a
Financial Officer of CAI, hereby certifies that, to the best of his knowledge,
attached hereto as Annex 1 is a true and accurate calculation of the Borrowing
Base as at the end of the monthly accounting period ended , 200
----------- ----
determined in accordance with the requirements set forth in the Credit
Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Borrowing Base Report
to be duly executed as of the day of , 200 .
--------- ---------------- ----
----------------------------------------
Title: Financial Officer
FORM OF
LANDLORD'S AGREEMENT
The undersigned, as lessor ("Lessor"), has entered into a lease (such
lease, including all amendments, modifications, renewals, and extensions
thereto, being hereinafter referred to as the "Lease"), with
, as lessee ("Lessee"), with respect to
-----------------------------------------
the real property more particularly described on Exhibit "A" annexed hereto and
made a part hereof (the "Real Estate"). A true and complete copy of the Lease is
annexed hereto as Exhibit "B". The premises leased to Lessee by the Lease are
all or part of the Real Estate and are more particularly described in the Lease
(the "Premises").
Lessor has been informed that JPMorgan Chase Bank, individually and as
Administrative Agent (the "Agent"), and the other financial institutions listed
on the signature pages of the Credit Agreement (as hereinafter defined) (the
Agent and all the foregoing, are collectively the "Lenders") are providing
certain loans to Lessee or to an affiliate of Lessee. In connection with such
financing, Lessee intends to grant to Lenders (i) a first leasehold deed of
trust or mortgage (the "Leasehold Mortgage") on Lessee's interest in the Lease
and (ii) a security interest (the "Security Interest") in and to Lessee's
interest in the property more particularly described in Exhibit "C" annexed
hereto and made a part hereof (all of such property being hereinafter
collectively referred to as the "Collateral"), pursuant (i) to a Credit
Agreement (the "Credit Agreement") among Conn Appliances, Inc. and certain of
its affiliates and Lenders, (ii) to various security agreements and pledge
agreements such as the one contained in the Leasehold Mortgage, and (iii) to
certain financing statements and other documents filed in connection therewith
((i), (ii), and (iii) collectively the "Loan Documents"). Lessor has also been
informed that owners of a majority of the issued and outstanding equity
interests in and to Lessee (the "Equity Interests") have pledged or will pledge
such Equity Interests as security for the above referenced financings.
For Ten Dollars ($10.00) and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee
hereby represent, warrant, and agree, for the benefit of Lenders, as follows:
1. Notwithstanding any provisions to the contrary in the Lease, Lessor
hereby consents (i) to pledge of the Equity Interests, (ii) to the grant of the
Leasehold Mortgage on Lessee's interest in the Lease to the Agent for the
benefit of the Lenders (or to a trustee for the benefit of the Agent for the
benefit of the Lenders), and (iii) to the grant of the Security Interest in the
Collateral pursuant to the Loan Documents. Lessor hereby further consents to the
(x) recording of the Leasehold Mortgage against the Real Estate and (y) filing
of any and all financing statements or other documents executed by Lessee and
required or permitted under the Uniform Commercial Code of the State in which
the Real Estate is located in order to perfect the Leasehold Mortgage on
Lessee's interest in the Lease and the Security Interest in the Collateral. In
connection therewith, Lessor agrees to execute a memorandum or short form of the
Lease in recordable form and in such form as is reasonably required by Lenders
and is reasonably acceptable to Lessor.
2. Lessor and Lessee hereby agree as follows:
EXHIBIT C
(a) promptly upon default by Lessee under the Lease, Lessor shall give
to the Agent written notice of such default at the following address (or at such
alternative address as the Agent may have given Lessor by prior written notice):
JPMorgan Chase Bank
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attn:
----------------------
(b) after receipt of the notice of default described in subsection
2(a) hereof, Lenders shall have the right to remedy any default of Lessee under
the Lease, or to cause any default of Lessee under the Lease to be remedied, and
for such purpose the undersigned hereby grants Lenders thirty (30) days for
remedying, or causing to be remedied, any such default which is a non-monetary
default, or such longer period of time as may be needed to complete such
remedying (provided that Lender has commenced to remedy such default within such
thirty (30) days and continues diligent prosecution of such remedying and
completes such remedying not later than ninety (90) days after receipt of the
notice described above), and fifteen (15) days to Lessee for remedying, or
causing to be remedied, any such default which is a monetary default. Those
defaults which, by their very nature, may not be cured by Lenders (as, for
example, the bankruptcy of Lessee) shall not constitute grounds of enforcement
of rights, recourses, or remedies under the Lease by Lessor, including
termination of the Lease, if the Agent assumes the obligations of Lessee under
the Lease and brings any deficiencies current within thirty (30) days after
written notice to the Agent by Lessor of the occurrence of such a default.
