<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________ to _______________
Commission File Number 1-9733
CASH AMERICA INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
TEXAS 75-2018239
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
1600 WEST 7TH STREET
FORT WORTH, TEXAS 76102
(Address of principal executive offices) (Zip Code)
(817) 335-1100
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
28,759,401 common shares, $.10 par value, were outstanding as of August 12, 1996
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<PAGE> 2
CASH AMERICA INTERNATIONAL, INC.
INDEX TO 10-Q
<TABLE>
<CAPTION>
PART I. FINANCIAL STATEMENTS
Page
<S> <C>
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets - June 30, 1996
and 1995, and December 31, 1995................................................... 1
Consolidated Statements of Income - Three Months and
Six Months Ended June 30, 1996 and 1995........................................... 2
Consolidated Statements of Stockholders' Equity -
Six Months Ended June 30, 1996 and 1995........................................... 3
Consolidated Statements of Cash Flows -
Six Months Ended June 30, 1996 and 1995........................................... 4
Notes to Consolidated Financial Statements........................................ 5
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations......................... 8
PART II. OTHER INFORMATION............................................................. 18
SIGNATURE............................................................................... 20
</TABLE>
<PAGE> 3
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands) (UNAUDITED)
<TABLE>
<CAPTION>
==================================================================================================================================
June 30 Dec 31
1996 1995 1995
-------- -------- --------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,092 $ 5,807 $ 3,435
Service charges receivable 12,492 10,776 11,829
Loans 95,125 78,941 87,782
Inventory, net 47,617 56,733 56,647
Prepaid expenses and other 4,804 5,314 4,823
Deferred tax asset 10,912 12,323 12,710
-------- -------- --------
Total current assets 173,042 169,894 177,226
Property and equipment, net 61,896 67,042 64,987
Intangible assets, net 62,199 64,879 63,421
Other assets 10,185 8,165 8,473
-------- -------- --------
Total assets $307,322 $309,980 $314,107
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 8,659 $ 5,895 $ 9,584
Customer layaway deposits 3,843 4,243 3,524
Income taxes currently payable 432 4,601 2,585
Current portion of long-term debt 4,286 0 0
-------- -------- --------
Total current liabilities 17,220 14,739 15,693
Long-term debt:
Bank lines of credit 63,914 95,535 73,462
Notes payable, net of current portion 45,714 30,000 50,000
-------- -------- --------
109,628 125,535 123,462
Stockholders' equity:
Common stock, $.10 par value per
share, 80,000,000 shares authorized 3,024 3,024 3,024
Paid in surplus 121,878 121,576 121,840
Retained earnings 66,988 55,369 61,727
Notes receivable - stockholders (1,056) 0 (1,071)
Foreign currency translation adjustment (3,713) (2,969) (3,834)
-------- -------- --------
187,121 177,000 181,686
Less - shares held in treasury, at cost (6,647) (7,294) (6,734)
-------- -------- --------
Total stockholders' equity 180,474 169,706 174,952
-------- -------- --------
Total liabilities and stockholders' equity $307,322 $309,980 $314,107
======== ======== ========
==================================================================================================================================
</TABLE>
See notes to consolidated financial statements.
Page 1
<PAGE> 4
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share) (UNAUDITED)
<TABLE>
<CAPTION>
==================================================================================================================================
Three Months Ended Six Months Ended
June 30 June 30
----------------- -------------------
1996 1995 1996 1995
<S> <C> <C> <C> <C>
PAWN SERVICE CHARGES $21,796 $18,887 $43,332 $ 38,052
GROSS PROFIT FROM SALES
Sales 44,131 41,215 91,135 82,315
Cost of sales 27,659 23,733 56,699 48,035
------- ------- ------- --------
Gross profit 16,472 17,482 34,436 34,280
------- ------- ------- --------
NET REVENUES 38,268 36,369 77,768 72,332
------- ------- ------- --------
OPERATING EXPENSES
Operations 22,377 20,849 45,222 42,308
Administration 4,797 3,938 9,592 8,177
Amortization 931 938 1,787 1,849
Depreciation 3,105 2,871 6,210 5,598
------- ------- ------- --------
Total operating expenses 31,210 28,596 62,811 57,932
------- ------- ------- --------
Income from operations 7,058 7,773 14,957 14,400
Interest expense, net 2,245 2,529 4,737 4,987
Other (income)/expense 305 89 487 145
------- ------- ------- --------
Income before income taxes 4,508 5,155 9,733 9,268
Provision for income taxes 1,738 2,037 3,753 3,494
------- ------- ------- --------
Income before cumulative effect of a change
in accounting principle 2,770 3,118 5,980 5,774
Cumulative effect on prior years (to
December 31, 1994) of changing to a
different revenue recognition method (Note 2) (19,772)
------- ------- ------- --------
NET INCOME (LOSS) $ 2,770 $ 3,118 $ 5,980 $(13,998)
======= ======= ======= ========
Amounts per common share:
Income before cumulative effect of a change
in accounting principle $ 0.10 $ 0.11 $ 0.21 $ 0.20
Cumulative effect on prior years (to
December 31, 1994) of changing to a
different revenue recognition method (0.68)
------- ------- ------- --------
Net income (loss) $ 0.10 $ 0.11 $ 0.21 $ (0.48)
======= ======= ======= ========
Weighted average shares - Fully diluted (in thousands): 28,809 28,907 28,805 28,965
==================================================================================================================================
</TABLE>
See notes to consolidated financial statements.
