EXHIBIT 10.24
FOURTH AMENDED AND RESTATED
SUBORDINATION AND PRIORITY AGREEMENT
WHEREAS, BANK OF AMERICA, N.A. ("BOA") and JPMORGAN CHASE BANK, as Agent
("CB") (BOA, CB, and the other Lenders (as defined in the Loan Agreement) now or
hereinafter a party to that certain Credit Agreement dated as of October 31,
2005, as amended or restated, the "Loan Agreement"), have filed or intend to
file Uniform Commercial Code financing statements perfecting, and giving notice
of, a security interest in all or some of the property, including but not
limited to, inventory and equipment, chattel paper, contract rights, accounts or
general intangibles of Conn Appliances, Inc., and/or its subsidiary CAI, L.P.
(collectively, "Debtor"), and the proceeds thereof to the extent allowed;
WHEREAS, BOA has agreed to provide Debtor with a secured and uncommitted
import letter of credit line of up to $10,000,000 in the aggregate to
accommodate Debtor's importation of inventory purchases into North America (the
"Import Letter of Credit Line"), and pursuant to such credit facility, Debtor
will execute and deliver from time to time, BOA's form letter of credit
agreement and such other related documents as from time to time in effect in
connection therewith;
WHEREAS, as security for the indebtedness and obligations under the Import
Letter of Credit Line and all renewals and extensions thereof, Debtor has agreed
to execute and deliver to BOA a Third Amended and Restated Security Agreement
covering the inventory purchased by Debtor from the parties listed on attached
Schedule 1 (as Schedule 1 may be amended from time to time as set out in
paragraph number 1 below) with credit support provided by the Import Letter of
Credit Line, together with all products and proceeds thereof (collectively, the
"Prime Collateral"); and
WHEREAS, the parties hereto desire to avoid possible conflicting security
interests, and the priority thereof, arising from the filing of their respective
financing statements under each of the Loan Agreement and the Import Letter of
Credit Line.
NOW, THEREFORE, the parties hereto agree as follows:
1. The Banks hereby (a) consent to Debtor's indebtedness incurred, and the
liens granted on the Prime Collateral granted in favor of BOA, in
connection with the Import Letter of Credit Line, and (b) subordinate their
security interests and liens under the Loan Agreement to the security
interests and liens of BOA under the Import Letter of Credit Line in (i)
the Prime Collateral, whether now owned or acquired in the future by
Debtor, (ii) all proceeds of insurance thereon, and (iii) all identifiable
cash proceeds in the form of money and checks received by any Debtor with
respect thereto which are not commingled with other property of any Debtor;
provided, however, that under no circumstances shall the Prime Collateral
include (x) Purchased Receivables, Related Security, Receivable Files, or
Originator Notes as each is defined in the Receivables Purchase Agreement
dated as of September 1, 2002, between Conn Appliances, Inc., CAI, L.P.,
and Conn Funding I, L.P., as sellers, and Conn Funding II, L.P., as
purchaser, or any products or proceeds thereof; or (y) Transferred Assets
as defined in the Agreement of Sale dated as of January 24, 2001, by and
between Conn Appliances, Inc. and CAI, L.P., as sellers, and Xxxxx Rents,
as purchaser. All terms used and not otherwise defined herein, which are
defined in Article 9 of the Texas Uniform Commercial Code, shall have the
meanings assigned to them in Article 9 of the Texas Uniform Commercial
Code, as in effect on the date of the filing of any financing statement.
Notwithstanding anything to the contrary herein, Debtor, BOA, CB and the
Banks hereby agree that Debtor may from time to time update the list of
counterparties on Schedule 1 attached hereto by delivering a revised
Schedule 1 to BOA and CB, and, upon the execution of such revised Schedule
1 by BOA and CB, the then current Schedule 1 shall automatically be
replaced in its entirety by such revised Schedule 1.
2. BOA hereby agrees that it shall not at any time during the terms of this
Agreement have a security interest, lien, claim or any type of encumbrance
whatsoever, at law, in equity or by contract, on any property or assets of
any Debtor other than a security interest in the Prime Collateral. To the
extent BOA shall now or hereafter have any security interest, lien, claim
or other encumbrance prohibited by the foregoing sentence, the same is
hereby released and discharged.
3. No party, including without limitation the Debtor, is intended to be a
third party beneficiary of this Agreement. This Agreement shall not
constitute a purchase money security interest notice.
4. Whenever either party hereto shall be required or shall have the right to
give notice to the other party, such notice shall be deemed to have been
given five (5) days after mailing, postage prepaid, by registered or
certified mail, return receipt requested, or upon personal delivery to the
other party at the following address, or such other address as is furnished
in writing by one party to another party:
To:
JPMorgan Chase Bank Bank of America, N.A.
000 Xxxx Xxxxxx, 0xx Xxxxx 000 Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
Attn: Manager Houston Commercial Attn: Xxxx Xxxxxx
5. This agreement is irrevocable by the parties hereto and shall remain in
full force and effect until the earlier of (a) the repayment in full of all
the obligations of the Debtor to the Banks under the Loan Agreement and (b)
the repayment in full of all of the obligations of the Debtor to BOA under
the Import Letter of Credit Line.
6. CB, the Banks and BOA agree this Agreement shall be binding upon and inure
to the benefit of their respective successors and assigns, and shall be
governed by and construed in accordance with the laws of the State of
Texas.
7. This Agreement amends and restates that certain Third Amended and Restated
Subordination and Priority Agreement dated as of June 14, 2006, among BOA,
CB, and Debtor (the "Third Amended and Restated Subordination Agreement"),
as such Third Amended and Restated Subordination and Priority Agreement
amended and restated that certain Second Amended and Restated Subordination
and Priority Agreement dated as of July 11, 2005, among BOA, CB, and Debtor
(the "Second Amended and Restated Subordination Agreement"), as such Second
Amended and Restated Subordination Agreement amended and restated that
certain First Amended and Restated Subordination and Priority Agreement
dated as of June 17, 2004, among BOA, CB, and Debtor (the "First Amended
and Restated Subordination Agreement"), as such First Amended and Restated
Subordination Agreement amended and restated that certain Subordination and
Priority Agreement dated as of March 20, 2003, among BOA, CB, and Debtor
(the "Initial Subordination Agreement"), and shall not be construed to be a
novation of the Third Amended and Restated Subordination Agreement, the
Second Amended and Restated Subordination Agreement, the First Amended and
Restated Subordination Agreement, or the Initial Subordination Agreement.
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IN WITNESS WHEREOF the parties hereto have this 31st day of August 2006,
hereunto have set their hands.
BANK OF AMERICA, N.A.
By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx, Senior Vice President
JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, AS AGENT FOR THE LENDERS
By: /s/ R. Xxxxxxx Xxxxxx
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R. Xxxxxxx Xxxxxx, Vice President
Acknowledged and Consented to:
CONN APPLIANCES, INC.
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, Treasurer
CAI, L.P.
By: Conn Appliances, Inc., its sole
general partner
By: /s/ Xxxxx X. Xxxxx
----------------------------------
Xxxxx X. Xxxxx, Treasurer
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