Lessor shall not exercise any remedies under the Lease on account of a default
by Lessee, until the applicable grace periods described in this subsection 2(b)
have expired;
(c) Lessor shall accept performance by Lenders of any term, covenant,
condition or agreement to be performed by Lessee under the Lease with the same
force and effect as though performed by Lessee;
(d) no material amendment, modification, waiver or consent in respect
of any of the provisions of the Lease shall be effective unless Agent shall have
joined in such amendment, modification, waiver or consent or shall have given
its prior consent thereto. An amendment, modification, waiver or consent shall
be deemed to be material if (i) it increases the rental or other sums due under
the Lease, (ii) it decreases the term of the Lease or (iii) it can otherwise
reasonably be expected to have a material adverse effect on the Agent or the
holders of the indebtedness secured by the Leasehold Mortgage. The failure to
obtain the consent of the Agent to any nonmaterial amendment, modification,
waiver or consent shall not affect in any manner the effectiveness of such
nonmaterial amendment, modification, waiver or consent as between Lessor and
Lessee, but the same shall not be effective against the Agent or any assignee of
the Agent permitted hereunder. Agent shall not unreasonably withhold its consent
to any amendment, modification, waiver or consent.
(e) in the event of the termination of the Lease prior to the
expiration of its terms by reason of disaffirmance or rejection pursuant to any
bankruptcy law, the Agent shall have the option to obtain a new lease of the
Premises by giving notice to Lessor to such effect
EXHIBIT C
2
within thirty (30) days after such termination, so long as all sums which would
have at that time been due under the Lease but for such termination shall have
been paid and all other defaults, if any, under the Lease shall have been cured,
which new lease shall be (1) effective as of the date of termination of the
Lease, (2) for the remainder of the original term of the Lease (plus any renewal
terms), and (3) at the same rent and upon all of the agreements, terms,
covenants and conditions thereof;
(f) neither the Agent nor the designee or nominee of the Agent shall
become liable under the Lease unless and until the Agent or its designee or
nominee becomes, and then only for so long as the Agent or its designee or
nominee remains, the owner of the leasehold estate created thereby; and
(g) Lenders or their trustee or designee shall have the right, without
Lessor's consent, (i) to foreclose the Leasehold Mortgage or to accept
assignment of Lessee's interest in the Lease in lieu of foreclosure of the
Leasehold Mortgage; and (ii) to foreclose on the Equity Interests or to accept
assignment or endorsement of the Equity Interests, in lieu of foreclosure, or to
otherwise realize on its Security Interest in some or all of the Collateral. In
the event Lenders or their designee or nominee acquire Lessee's interest in the
Lease, either as a purchaser at any foreclosure sale or by reason of the
assignment of the Lease in lieu of foreclosure, Lenders or their designee or
nominee, as the case may be, shall have the right further to assign the Lease
only pursuant to the terms of the Lease.
3. All of the Collateral shall be and remain subject to the Leasehold
Mortgage and to the Security Interest until such time as the Leasehold Mortgage
and the Security Interest shall be released by the Agent.
4. Lessor hereby agrees that any lien for rent or similar charges, whether
arising by operation of law or otherwise, whether now existing or hereafter to
arise, and each and every right which Lessor now has or hereafter may have,
either to levy or distrain upon the Collateral or to claim or assert title to
the Collateral, or make any other claim against the Collateral, whether under
the Lease or the laws of the State in which the Real Estate is located, or under
any other applicable Federal, State, municipal or local law, ordinance or
otherwise, or under any mortgage now in effect or hereafter executed, whether by
reason of a default under the Lease or otherwise, shall be subject and
subordinate in every respect to all of the terms, provisions and conditions of
the Leasehold Mortgage and the Loan Documents and to the Security Interest in
the Collateral. Lenders and their agents and legal representatives (i) may
remove any or all of the Collateral located at the Real Estate from the Real
Estate (a) whenever Lenders, in their sole discretion, believe such removal is
necessary to protect the Security Interest in the Collateral; or (b) whenever
Lenders seek to sell or foreclose upon the Collateral; (ii) subject to the terms
and provisions of the Lease, shall have access to the Real Estate, the Premises,
and the Collateral at all times. Further, Lenders agree to indemnify and hold
Lessor harmless from any and all claims, damages, actions and causes of actions,
and costs and expenses incurred by Lessor as a result of Lenders' access to the
Premises and the removal of the Collateral therefrom.
5. Lessor hereby recognizes and acknowledges that any claim that Lenders
may now have or hereafter have against the Collateral is and at all times shall
be and shall be deemed to be
EXHIBIT C
3
superior to any lien, security interest or claim of any kind or nature
whatsoever which Lessor now has or hereafter may have against the Collateral,
whether by statute, the Lease or otherwise.