Page 2
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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Six Months Ended June 30, 1996 and 1995
(Dollars in thousands) (UNAUDITED)
<TABLE>
<CAPTION>
==================================================================================================================================
Notes Foreign
Receivable Currency
Common Stock Paid In Retained Treasury Stock Stock- Translation
Shares Amount Surplus Earnings Shares Amount holders Adjustment Total
---------- ------ -------- -------- --------- -------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1995 30,235,164 $3,024 $121,840 $61,727 1,495,285 $ (6,734) $ (1,071) $ (3,834) $174,952
Net income 5,980 5,980
Dividends declared (719) (719)
Treasury shares reissued 27 (19,331) 87 114
Tax benefit from exercise
of option shares 11 11
Reduction in stockholders
notes receivable 15 15
Foreign currency
translation adjustment 121 121
---------- ------ -------- ------- --------- -------- -------- -------- --------
Balance at
June 30, 1996 30,235,164 $3,024 $121,878 $66,988 1,475,954 $ (6,647) $ (1,056) $ (3,713) $180,474
========== ====== ======== ======= ========= ======== ======== ======== ========
===================================================================================================================================
Balance at
December 31, 1994 30,235,164 $3,024 $121,481 $70,081 1,666,099 $ (7,460) $ - $ (3,692) $183,434
Net loss (13,998) (13,998)
Dividends declared (714) (714)
Treasury shares reissued 73 (36,846) 166 239
Tax benefit from exercise
of option shares 22 22
Foreign currency
translation adjustment 723 723
---------- ------ -------- ------- --------- -------- -------- -------- --------
Balance at
June 30, 1995 30,235,164 $3,024 $121,576 $55,369 1,629,253 $ (7,294) $ - $ (2,969) $169,706
========== ====== ======== ======= ========= ======== ======== ======== ========
===================================================================================================================================
</TABLE>
See notes to consolidated financial statements.
Page 3
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CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands) (UNAUDITED)
<TABLE>
<CAPTION>
==================================================================================================================================
Six Months Ended
June 30
1996 1995
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Reconciliation of Net Income (Loss) to Net
Cash Provided By Operating Activities:
Net income (loss) $ 5,980 $(13,998)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Cumulative effect of accounting change -- 19,772
Amortization 1,787 1,849
Depreciation 6,210 5,598
Increase in service charges receivable (598) (554)
Decrease in inventory 9,067 1,550
Decrease in prepaid expenses and other 71 983
Decrease in accounts payable
and accrued expenses (905) (7,933)
Increase in layaway deposits, net 317 665
(Decrease) increase in income taxes payable (2,141) 750
Deferred taxes 1,427 (1,097)
-------- --------
Net cash provided by operating activities 21,215 7,585
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Loans forfeited and transferred to inventory 43,211 41,018
Loans repaid or renewed 122,040 111,872
Loans made, including loans renewed (172,138) (152,777)
-------- --------
Net (increase) decrease in loans (6,887) 113
Acquisitions (459) (1,412)
Investment in and advances to affiliates (1,750) (900)
Purchases of property and equipment (3,092) (9,293)
-------- --------
Net cash used by investing activities (12,188) (11,492)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net (payments) borrowings under bank lines of credit (9,736) 5,150
Payment of notes receivable stockholders 15 --
Proceeds from issuance of stock, net 114 238
Dividends paid (719) (714)
-------- --------
Net cash (used) provided by financing activities (10,326) 4,674
-------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (44) 213
-------- --------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (1,343) 980
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 3,435 4,827
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,092 $ 5,807
======== ========
==================================================================================================================================
</TABLE>
See notes to consolidated financial statements.
Page 4
<PAGE> 7
CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1 - BASIS OF PRESENTATION
The accompanying consolidated financial statements include the
accounts of Cash America International, Inc. and its wholly owned subsidiaries
(the "Company"). All significant intercompany accounts and transactions have
been eliminated in consolidation. At June 30, 1996, the Company had a 49%
ownership interest, each, in Mr. Payroll Corporation ("Mr. Payroll") and
Express Rent A Tire Ltd. ("Express") (see Note 4). These investments are being
accounted for using the equity method of accounting, whereby the Company
records its 49% share of earnings or losses of such affiliates in its
consolidated financial statements.
The financial statements as of June 30, 1996 and 1995, and for the
three months and six months then ended are unaudited, but in management's
opinion, include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the results for such interim
periods. Operating results for the three months and six months are not
necessarily indicative of the results that may be expected for the full fiscal
year.
These financial statements and related notes should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's 1995 Annual Report to Stockholders.
NOTE 2 - CHANGE IN ACCOUNTING PRINCIPLE
Effective January 1, 1995, the Company changed its method of income
recognition on pawn loans. The Company accrues pawn service charges for all
loans that the Company deems collection is probable based on historical loan
redemption statistics. For loans not repaid, the carrying value of the
forfeited collateral ("inventory") is stated at the lower of cost (cash amount
loaned) or market.
The cumulative effect of the accounting change on years prior to
January 1, 1995 of $19,772,000 (net of a tax benefit of $11,611,000) is
included as a reduction of net income for the first quarter of 1995.
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NOTE 3 - LONG-TERM DEBT
The Company's long-term debt at June 30 consisted of:
<TABLE>
<CAPTION>
1996 1995
- -------------------------------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C>
Debt Obligations:
Line of Credit $125 million due June 19, 2001 $ 34,700 $ 68,850
Line of Credit L. 5 million due April 30, 1998 1,242 -0-
Swedish Kronor term loan due September 21, 1997 27,972 26,685
8.33% senior unsecured notes due 2003 30,000 30,000
8.14% senior unsecured notes due 2007 20,000 -0-
--------- ---------
113,914 125,535
Less current portion 4,286 -0-
--------- ---------
Total long-term debt $ 109,628 $ 125,535
========= =========
</TABLE>
In addition, the Company's wholly owned subsidiary in Sweden has an
undrawn commitment as of June 30, 1996, for a 10,000,000 Swedish Kronor ("SEK")
line of credit.
On June 19, 1996, the Company modified the terms of its existing
unsecured credit agreement, previously providing for a $100,000,000 line of
credit maturing in 1998 and a $25,000,000 line of credit maturing in 1997, by
providing for a $125,000,000 unsecured line of credit with a single maturity of
June 30, 2001. The modified credit agreement requires that a fee of 1/4% per
annum be paid quarterly on the amount of the unused commitment. The borrowing
rate under the modified line of credit is at the Company's option of either the
base rate, as specified by the Agent Bank, or a margin over LIBOR based on the
Company's debt-to-total capital ratio measured quarterly. As of June 30, 1996,
the Company has the option of borrowing at LIBOR + 75 basis points. The
modified credit agreement provides for financial covenants similar to those
previously in effect.
On June 2, 1995, the Company entered into a floating-to-fixed interest
rate exchange agreement. The agreement fixes the interest rate on SEK
118,750,000 (approximately $17,960,000 at June 30, 1996) at 10.94% through
August 26, 1998. The effective rate of interest on the Swedish Term Loan at
June 30, 1996, was 9.47% after taking into account the interest rate exchange
agreement.
NOTE 4 - INVESTMENTS IN AFFILIATES
On July 13, 1994, the Company acquired a 49% interest in Mr. Payroll,
a private company which sells franchises for check-cashing kiosks. In
conjunction with its investment, the Company has entered into a revolving
credit agreement with Mr. Payroll which provides for maximum borrowings of $3
million from the
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<PAGE> 9
Company. Interest is payable quarterly at a rate, reset monthly, that is
equivalent to LIBOR plus 4%. The entire unpaid principal balance is due and
payable in full on February 28, 1997. Mr. Payroll has granted the Company a
security interest in all of its assets. As of June 30, 1996, Mr. Payroll had
borrowings outstanding of $3,000,000. The amounts are included in other
assets.
On September 20, 1995, the Company acquired a 49% interest in Express,
a private company which offers automobile and truck tires and wheels on a
rent-to-own basis. In conjunction with its investment, the Company has entered
into a revolving credit agreement with Express which provides for maximum
borrowings of $2 million from the Company. Interest is payable quarterly at a
rate, reset monthly, that is equivalent to LIBOR plus 4%. The entire unpaid
principal balance is due and payable in full on February 28, 1998. Express has
granted the Company a security interest in all of its assets. As of June 30,
1996, Express had borrowings outstanding of $1,550,000. The amounts are
included in other assets.
NOTE 5 - LITIGATION
The Company is a defendant in certain lawsuits encountered in the
ordinary course of its business. In the opinion of management, the resolution
of these matters will not have a material adverse effect on the Company's
financial position or results of operations.
Page 7
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30,
1996 VERSUS THE COMPARABLE 1995 PERIODS
SUMMARY CONSOLIDATED FINANCIAL DATA
SECOND QUARTER ENDED JUNE 30, 1996 vs
SECOND QUARTER ENDED JUNE 30, 1995
================================================================================
The following table sets forth selected consolidated financial data with
respect to the Company for the three months ended June 30, 1996 and 1995.
<TABLE>
<CAPTION>
($ in thousands)
1996 1995 Change
------- ------- --------
<S> <C> <C> <C>
Pawn service charges $21,796 $18,887 15%
Gross profit from sales
Sales 44,131 41,215 7%
Cost of sales 27,659 23,733 17%
------- ------- -----
Gross profit 16,472 17,482 (6)%
------- ------- -----
Net Revenues $38,268 $36,369 5%
------- ------- -----
Other Data:
Annualized yield on loans 98% 97% 1%
Average loan balance per
average location in operation $ 239 $ 216 11%
Average pawn loan at end of
period (not in thousands) $ 93 $ 90 3%
Gross profit as a percentage of sales 37.3% 42.4% (12)%
Average annualized inventory turnover 2.2X 1.7X 29%
Average inventory balance per
average location in operation $ 133 $ 158 (16)%
Expenses as a percentage of net revenues:
Operations 58.5% 57.3% 2%
Administration 12.5% 10.8% 16%
Depreciation and amortization 10.5% 10.5% 0%
Interest, net 5.9% 7.0% (16)%
Locations in Operation:
Beginning of period 374 357
Acquired 1
Established 2 9
Combined
------- -------
End of period 377 366 3%
======= ======= =====
Average number of locations in
operation during the period (a) 375 362 4%
======= ======= =====
</TABLE>
(a) Averages based on accumulation of month-end balances and dividing aggregate
total by total months in the period.
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SUMMARY CONSOLIDATED FINANCIAL DATA
SIX MONTHS ENDED JUNE 30, 1996 vs
SIX MONTHS ENDED JUNE 30, 1995
- --------------------------------------------------------------------------------
The following table sets forth selected consolidated financial data with
respect to the Company for the six months ended June 30, 1996 and 1995.
<TABLE>
<CAPTION>
($ in thousands)
1996 1995 Change
------- ------- ------
<S> <C> <C> <C>
Pawn service charges $43,332 $38,052 14%
Gross profit from sales
Sales 91,135 82,315 11%
Cost of sales 56,699 48,035 18%
------- ------- ----
Gross profit 34,436 34,280 0%
------- ------- ----
Net Revenues $77,768 $72,332 8%
------- ------- ----
Other Data:
Annualized yield on loans 98% 97% 1%
Average loan balance per
average location in operation $ 237 $ 221 7%
Average pawn loan at end of
period (not in thousands) $ 93 $ 90 3%
Gross profit as a percentage of sales 37.8% 41.6% (9)%
Average annualized inventory turnover 2.2X 1.7X 29%
Average inventory balance per
average location in operation $ 141 $ 162 (13)%
Expenses as a percentage of net revenues:
Operations 58.1% 58.5% (1)%
Administration 12.3% 11.3% 9%
Depreciation and amortization 10.3% 10.3% 0%
Interest, net 6.1% 6.9% (12)%
Locations in Operation:
Beginning of period 373 340
Acquired 1 3
Established 5 25
Combined (2) (2)
------- -------
End of period 377 366 3%
======= ======= ====
Average number of locations in
operation during the period (a) 375 356 5%
======= ======= ====
</TABLE>
(a) Averages based on accumulation of month-end balances and dividing aggregate
total by total months in the period.
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IMPACT OF EXPANDING OPERATIONS
The Company expanded its operations over the 18-month period from
December 31, 1994, through June 30, 1996, with the addition of 42 pawnshops.
Thirty-seven stores were new start-ups and five stores were acquired during the
period, and five stores were combined into existing locations for a net
addition of 37 stores during the 18-month period. At June 30, 1996, the
Company operated 377 pawnshops--330 in 14 states in the United States, 37
pawnshops in the United Kingdom operating under the name Harvey & Thompson,
Ltd., and 10 pawnshops in Sweden operating under the name Svensk Pantbelaning.
Net revenues (total revenues less cost of sales) increased $1.9
million, or 5%, in the second quarter of 1996 over the same period of 1995,
resulting primarily from a 5% gain on same stores (those in operation more than
one year) and a slight increase in the average number of stores in operation
during the two periods. Net revenues for the six month period ended June 30,
1996, increased $5.4 million, or 8%, over the corresponding period in 1995.
This increase resulted primarily from a 7% gain on same stores and a slight
increase in the average number of stores in operation during the two periods.