6. Lenders may, without affecting the validity of this Agreement, increase
the amount of, or extend the time of payment of, any indebtedness of Lessee to
Lenders or alter the performance of any of the terms and conditions of any
agreement between Lessee and Lenders, including, without limitation, the
Leasehold Mortgage and the Loan Documents, without the consent of, or notice to,
Lessor and without in any manner whatsoever impairing or affecting the Leasehold
Mortgage or the Security Interest in the Collateral.
7. Lessor represents, warrants and agrees that, as of the date hereof (i)
the Lease is in full force and effect; (ii) a true and complete copy of the
Lease is annexed hereto as Exhibit "B"; (iii) the Lease has not been modified,
supplemented or amended in any way whatsoever except as indicated herein or in
Exhibit "B"; (iv)(a) the monthly rent presently payable under the terms of the
Lease is $ and (b) no rent or other amounts payable by Lessee in
-------------
addition to the base or fixed monthly rent (including, without limitation,
taxes, maintenance, operating expenses or otherwise) payable under the terms of
the Lease have been paid in since the Lease has not commenced; (v) Lessor has
not delivered or received any notices of default under the Lease and there are
no defaults under the Lease and no event has occurred which, with the giving of
notice or the lapse of time, or both, would constitute a default under the
Lease; (vi) no security deposit is presently held by Lessor under the Lease;
(vii) Lessor has obtained all the consents or approvals of any party necessary
or desirable to effectuate the terms of this Agreement; and (vii) to the best of
Lessor's knowledge, no mortgagee or holder of a lien on the Real Estate has any
security interest in the Collateral owned by Lessee now located or hereafter to
be located on any portion of the Premises.
8. The rights of Lenders under this Agreement are in addition to, and
cumulative of, any rights granted to, or for the benefit of, Lenders under the
terms of the Lease. This Agreement shall inure to the benefit of Lenders and
their successors and assigns and shall be binding upon the heirs, personal
representatives, successors and assigns of Lessor and Lessee.
EXHIBIT C
4
IN WITNESS WHEREOF, Lessor and Lessee have caused this Agreement to be duly
executed as of this day of , 20
--------------- -------------- ---
Lessor:
----------------------------------------
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Lessee:
----------------------------------------
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
EXHIBIT C
5
EXHIBIT A
Description of the Real Estate
on which the Premises are Located
EXHIBIT C
EXHIBIT B
Attach Copy of the Lease
and All Amendments, Modifications, and Extensions
EXHIBIT C
EXHIBIT C
Collateral
l. Equity Interests in and to Lessee; and
2. All of Lessee's right, title and interest in all fixtures, equipment,
inventory, contract rights, goods, condemnation proceeds, insurance
policies and other general intangibles (including but not limited to
trademarks, trade names, and symbols), deposits, instruments and documents,
and all other personal property of every kind and character, now owned or
hereafter acquired by Lessee, which are now or hereafter attached to, used
in connection with, or situated in, on, or about the Premises or the
improvements located on the Premises or related to Lessee's rights in and
to the Lease, and all proceeds and products thereof.
EXHIBIT C
EXHIBIT D
FORM OF
REQUEST FOR BORROWING
Borrower Issuing Request: [____________________________________]
The undersigned hereby certifies that he is the Chief Executive Officer or
the Chief Financial Officer of [Borrower], a corporation organized under the
laws of [State of Incorporation] (the "Borrower"), and that as such he is
authorized to execute this Request for Borrowing on behalf of the Borrower. With
reference to that certain Credit Agreement dated as of ,
---------------------
2003 (as same may be amended, modified, increased, supplemented and/or restated
from time to time, the "Credit Agreement"), entered into by and among the
Borrower, the other Borrowers, Bank of America, N.A., individually and as
Documentation Agent, and JPMorgan Chase Bank, individually and as Administrative
Agent (the "Agent") for itself and the other banks and financial institutions
that are or may become a party thereto as Lender (collectively, the "Lenders"),
the undersigned further certifies, represents and warrants on behalf of the
Borrower that to his best knowledge and belief after reasonable and due
investigation and review, all of the following statements are true and correct
(each capitalized term used herein having the same meaning given to it in the
Credit Agreement unless otherwise specified):
(a) [In the case of a request for a Revolving Borrowing] All of the
statements and calculations set forth in the most recent Borrowing Base Report
provided to the Lenders and dated as of , 20 , were true and
-------------- ------
correct as of the date thereof, and there has been no material reduction in the
Borrowing Base since the date of such Borrowing Base Report. In accordance with
the terms of the Credit Agreement, as evidenced by such Borrowing Base Report,
the maximum aggregate outstanding amount of Revolving Loans for which the
Borrower was eligible as of the date of such Borrowing Base Report was
$ .
-------------------
(b) The Borrower requests that each Lender advance to the Borrower its Pro
Rata Percentage of the aggregate sum of $ by no later
---------------------
than , 20 . Immediately following such Revolving
------------------- -----
Borrowings, the aggregate outstanding balance of the Revolving Loans shall equal
$ .
------------------
(c) The Type and amount of, and, in the case of any Eurodollar Borrowings
to be made hereunder, the Rate Period applicable to, the Loans comprising the
borrowing to be made hereunder are:
Eurodollar Borrowings in an aggregate amount of $ with a
------------
Rate Period of:
one (1) month
-------------
two (2) months
-------------
three (3) months
-------------
six (6) months
-------------
ABR Borrowings in an aggregate amount of $ .
------------------
(d) The representations and warranties contained in the Loan Documents are
true and correct as of the date hereof and shall be true and correct upon the
making of the requested Loans, with the same force and effect as though made on
and as of the date hereof and thereof.
(e) No Event of Default or Default has occurred and is continuing.
(f) As of the date hereof, the business and operations of the Borrower, the
other Loan Parties and each of their Subsidiaries as conducted at all times
relevant to the transactions contemplated by the Credit Agreement to and
including the close of business on the Borrowing Date, have been and shall be in
compliance with all applicable State and Federal governmental requirements
affecting the Borrower, the other Loan Parties and each of their Subsidiaries
and the business and operations of any of them.
EXECUTED AND DELIVERED this day of , 20 .
------- --------------- ----
[BORROWER]
By:
-------------------------------------
Name:
-----------------------------------
Title: Chief Executive Officer /
Chief Financial Officer
2
EXHIBIT E
FORM OF
INTEREST ELECTION REQUEST
Borrower Issuing Request: [__________________________________________]
The undersigned hereby certifies that he is the Chief Executive Officer or
the Chief Financial Officer of [Borrower Issuing Request], a corporation
organized under the laws of [State of Incorporation] (the "Requesting Borrower")
and that as such he is authorized to execute this Interest Election Request on
behalf of the Requesting Borrower. With reference to that certain Credit
Agreement dated as of , 2003 (as the same may be amended, modified,
------
increased, supplemented and/or restated from time to time, the "Credit
Agreement"), entered into by and among Conn Appliances, Inc. and certain related
entities, as borrowers (each a "Borrower" and collectively the "Borrowers"),
JPMorgan Chase Bank, as a Lender and as Administrative Agent, Bank of America,
N.A., as a Lender and as Documentation Agent, and the Lenders on the signature
pages thereto, the undersigned further certifies, represents and warrants on
behalf of the Requesting Borrower that to his best knowledge and belief after
reasonable and due investigation and review, all of the following statements are
true and correct (each capitalized term used herein having the same meaning
given to it in the Credit Agreement unless otherwise specified).
(a) Pursuant to Section 2.06 of the Credit Agreement, this Interest
Election Request (the "Request") represents the Requesting Borrower's election
of [insert one or more of the following]:
[1. Use if converting Eurodollar Borrowings to ABR Borrowings.
Convert $ in aggregate principal amount of
------------------
Eurodollar Borrowings with a current Interest Period ending
on , 20 , to ABR Borrowings on ,20 ;
--------------- -- ---------------- --
and]
[2. Use if converting ABR Borrowings to Eurodollar Borrowings.
Convert $ in aggregate principal amount of ABR
------------------
Borrowings to Eurodollar Borrowings on , 20 . The initial
---------- ----
Interest Period for such Eurodollar Borrowings is requested to be a
[one] [two] [three] [six] (_____) month period.]
[3. Use if continuing the balance as Eurodollar Borrowings.
Continue $ in aggregate principal amount of
------------------
Eurodollar Borrowings with a current Interest Period ending
on , 20 , to a new Interest Period commencing
----------------------- ---
on , 20 , and ending
---------------------------- ---
on , 20 .] [If multiple new Interest Periods
------------------- ----
are selected, revise accordingly.]
(b) The representations and warranties contained in the Loan Documents are
true and correct as of the date hereof and shall be true and correct upon the
making of the requested conversion/continuation, with the same force and effect
as though made on and as of the date hereof and thereof.
(c) No Event of Default or Default has occurred and is continuing.
(d) As of the date hereof, the business and operations of the Requesting
Borrower, the other Loan Parties and each of their Subsidiaries as conducted as
all times relevant to the transactions contemplated by the Credit Agreement to
and including the close of business on the date of the requested
conversion/continuation, have been and shall be in compliance with all
applicable State and Federal governmental requirements affecting the Requesting
Borrower, the other Loan Parties and each of their Subsidiaries and the business
and operations of any of them.
EXECUTED AND DELIVERED this day of , 20 .