PAWN SERVICE CHARGES
Pawn service charges are impacted by changes in the average
outstanding amount of pawn loans and average loan yields. Pawn service charges
increased $2.9 million, or 15%, and $5.3 million, or 14%, for the three months
and six months ended June 30, 1996, over the comparable periods in 1995. These
increases resulted primarily from same store increases in the average
outstanding amount of pawn loans of 16% and 11%, respectively, for the three
and six month periods ending June 30, 1996, over the comparable periods in
1995, combined with slight increases in the average number of stores in
operation.
The yield on loans outstanding increased in the three and six month
periods ending June 30, 1996, to approximately 98% from 97% for the same
periods in 1995. The consolidated 98% annual yield represents a weighted
average of the distinctive yields realized in the three different countries in
which the Company operates. In its domestic operations the Company realized a
slight increase of 1% in its loan yield to 128% in the second quarter of 1996
from 127% in the second quarter of 1995. Domestically, the loan yield for the
six months ended June 30, 1996, was 128% compared to 126% for the same period
in 1995. Internationally, loans at Harvey & Thompson in the United Kingdom
yielded 72% and 71%, respectively, for the three and six month periods ended
June 30, 1996, compared to 69% and 70%, respectively, for the same periods in
1995, while loans at Svensk Pantbelaning in Sweden yielded 46% during both
periods in 1996 and 1995, producing a blended international yield of 57% in the
second quarter and 56% for the six months ended June 30, 1996 compared to 57%
for both respective periods in 1995.
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<PAGE> 13
The average loan balance per average location increased 11% and 7%,
respectively, for the three and six month periods ending June 30, 1996, over
the comparable periods in 1995. These increases in average loan balances per
average location are due to domestic increases of 11% and 7%, respectively,
increases in average loan balance per location in the Swedish stores of 22% and
25%, respectively, combined with decreases of 6% and 7%, respectively for the
Harvey & Thompson stores. The decrease in the average loan balance per store
in the Harvey & Thompson locations is due to new start-up stores.
SALES AND GROSS PROFIT
Sales for the three months ended June 30, 1996, increased $2.9
million, or 7%, compared to the same period of 1995. The rise in sales was
impacted by a same store sales decrease of 2%, a $2.4 million increase in sales
of scrap gold and other precious metals at wholesale, and the increase in the
average number of stores in operation during the period as noted above. The
Company believes that the decreased same store sales is due in part to its
customers' earlier receipt of federal income tax refunds in 1996 compared to
1995. The Company believes that many customers use a portion of their refund
to repay loans and purchase items of personal property and that, while the
preponderance of this purchasing and loan repayment activity in 1995 occurred
in the second quarter, the preponderance of this activity in 1996 occurred in
the first quarter. Sales for the six months ended June 30, 1996, increased
$8.8 million, or 11%, compared to the same period of 1995. The rise in sales
was impacted by a same store sales increase of 2%, a $4.0 million increase in
sales of scrap gold and other precious metals at wholesale, and the increase in
the average number of stores in operation as noted above.
Gross profit margins decreased to 37.3% and 37.8%, respectively, for
the three and six months ended June 30, 1996, compared to 42.4% and 41.6% for
the same periods in 1995. However, inventory turns increased from 1.7 times to
2.2 times for the respective periods of 1996 compared to the same periods for
1995. During the first quarter of 1996, the Company introduced a new incentive
compensation program for its field operations personnel with a focus of
rewarding the maximization of cash returns on capital employed. Management of
the Company believes that the new incentive program has led to increased
revenues, increased inventory turns, and decreased inventory levels while
emphasizing increases in net revenues. This emphasis resulted in decreased
gross profit margins for both the three month and six month periods ended June
30, 1996.
EXPENSES
Operations and administrative expenses increased $2.4 million or 9.6%
in the second quarter of 1996 over the second quarter of 1995. As a
percentage of net revenues, this represents an increase to 71% for 1996
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<PAGE> 14
compared to 68% in 1995. This increase consists of a 2% increase in same store
operating expenses, an increase in the average number of stores in operation
during the period and expenses associated with a reorganization of the domestic
field management structure during the second quarter of 1996, along with
additional administrative support for the field operations. For the six month
period ended June 30, 1996, operations and administrative expenses increased
$4.3 million over the same period in 1995, while the percentage of expenses to
net revenues remained flat at approximately 70%.
Domestic operations and administration expenses, as a percentage of
domestic net revenues, increased to 75% in the second quarter of 1996 from 72%
in 1995. The increase is due primarily to the reorganization mentioned above
and the development of administrative support for the field organization.
These expenses for the six months ended June 30, 1996, remained relatively flat
over the same period in 1995 at approximately 74% of net revenues for the
period.
As a percentage of foreign net revenues, operations and administration
expenses related to foreign operations were 46% for both the three month
periods ending June 30, 1996 and 1995. For the six months ending June 30,
1996, the percentage increased to 47% from 45% for the same period in 1995.
This increase resulted primarily from the start-up of three new stores in the
United Kingdom.
Depreciation and amortization, as a percentage of net revenues was
constant at 11% for the three month periods ending June 30, 1996 and 1995, and
at 10% for the six month periods ending June 30, 1996 and 1995.
Net interest expense, as a percentage of net revenues, decreased to
5.9% and 6.1% for the three month and six month period ended June 30, 1996,
from 7.0% and 6.9% for the respective periods in 1995. This reduction resulted
primarily from decreases in the average debt balance outstanding of 12% for the
second quarter of 1996 compared to the second quarter of 1995, and a 7%
reduction in the average debt balance outstanding for the six months ended June
30, 1996, compared to the six months ended June 30, 1995. In addition there
was a slight decrease in the weighted average interest rates for the three
month period ending June 30, 1996, and for the six month period ended June 30,
1996, compared to the same periods for 1995.
OTHER INCOME / (EXPENSE)
During the second quarter of 1996 and 1995 the Company recorded losses
from its investments in affiliates of $325,000 and $101,000, respectively. For
the six months ended June 30, 1996 and 1995, the Company recorded losses on
these investments of $530,000 and $193,000, respectively. These losses were
partially offset by rent income and other miscellaneous items.