-------- ------------------- ------
[REQUESTING BORROWER]
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
2
TERM NOTE
$ , 200
--------------- ------------------ -----
FOR VALUE RECEIVED, the undersigned (collectively, the "Borrowers"), HEREBY
PROMISE TO PAY to the order of (the "Lender") the
---------------------------
principal sum of Dollars
------- ---------------------------
($ ) or the aggregate principal amount of the Term Loans
----------------------
made to each of the several Borrowers pursuant to this Term Note and outstanding
as of the maturity hereof, whichever is lesser, in accordance with the terms and
provisions of that certain Credit Agreement dated as of ,
--------------------
2003, by and among the Borrowers, the Lender, Bank of America, N.A.,
individually and as Documentation Agent, and JPMorgan Chase Bank, as
Administrative Agent (the "Agent") for itself and the other banks or financial
institutions (collectively, the "Lenders") that may hereafter become a party to
the hereinafter defined Credit Agreement (such agreement, together with any and
all amendments and modifications thereof, being hereinafter referred to as the
"Credit Agreement"; capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit Agreement).
The obligations of the Borrowers hereunder shall be joint and several.
The outstanding principal balance of this Term Note shall be due and
payable in installments as provided in the Credit Agreement. Each Borrower
promises to pay interest on the unpaid principal balance of this Term Note from
the date of any Term Loan evidenced by this Term Note until the principal
balance hereof is paid in full. Interest shall accrue on the outstanding
principal balance of this Term Note from and including the date of any Term Loan
evidenced by this Term Note to but not including the Maturity Date at the rate
or rates, and shall be due and payable on the dates, set forth in the Credit
Agreement. Any amount not paid when due with respect to principal (whether at
stated maturity, by acceleration or otherwise), costs or expenses, or, to the
extent permitted by applicable law, interest, shall bear interest from the date
when due to and excluding the date the same is paid in full, payable on demand,
at the rate provided for in Section 2.11(c) of the Credit Agreement.
Payments of principal and interest, and all amounts due with respect to
costs and expenses, shall be made in lawful money of the United States of
America in immediately available funds, without deduction, set-off or
counterclaim to the Agent for the account of the Lender not later than 10:00
a.m. (Houston time) on the dates on which such payments shall become due
pursuant to the terms and provisions set forth in the Credit Agreement.
If any payment of principal or interest on this Term Note shall become due
on a Saturday, Sunday, or public holiday on which the Lender is not open for
business, such payment shall be made on the next succeeding Business Day and
such extension of time shall in such case be included in computing interest in
connection with such payment.
EXHIBIT F
In addition to all principal and accrued interest on this Term Note, each
Borrower agrees to pay (a) all reasonable costs and expenses incurred by all
owners and holders of this Term Note in collecting this Term Note through any
probate, reorganization, bankruptcy or any other proceeding and (b) reasonable
attorneys' fees when and if this Term Note is placed in the hands of an attorney
for collection after default.
All agreements between the Borrowers, the Lenders or the Agent whether now
existing or hereafter arising and whether written or oral, are hereby expressly
limited so that in no contingency or event whatsoever, whether by reason of
demand being made on this Term Note or otherwise, shall the amount paid, or
agreed to be paid, to the Lenders or the Agent for the use, forbearance, or
detention of the money to be loaned under the Credit Agreement and evidenced by
this Term Note or otherwise or for the payment or performance of any covenant or
obligation contained in the Credit Agreement, this Term Note or in any other
Loan Document exceed the Highest Lawful Rate. If, as a result of any
circumstances whatsoever, fulfillment of any provision hereof or of any of such
documents, at the time performance of such provision shall be due, shall involve
transcending the limit of validity prescribed by applicable usury law, then,
ipso facto, the obligation to be fulfilled shall be reduced to the limit of such
validity, and if, from any such circumstance, the Lender shall ever receive
interest or anything which might be deemed interest under applicable law which
would exceed the Highest Lawful Rate, such amount which would be excessive
interest shall be applied to the reduction of the principal amount owing on
account of this Term Note or the amounts owing on other obligations of the
Borrowers to the Lenders and the Agent under any Loan Document and not to the
payment of interest, or if such excessive interest exceeds the unpaid principal
balance of this Term Note and the amounts owing on other obligations of the
Borrowers to the Lenders or the Agent under any Loan Documents, as the case may
be, such excess shall be refunded to the Borrowers. In determining whether or
not the interest paid or payable under any specific contingencies exceeds the
Highest Lawful Rate, each applicable Borrower and the Lender shall, to the
maximum extent permitted under applicable law, (a) characterize any nonprincipal
payment as an expense, fee or premium rather than as interest; (b) exclude
voluntary prepayments and the effects thereof; and (c) amortize, prorate,
allocate and spread, during the period of the full stated term of this Term
Note, all interest at any time contracted for, charged, received or reserved in
connection with the indebtedness evidenced by this Term Note.
This Term Note is one of the Notes provided for in, and is entitled to the
benefits of the Credit Agreement, which Credit Agreement, among other things,
contains provisions for acceleration of the maturity hereof upon the happening
of certain stated events, for prepayments on account of principal hereof prior
to the maturity hereof upon the terms and conditions and with the effect therein
specified, and provisions to the effect that no provision of the Credit
Agreement or this Term Note shall require the payment or permit the collection
of interest in excess of the Highest Lawful Rate. The obligations of the
Borrowers hereunder are secured by the Security Documents executed by the
respective Borrowers and the other Loan Parties.