Page 12
<PAGE> 15
INCOME TAXES
The Company's effective tax rate decreased to 39% in the second
quarter of 1996 compared to 40% for the same period in 1995. The effective tax
rate for the six months ended June 30, 1996, increased to 39% compared to 38%
for the six months ended June 30, 1995. The Company's domestic operations
experienced a slight decrease in its effective tax rate in the second quarter
of 1996, while the effective tax rate for its foreign operations for same
period remained unchanged at 33%. The primary reason for the increase in the
Company's effective tax rate for the six month period ended June 30, 1996, over
the same 1995 period was the utilization of miscellaneous tax credits in the
United Kingdom during the first quarter of 1995. The Company's effective tax
rate for domestic operations remained constant at 42% for the six month period
ending June 30, 1996, compared to the same period for 1995.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1996, cash and cash equivalents decreased to $2.1 million
from $3.4 million at December 31, 1995. This decrease was caused by
investments in increased loan balances of $6.9 million, purchases of $3.1
million of property and equipment, reduction of long-term debt of $9.7 million,
advances to affiliates of $1.8 million, and payment of dividends and other
activities of $1.0 million. The above decreases were offset by $21.2 million
of cash generated from operating activities.
The Company currently has a $125 million unsecured bank line of
credit, of which $90.3 million was unused at June 30, 1996. The Company's
wholly owned subsidiary, Harvey & Thompson, Ltd., has a committed 5 million
pound sterling unsecured line of credit from a UK based commercial bank, of
which 4.2 million pounds sterling was unused at June 30, 1996. The Company's
wholly owned subsidiary, Svensk Pantbelaning AB, has a SEK 10 million unsecured
line of credit with a commercial bank, all of which was unused at June 30,
1996.
The Company believes that funds provided from operations, coupled with
the Company's current working capital and available lines of credit, are
sufficient to meet its foreseeable cash requirements.
Page 13
<PAGE> 16
FOREIGN OPERATIONS
The following table sets forth selected consolidated financial data
for Harvey & Thompson and Svensk Pantbelaning as of June 30, 1996 and 1995, and
for the three and six month periods then ended.
Balance sheet data for Harvey & Thompson has been translated from
pounds sterling into U.S. dollars using the end of the period currency exchange
rate of 1.553 at June 30, 1996, and 1.596 at June 30, 1995. Income statement
data has been translated at an average exchange rate of 1.525 for the three
month period ending June 30, 1996, compared to 1.599 for the same period in
1995.
Balance sheet data for Svensk Pantbelaning has been translated from
Swedish Kronor into U.S. dollars using the end of the period currency exchange
rate of 6.612 at June 30, 1996, and 7.261 at June 30, 1995, respectively.
Income statement data has been translated at an average exchange rate of 6.730
for the three month period ending June 30, 1996, compared to 7.297 for the
comparable period in 1995.
<TABLE>
<CAPTION>
Three Months Ended June 30,
1996 1995 Change
------- ------ --------
($ in thousands)
<S> <C> <C> <C>
Income Statement Data:
Pawn service charges $ 5,330 $ 4,712 13%
Net revenues 5,463 4,803 14%
Operating expenses 2,764 2,450 13%
Income from operations 2,699 2,353 15%
Other Data:
Total average locations 46 43 7%
Annualized yield on loans 56.5% 56.6% 0%
Ending loan balance $39,395 $33,988 16%
Average loan balance
per average location in operation $ 824 $ 777 6%
Expenses as a percentage of net revenues:
Operations 34.6% 34.8% (1)%
Administration 11.1% 11.5% (3)%
</TABLE>
Page 14
<PAGE> 17
Income statement data for Harvey & Thompson for the six months ended
June 30 has been translated from British pounds sterling into U.S. dollars at
an average exchange rate of 1.528 for 1996, compared to 1.591 for 1995.
Income statement data for Svensk Pantbelaning has been translated from
Swedish Kronor into U.S. dollars at average exchange rates of 6.751 for 1996,
compared to 7.33 for 1995.
<TABLE>
<CAPTION>
Six Months Ended June 30,
1996 1995 Change
------ ------ --------
($ in thousands)
<S> <C> <C> <C>
Income Statement Data:
Pawn service charges $10,356 $9,231 12%
Net revenues 10,585 9,580 10%
Operating expenses 5,467 4,770 15%
Income from operations 5,118 4,810 6%
Other Data:
Total average locations 46 43 7%
Annualized yield on loans 56.4% 57.3% (2)%
Average loan balance
per average location in operation $ 803 $ 755 6%
Expenses as a percentage of net revenues:
Operations 35.0% 33.1% 6%
Administration 11.6% 12.1% (4)%
</TABLE>
Page 15
<PAGE> 18
DOMESTIC OPERATIONS
Presented below is selected financial data for the Company's domestic
operations as of June 30, 1996 and 1995, and for the three months then ended:
<TABLE>
<CAPTION>
($ in thousands)
1996 1995 Change
------- ------- ------
<S> <C> <C> <C>
Pawn service charges $16,466 $14,175 16%
Gross profit from sales
Sales 43,760 40,930 7%
Cost of sales 27,421 23,539 16%
------- ------- ----
Gross profit 16,339 17,391 (6)%
------- ------- ----
Net Revenues $32,805 $31,566 4%
------- ------- ----
Other Data:
Annualized yield on loans 128% 127% 1%
Average loan balance per
average location in operation $157 $ 141 11%
Average pawn loan at end of
period (not in thousands) $70 $ 67 4%
Gross profit as a percentage of sales 37.3% 42.5% (12)%
Average annualized inventory turnover 2.2X 1.7X 29%
Average inventory balance per
average location in operation $ 151 $ 178 (15)%
Expenses as a percentage of net revenues:
Operations 62.5% 60.8% 3%
Administration 12.8% 10.7% 20%
Depreciation and amortization 11.5% 11.3% 2%
Interest, net 4.8% 6.4% (25)%
Domestic Locations in Operation:
Beginning of period 329 314
Acquired 1 ---
Established --- 8
Combined --- ---
------- -------
End of period 330 322 2%
======= ======= ===
Average number of locations in
operation during the period (a) 329 319 3%
======= ======= ===
</TABLE>
(a) Averages based on accumulation of month-end balances and dividing aggregate
total by total months in the period.