Except as otherwise specifically provided for in the Credit Agreement, each
Borrower and any and all endorsers, guarantors and sureties severally waive
grace, demand, presentment
EXHIBIT F
2
for payment, notice of dishonor or default, protest, notice of protest, notice
of intent to accelerate, notice of acceleration and diligence in collecting and
bringing of suit against any party hereto, and agree to all renewals, extensions
or partial payments hereon, with or without notice, before or after maturity.
THIS TERM NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW.
IN WITNESS WHEREOF, each Borrower has caused this Term Note to be executed
and delivered by its officer thereunto duly authorized effective as of the date
first above written.
CONN APPLIANCES, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
CAI CREDIT INSURANCE AGENCY, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
EXHIBIT F
3
REVOLVING NOTE
$ , 200
-------------------- ------------- ---
FOR VALUE RECEIVED, the undersigned (collectively, the "Borrowers"), HEREBY
PROMISE TO PAY to the order of (the
-----------------------------------------
"Lender") the principal sum of Dollars
----------------------------------------
($ ), or the aggregate principal amount of Revolving Loans
----------------------
made to each of the several Borrowers pursuant to this Revolving Note and
outstanding as of the maturity hereof, whichever is lesser, in accordance with
the terms and provisions of that certain Credit Agreement dated as
of , 2003, by and among the Borrowers, the Lender, Bank
-----------------------
of America, N.A., individually and as Documentation Agent, and JPMorgan Chase
Bank, as Administrative Agent (the "Agent") for itself and the other banks or
financial institutions (collectively, the "Lenders") that may hereafter become a
party to the hereinafter defined Credit Agreement (such agreement, together with
any and all amendments and modifications thereof, being hereinafter referred to
as the "Credit Agreement"; capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in the Credit
Agreement).
The obligations of the Borrowers hereunder shall be joint and several.
The outstanding principal balance of this Revolving Note shall be due and
payable as provided in the Credit Agreement. Each Borrower promises to pay
interest on the unpaid principal balance of this Revolving Note from the date of
any Revolving Loan evidenced by this Revolving Note until the principal balance
hereof is paid in full. Interest shall accrue on the outstanding principal
balance of this Revolving Note from and including the date of any Revolving Loan
evidenced by this Revolving Note to but not including the Maturity Date at the
rate or rates, and shall be due and payable on the dates, set forth in the
Credit Agreement. Any amount not paid when due with respect to principal
(whether at stated maturity, by acceleration or otherwise), costs or expenses,
or, to the extent permitted by applicable law, interest, shall bear interest
from the date when due to and excluding the date the same is paid in full,
payable on demand, at the rate provided for in Section 2.11(c) of the Credit
Agreement.
Payments of principal and interest, and all amounts due with respect to
costs and expenses, shall be made in lawful money of the United States of
America in immediately available funds, without deduction, set-off or
counterclaim to the Agent for the account of the Lender not later than 10:00
a.m. (Houston time) on the dates on which such payments shall become due
pursuant to the terms and provisions set forth in the Credit Agreement.
If any payment of principal or interest on this Revolving Note shall become
due on a Saturday, Sunday, or public holiday on which the Lender is not open for
business, such payment shall be made on the next succeeding Business Day and
such extension of time shall in such case be included in computing interest in
connection with such payment.
EXHIBIT G
In addition to all principal and accrued interest on this Revolving Note,
each Borrower agrees to pay (a) all reasonable costs and expenses incurred by
all owners and holders of this Revolving Note in collecting this Revolving Note
through any probate, reorganization, bankruptcy or any other proceeding and (b)
reasonable attorneys' fees when and if this Revolving Note is placed in the
hands of an attorney for collection after default.