Page 16
<PAGE> 19
DOMESTIC OPERATIONS
Presented below is selected financial data for the Company's domestic
operations as of June 30, 1996 and 1995, and for the six months then ended:
<TABLE>
<CAPTION>
($ in thousands)
1996 1995 Change
------- ------- ------
<S> <C> <C> <C>
Pawn service charges $32,976 $28,821 14%
Gross profit from sales
Sales 90,464 81,534 11%
Cost of sales 56,257 47,603 18%
------- ------- ---
Gross profit 34,207 33,931 1%
------- ------- ---
Net Revenues $67,183 $62,752 7%
------- ------- ---
Other Data:
Annualized yield on loans 128% 126% 2%
Average loan balance per
average location in operation $ 158 $ 148 7%
Average pawn loan at end of
period (not in thousands) $ 70 $ 67 4%
Gross profit as a percentage of sales 37.8% 41.6% (9)%
Average annualized inventory turnover 2.2X 1.7X 29%
Average inventory balance per
average location in operation $ 159 $ 183 (13)%
Expenses as a percentage of net revenues:
Operations 61.8% 62.4% (1)%
Administration 12.5% 11.2% 12%
Depreciation and amortization 11.1% 11.2% (1)%
Interest, net 5.0% 6.4% (22)%
Domestic Locations in Operation:
Beginning of period 327 300
Acquired 1 3
Established 3 21
Combined (1) (2)
------- -------
End of period 330 322 2%
======= ======= ===
Average number of locations in
operation during the period (a) 329 313 5%
======= ======= ===
</TABLE>
(a) Averages based on accumulation of month-end balances and dividing aggregate
total by total months in the period.
Page 17
<PAGE> 20
PART II
Item 1. LEGAL PROCEEDINGS
See Note 5 of Notes to Consolidated Financial Statements
Item 2. CHANGES IN SECURITIES
Not Applicable
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On April 24, 1996, the Company's Annual Meeting of Shareholders was
held. All of the nominees for director identified in the Company's Proxy
Statement, filed pursuant to Regulation 14A under the Securities Exchange Act
of 1934, were elected at the meeting to hold office until the next Annual
Meeting or until their successors are duly elected and qualified. The
shareholders ratified the Company's selection of independent auditors. The
shareholders also approved the proposal to amend the Company's 1989
Non-Employee Director Stock Option Plan. There was no other business brought
before the meeting that required shareholder approval. Votes were cast in the
matters described below as follows (there were no broker non-votes in matters
(a) and (b) below):
(a) Election of directors
<TABLE>
<CAPTION>
For Withheld
--- --------
<S> <C> <C>
Jack R. Daugherty 24,244,163 182,811
A. R. Dike 24,244,763 182,211
Daniel R. Feehan 24,245,963 181,011
James H. Graves 23,383,355 1,043,619
B. D. Hunter 24,236,903 190,071
Timothy J. McKibben 23,390,455 1,036,519
Alfred J. Micallef 23,394,955 1,032,019
Carl P. Motheral 24,240,795 186,179
Samuel W. Rizzo 24,238,363 188,611
Rosalin Rogers 24,203,863 223,111
</TABLE>
(b) Ratification of Independent Auditors
Page 18
<PAGE> 21
For - 24,258,160
Against - 100,920
Abstain - 67,889
(c) Approval of the amendment of the Company's 1989 Non-Employee
Director Stock Option Plan
For - 9,603,276
Against - 7,712,486
Abstain - 165,037
Broker Non-Votes - 6,946,175
Item 5. OTHER INFORMATION
Not Applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1- Amended and Restated Senior Revolving Credit
Facility Agreement among Cash America
International, Inc., certain lenders named
therein, and NationsBank of Texas, N.A., as
Administrative Agent dated as of June 19,
1996.
27 - Financial Data Schedule
(b) Reports on Form 8-K - None
Page 19
<PAGE> 22
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CASH AMERICA INTERNATIONAL, INC.
----------------------------------
(Registrant)
BY: /s/ DANIEL R. FEEHAN
----------------------------
Daniel R. Feehan
President and
Principal Financial Officer
Date: August 9, 1996
Page 20
<PAGE> 23
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
10.1 - Amended and Restated Senior Revolving Credit
Facility Agreement among Cash America
International, Inc., certain lenders named
therein, and NationsBank of Texas, N.A., as
Administrative Agent dated as of June 19,
1996.
27 - Financial Data Schedule
<PAGE> 1
EXHIBIT 10.1
================================================================================
$125,000,000
AMENDED AND RESTATED SENIOR
REVOLVING CREDIT FACILITY AGREEMENT
AMONG
CASH AMERICA INTERNATIONAL, INC.
CERTAIN LENDERS
AND
NATIONSBANK OF TEXAS, N.A., AS ADMINISTRATIVE AGENT
June 19, 1996
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 1
Definitions
-----------
Section 1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
-------------
Section 1.2 Amendments and Renewals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
-----------------------
Section 1.3 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
------------
ARTICLE 2
Advances
--------
Section 2.1 The Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
------------
(a) Revolving Credit Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
-------------------------
(b) The Swing Line Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
-----------------------
Section 2.2 Manner of Borrowing and Disbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
------------------------------------
Section 2.3 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
--------
(a) On Base Rate Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
---------------------
(b) On LIBOR Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
-----------------
(c) On Swing Line Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
----------------------
(d) Interest if No Notice of Selection of Interest Rate Basis . . . . . . . . . . . . . . . . . 20
---------------------------------------------------------
(e) Interest After an Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
----------------------------------
Section 2.4 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
----
(a) Closing Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
-----------
(b) Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
--------------
Section 2.5 Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
----------
(a) Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
---------------------
(b) Mandatory Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
--------------------
(c) Prepayments, Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
----------------------
Section 2.6 Reduction of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
-----------------------
(a) Voluntary Reduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
-------------------
(b) Mandatory Reduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
-------------------
(c) General Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
--------------------
Section 2.7 Non-Receipt of Funds by the Administrative Agent . . . . . . . . . . . . . . . . . . . . . 22
------------------------------------------------
Section 2.8 Payment of Principal of Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
--------------------------------
Section 2.9 Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
-------------
Section 2.10 Manner of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
-----------------
Section 2.11 LIBOR Lending Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
---------------------
Section 2.12 Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
-------------------
Section 2.13 Calculation of Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
--------------------
Section 2.14 Booking Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
-------------
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 2.15 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
-----
ARTICLE 3
Conditions Precedent
--------------------
Section 3.1 Conditions Precedent to the Effectiveness of this Agreement . . . . . . . . . . . . . . . . 29
-----------------------------------------------------------
Section 3.2 Conditions Precedent to All Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
------------------------------------
Section 3.3 Conditions Precedent to Conversions and Continuations . . . . . . . . . . . . . . . . . . . 31
-----------------------------------------------------
Section 3.4 Existing Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
-------------------------
ARTICLE 4
Representations and Warranties
------------------------------
Section 4.1 Organization and Good Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
------------------------------
Section 4.2 Authorization and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
-----------------------
Section 4.3 No Conflicts or Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
------------------------
Section 4.4 Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
-----------------------
Section 4.5 No Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
--------
Section 4.6 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
-------------------
Section 4.7 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
---------------
Section 4.8 No Default or Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
------------------------------
Section 4.9 Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
-------------------
Section 4.10 No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
-------------
Section 4.11 Burdensome Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
--------------------
Section 4.12 Regulatory Defects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
------------------
Section 4.13 Use of Proceeds; Margin Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
-----------------------------