All agreements between the Borrowers, the Lenders or the Agent whether now
existing or hereafter arising and whether written or oral, are hereby expressly
limited so that in no contingency or event whatsoever, whether by reason of
demand being made on this Revolving Note or otherwise, shall the amount paid, or
agreed to be paid, to the Lenders or the Agent for the use, forbearance, or
detention of the money to be loaned under the Credit Agreement and evidenced by
this Revolving Note or otherwise or for the payment or performance of any
covenant or obligation contained in the Credit Agreement, this Revolving Note or
in any other Loan Document exceed the Highest Lawful Rate. If, as a result of
any circumstances whatsoever, fulfillment of any provision hereof or of any of
such documents, at the time performance of such provision shall be due, shall
involve transcending the limit of validity prescribed by applicable usury law,
then, ipso facto, the obligation to be fulfilled shall be reduced to the limit
of such validity, and if, from any such circumstance, the Lender shall ever
receive interest or anything which might be deemed interest under applicable law
which would exceed the Highest Lawful Rate, such amount which would be excessive
interest shall be applied to the reduction of the principal amount owing on
account of this Revolving Note or the amounts owing on other obligations of the
Borrowers to the Lenders and the Agent under any Loan Document and not to the
payment of interest, or if such excessive interest exceeds the unpaid principal
balance of this Revolving Note and the amounts owing on other obligations of the
Borrowers to the Lenders or the Agent under any Loan Documents, as the case may
be, such excess shall be refunded to the Borrowers. In determining whether or
not the interest paid or payable under any specific contingencies exceeds the
Highest Lawful Rate, each applicable Borrower and the Lender shall, to the
maximum extent permitted under applicable law, (a) characterize any nonprincipal
payment as an expense, fee or premium rather than as interest; (b) exclude
voluntary prepayments and the effects thereof; and (c) amortize, prorate,
allocate and spread, during the period of the full stated term of this Revolving
Note, all interest at any time contracted for, charged, received or reserved in
connection with the indebtedness evidenced by this Revolving Note.
This Revolving Note is one of the Notes provided for in, and is entitled to
the benefits of the Credit Agreement, which Credit Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events, for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions and with the
effect therein specified, and provisions to the effect that no provision of the
Credit Agreement or this Revolving Note shall require the payment or permit the
collection of interest in excess of the Highest Lawful Rate. The obligations of
the Borrowers hereunder are secured by the Security Documents executed by the
respective Borrowers and the other Loan Parties. It is contemplated that by
reason of prepayments or repayments hereon prior to the Maturity Date, there may
be times when no indebtedness is owing hereunder prior to such date, but
EXHIBIT G
2
notwithstanding such occurrences, this Revolving Note shall remain valid and
shall be in full force and effect as to Revolving Loans made pursuant to the
Credit Agreement subsequent to each such occurrence.
Except as otherwise specifically provided for in the Credit Agreement, each
Borrower and any and all endorsers, guarantors and sureties severally waive
grace, demand, presentment for payment, notice of dishonor or default, protest,
notice of protest, notice of intent to accelerate, notice of acceleration and
diligence in collecting and bringing of suit against any party hereto, and agree
to all renewals, extensions or partial payments hereon, with or without notice,
before or after maturity.
THIS REVOLVING NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW.
IN WITNESS WHEREOF, each Borrower has caused this Revolving Note to be
executed and delivered by its officer thereunto duly authorized effective as of
the date first above written.
CONN APPLIANCES, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
CAI CREDIT INSURANCE AGENCY, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
EXHIBIT G
3
COMPLIANCE CERTIFICATE
The undersigned hereby certifies that he or she is the
--------------------
of CONN APPLIANCES, INC. (the "Borrower"), and that as such he or she is
authorized to execute this certificate on behalf of the Borrower pursuant to the
Credit Agreement (the "Agreement") dated as of , 2003, by and among
-------------
Borrower and certain of its affiliates, JPMORGAN CHASE BANK, as Administrative
Agent, and the lenders therein named; and that a review of the Borrower and its
Subsidiaries has been made under his or her supervision with a view to
determining whether the Borrower and its Subsidiaries have fulfilled all of
their respective obligations under the Agreement, the Notes and the other Loan
Documents; and on behalf of the Borrower further certifies, represents and
warrants that to his or her knowledge (each capitalized term used herein having
the same meaning given to it in the Agreement unless otherwise specified):
(a) The financial statements delivered to the Administrative Agent
concurrently with this Compliance Certificate have been prepared in accordance
with GAAP consistently followed throughout the period indicated and fairly
present the financial condition and results of operations of the applicable
Persons as at the end of, and for, the period indicated (subject, in the case of
quarterly financial statements, to normal changes resulting from year-end
adjustments and the absence of certain footnotes).
(b) No Default or Event of Default has occurred and is continuing. In
this regard, the compliance with the provisions of Sections 6.18 through 6.22 as
the effective date of the financial statements delivered to the Administrative
Agent concurrently with this Compliance Certificate is as follows (detailed
calculations are provided on Schedule I attached hereto):
(i) Section 6.18 - Debt Service Coverage Ratio
Actual Required
------ --------
to 1.00 to 1.00
-------- --------
(ii) Section 6.19 - Total Leverage Ratio
Actual Required
------ --------
to 1.00 to 1.00
-------- --------
EXHIBIT H
(iii) Section 6.20 - Consolidated Net Worth
Actual Required
------ --------
$ $
---------- ----------
(iii) Section 6.21(a) - Charge-Off Ratio
Actual Required
------ --------
to 1.00 to 1.00
-------- --------
(iii) Section 6.21(b), - Extension Ratio
Actual Required
------ --------
to 1.00 to 1.00
-------- --------
(iii) Section 6.21(c) - Delinquency Ratio
Actual Required
------ --------
to 1.00 to 1.00
-------- --------
(iv) Section 6.22. -- Capital Expenditures
Actual Maximum Permitted
------ -----------------
$ $
---------- ---------------
(c) There has been no change in GAAP or in the application thereof
since the effective date of the Agreement which would reasonably be expected to
affect the calculation of the financial covenants set forth in the Agreement or,
if any such change has occurred, the effects of such change on the financial
statements of Borrower are specified on an attachment hereto.
EXHIBIT H
2
(d) Since the date of the Agreement, no event has occurred which would
be reasonably likely to have a Material Adverse Effect.
DATED as of , 200 .
-------------- ---
---------------------------------
[SIGNATURE OF AUTHORIZED OFFICER]
EXHIBIT H
3
1. Section 6.18 - Debt Service Coverage Ratio
Twelve Months Ending
-------------
Consolidated Net Income
Plus(Minus): Consolidated Interest Expense
----------
Consolidated Depreciation @ Amortization
----------
Consoldated Income Taxes
----------
Consolidated Extra-Ordinary (Gains) or Losses
----------
Consolidated Non Cash (Income) or Expense - FAS 125/140
----------
Non Cash (Income) or Expense - FAS 133
==========
(A) Consolidated EBITDA
----------
Plus: Consolidated Rent Expense
----------
Less: Consolidated Capital Expenditures
----------
==========
(B) Consolidated EBITDA plus Consolidated Rent Expense - CAPEX
(numerator)
==========
Divided By:
Consolidated Cash Interest Expense
----------
Plus (Minus): FAS 133 - Consolidated Non Cash Interest Expense
----------
Plus: Consolidated Rent Expense
==========
(C) Total Cash Interest plus Rent Expense (denominator)
----------
(B)/(C) Debt Service Coverage Ratio
----------
Minimum
----------
2. Section 6.19 - Total Leverage Ratio
Total Debt and Loan Guaranties (See Attached Exhibit A)
----------
Eight (8) times LTM consolidated rent/lease expense X 8
------------- ==========
(A) Total Implied Debt (numerator)
----------
Consolidated LTM EBITDA
----------
Plus: LTM Consolidated Rent Expense
==========
(B) Consolidated EBITDA plus Consolidated Rent Expense (denominator)
----------
(A)/(B) Total Leverage Ratio
----------
Maximum
----------
Schedule I
3. Section 6.20 - Consolidated Net Worth
Net Worth as of 04/30/02 65,791,544
Equity, Ownership or Profit Interest Securities and Convertible into Same Issued
----------
Cumulative Net Income Through Most Recent Quarter End (commencing of May 1, 2002)
----------
Calculation
Base amount 55,000,000
Plus: 75 % of cumulative Net Income Since May 1, 2002
----------
100 % of Equity, Ownership and Profit Securities Issued
==========
(A) Required Net Worth
----------
Most Recent Quarter End - Consolidated Net Worth
----------
Plus: FAS 133 Other Comprehensive Income (Change in GAAP )
----------
FAS 125/140 (Gains)/Losses Tax Rate 36.00%
---------- ==========
(B) Consolidated Net Worth (Adjusted)
----------
(B)-(A) Excess over required (Deficit)
----------
4. Section 6.21 - Extensions, Delinquencies, Charge-Offs
a) Average Quarterly Charge-off Ratio Maximum Ratio is .05
--------------
CCC OFC Total CCC* OFC* Total*
Charge-Offs Charge-Offs Charge-Offs Balance Balance Balance
---------------------------------------------------------------------------
month/year X X
month/year X X
month/year X X
---------------------------------------------------------------------------
Three Month Average x 4 X X
---------------------------------------------------------------------------
Annualized Amounts
---------------------------------------
Annualized Ratios
---------------------------------------
b) Average Extention Ratio Maximum Ratio = .04
--------------
CCC OFC Total CCC* OFC* Total*
Extensions Extensions Extensions IL Balance IL Balance Balance
---------------------------------------------------------------------------
month/year X X
month/year X X
month/year X X
---------------------------------------------------------------------------
Three Month Average X X
---------------------------------------------------------------------------
Three Month Ratios
---------------------------------------
c) Averge Delinquency Rate (31 Days or More) Maximum Ratio = .12
--------------
CCC OFC Total CCC* OFC* Total*
Delinquency Delinquency Delinquency Balance Balance Balance
---------------------------------------------------------------------------
month/year X X X X
month/year X X X X
month/year X X X X
---------------------------------------------------------------------------
Three Month Average X X X X
---------------------------------------------------------------------------
Three Month Ratios
---------------------------------------
* Consistent with historical reporting amount includes unearned
interest and excludes accounts in bankruptcy.
Schedule I
5. Section 6.22 - Capital Expenditures
(A) Capital Expenditures Fiscal Year to Date
----------
(B) Maximum
----------
(A)-(B) Excess (Deficit)
----------
Schedule I