Section 4.14 No Financing of Corporate Takeovers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
-----------------------------------
Section 4.15 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
-----
Section 4.16 Principal Office, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
----------------------
Section 4.17 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
-----
Section 4.18 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
-------------------
Section 4.19 Insider . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
-------
Section 4.20 Subsidiaries; Trade Names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
-------------------------
Section 4.21 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
--------
Section 4.22 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
------------------------------
Section 4.23 Survival of Representations, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
---------------------------------
ARTICLE 5
Business Covenants
------------------
</TABLE>
- ii -
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 5.1 Financial Statements, Reports and Documents . . . . . . . . . . . . . . . . . . . . . . . . 36
-------------------------------------------
(a) Quarterly Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
--------------------
(b) Annual Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
-----------------
(c) Management Letters and Responses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
--------------------------------
(d) SEC and Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
---------------------
(e) Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
----------------------
(f) Proposed Acquisition Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
--------------------------------
(g) Private Placement Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
-------------------------
(h) Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
-----------------
Section 5.2 Payment of Taxes and Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 38
---------------------------------------
Section 5.3 Maintenance of Existence and Rights; Conduct of Business . . . . . . . . . . . . . . . . . 38
--------------------------------------------------------
Section 5.4 Notice of Default or Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
-------------------------------------
Section 5.5 Other Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
-------------
Section 5.6 Compliance with Loan Papers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
---------------------------
Section 5.7 Compliance with Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
-----------------------------------
Section 5.8 Operations and Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
-------------------------
Section 5.9 Books and Records; Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
-------------------------
Section 5.10 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
-------------------
Section 5.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
---------
Section 5.12 Authorizations and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
----------------------------
Section 5.13 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
------------------
Section 5.14 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
-------------------
(a) Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
--------------
(b) Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
----------------------
(c) Minimum Inventory Turnover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
--------------------------
(d) Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
-------------------
(e) Minimum Fixed Charge Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
-----------------------------
(f) Consolidated Funded Debt to Consolidated EBITDA . . . . . . . . . . . . . . . . . . . . . . 41
-----------------------------------------------
Section 5.15 New Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
----------------
Section 5.16 Opinions Regarding Obligations of Guarantors . . . . . . . . . . . . . . . . . . . . . . . 41
--------------------------------------------
Section 5.17 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
---------
ARTICLE 6
Negative Covenants
------------------
Section 6.1 Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
--------------------------
Section 6.2 Negative Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
---------------
Section 6.3 Limitation on Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
-------------------------
Section 6.4 Alteration of Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
---------------------------------
Section 6.5 Certain Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
--------------------
Section 6.6 Name, Fiscal Year and Accounting Firm and Method . . . . . . . . . . . . . . . . . . . . . 46
------------------------------------------------
</TABLE>
- iii -
<PAGE> 5
<TABLE>
<S> <C> <C>
Section 6.7 Liquidation, Mergers, Consolidations, Acquisitions and Dispositions of
----------------------------------------------------------------------
Substantial Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
------------------
Section 6.8 Lines of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
-----------------
Section 6.9 No Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
-------------
Section 6.10 Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
----------
Section 6.11 Strict Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
-----------------
Section 6.12 No New Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
-------------------
Section 6.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
-----
ARTICLE 7
Default
-------
Section 7.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
-----------------
Section 7.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
--------
ARTICLE 8
Changes in Circumstances
------------------------
Section 8.1 LIBOR Basis Determination Inadequate . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
------------------------------------
Section 8.2 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
----------
Section 8.3 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
---------------
Section 8.4 Effect On Base Rate Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
----------------------------
Section 8.5 Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
----------------
ARTICLE 9
AGREEMENT AMONG LENDERS
-----------------------
Section 9.1 Agreement Among Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
-----------------------
(a) Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
--------------------
(b) Replacement of the Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 55
---------------------------------------
(c) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
--------
(d) Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
--------------------
(e) Reliance by the Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
------------------------------------
(f) Limitation of the Administrative Agent's Liability . . . . . . . . . . . . . . . . . . . . 56
--------------------------------------------------
(g) Liability Among Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
-----------------------
(h) Rights as Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
----------------
Section 9.2 Lender Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
----------------------
Section 9.3 Benefits of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
-------------------
ARTICLE 10
</TABLE>
- iv -
<PAGE> 6
<TABLE>
<S> <C> <C>
Miscellaneous
-------------
Section 10.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
-------
Section 10.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
--------
Section 10.3 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
-------
Section 10.4 Determination by the Lenders Conclusive and Binding . . . . . . . . . . . . . . . . . . . . 59
---------------------------------------------------
Section 10.5 Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
-------
Section 10.6 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
----------
Section 10.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
------------
Section 10.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
------------
Section 10.9 Interest and Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
--------------------
Section 10.10 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
---------------
Section 10.11 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
--------
Section 10.12 Amendment and Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
--------------------
SECTION 10.13 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
-------------
SECTION 10.14 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
----------------
</TABLE>
- v -
<PAGE> 7
Exhibits
Exhibit A: Revolving Credit Note
Exhibit B: Swing Line Note
Exhibit C: Subsidiary Guaranty
Exhibit D: Assignment Agreement
Exhibit E: Notice of Borrowing
Exhibit F: Compliance Certificate
Exhibit G: Request for Maturity Date Extension
Schedules
Schedule 1 LIBOR Lending Office
- vi -
<PAGE> 8
AMENDED AND RESTATED SENIOR
REVOLVING CREDIT FACILITY AGREEMENT
THIS AMENDED AND RESTATED SENIOR REVOLVING CREDIT FACILITY AGREEMENT
is dated as of June 19, 1996, among CASH AMERICA INTERNATIONAL, INC., a Texas
corporation ("Borrower"), the Lenders from time to time party hereto, and
NATIONSBANK OF TEXAS, N.A., a national banking association, as administrative
agent for the Lenders.
BACKGROUND
The Borrower, the Lenders and the Administrative Agent are parties to
that Senior Revolving Credit Facility Agreement dated as of June 29, 1993 (said
Agreement, as amended, the "Existing Credit Agreement"). The Borrower has
requested that the Lenders amend and restate the Existing Credit Agreement.
The Lenders have agreed to do so, subject to the terms and conditions set forth
below.
In consideration of the mutual covenants and agreements contained
herein, and other good and valuable consideration hereby acknowledged, the
parties hereto agree that the Existing Credit Agreement is amended and restated
in its entirety as follows:
ARTICLE 1
Definitions
Section 1.1 Defined Terms. For purposes of this Agreement:
"Accounting Firm" has the meaning specified in Section 5.1 hereof.
"Additional Costs" has the meaning specified in Section 8.5 hereof.
"Adjustment Date" means, for purposes of the Applicable Margin, the
date which is three Business Days after the date of receipt by the
Administrative Agent of the financial statements required to be delivered
pursuant to Section 5.1(a) or 5.1(b) hereof which results in a change in the
Applicable Margin.
"Adjustment of Revenue Recognition" means (a) the accrual by the
Borrower and its Consolidated Subsidiaries of pawn service charges on a
constant basis over the loan term for those loans with respect to which the
Borrower deems collection to be probable and (b) with respect to loans not
repaid, the calculation of the carrying value of the forfeited collateral
(inventory) at the lower of cost (the principal amount advanced) or market.
<PAGE> 9
"Administrative Agent" means NationsBank of Texas, N.A., a
national banking association, as administrative agent for the Lenders,
or such successor administrative agent appointed pursuant to Section
9.1(b) hereof.
"Advance" means a Revolving Credit Advance or a Swing Line Advance and
"Advances" means Revolving Credit Advances and Swing Line Advances.
"Affiliate" means any Person that directly or indirectly through one
or more Subsidiaries Controls, or is Controlled By or Under Common Control
with, the Borrower.
"Agreement" means this Amended and Restated Senior Revolving Credit
Facility Agreement, as amended, modified, supplemented and restated from time
to time.
"Agreement Date" means the date of this Agreement.
"Applicable Environmental Laws" means applicable laws pertaining to
health or the environment, including without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986 (as amended from time
to time, "CERCLA"), the Resource Conservation and Recovery Act of 1976, as
amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act
amendments of 1980, and the Hazardous and Solid Waste Amendments of 1984 (as
amended from time to time, "RCRA"), the Texas Water Code, and the Texas Solid
Waste Disposal Act.
"Applicable Law" means (a) in respect of any Person, all provisions of
constitutions, statutes, rules, regulations and orders of governmental bodies
or regulatory agencies applicable to such Person and its properties, including,
without limiting the foregoing, all orders and decrees of all courts and
arbitrators in proceedings or actions to which the Person in question is a
party, and (b) in respect of contracts relating to interest or finance charges
that are made or performed in the State of Texas, "Applicable Law" shall mean
the laws of the United States of America, including without limitation 12 USC
Sections 85 and 86, as amended from time to time, and any other statute of the
United States of America now or at any time hereafter prescribing the maximum
rates of interest on loans and extensions of credit, and the laws of the State
of Texas, including, without limitation, Article 5069-1.04, Title 79, Revised
Civil Statutes of Texas, 1925, as amended ("Art. 1.04"), and any other statute
of the State of Texas now or at any time hereafter prescribing maximum rates of
interest on loans and extensions of credit; provided that the parties hereto
agree that the provisions of Chapter 15, Title 79, Revised Civil Statutes of
Texas, 1925, as amended, shall not apply to Advances, this Agreement, the Notes
or any other Loan Papers.
"Applicable Margin" means, for any particular date for any LIBOR
Advance made during (a) the Initial Pricing Period, a rate of interest per
annum equal to 1.0%, and (b) the Subsequent Pricing Period, that rate of
interest per annum equal to the rate set forth below opposite the Leverage
Ratio which is in effect for such particular date:
- 2 -
<PAGE> 10
<TABLE>
<CAPTION>
Leverage Ratio Applicable Margin
-------------- -----------------
<S> <C>
Greater than 0.50 to 1 1.25%
Greater than 0.40 to 1 but less than or equal to 0.50 to 1 1.00%
Less than or equal to 0.4 to 1 0.75%
</TABLE>
During the Subsequent Pricing Period, the Applicable Margin payable by the
Borrower on the Revolving Credit Advances outstanding hereunder shall be
adjusted on each Adjustment Date, according to the performance of the Borrower
for the most recent fiscal quarter. For purposes of the foregoing, if the
financial statements of the Borrower setting forth the Leverage Ratio are not
received by the Administrative Agent by the date required pursuant to Section
5.1(a) or 5.1(b), the Applicable Margin shall be determined as if the Leverage
Ratio is greater than 0.50 to 1 until such time as such financial statements
are received.
"Art. 1.04" has the meaning specified in the definition of "Applicable
Law."
"Assignees" means any assignee of a Lender pursuant to an Assignment
Agreement and has the meaning specified in Section 10.6 hereof.
"Assignment Agreement" has the meaning specified in Section 10.6
hereof.
"Authorized Officer" means any of the following officers of the
Borrower: President, Chief Financial Officer, Vice President-Finance or Vice
President-Treasurer.
"Authorized Signatory" means such senior personnel of the Borrower as
may be duly authorized and designated in writing by the Borrower to execute
documents, agreements and instruments on behalf of the Borrower, and to request
Advances hereunder.
"Base Rate Advance" means a Revolving Credit Advance which bears
interest at the Base Rate Basis.
"Base Rate Basis" means, for any day, a per annum interest rate equal
to the higher of (a) the sum of (i) 0.50% plus (ii) the Federal Funds Rate on
such day, or (b) the Prime Rate on such day. The Base Rate Basis shall be
adjusted automatically as of the opening of business on the effective date of
each change in the Prime Rate to account for such change.
"Borrower" has the meaning specified in the introductory paragraph.
"British Pounds Sterling" and "L." means lawful currency of England.
"Business Day" means a day on which banks are open for the transaction
of business in Dallas, Texas, and, with respect to any LIBOR Advance, in
London, England.
- 3 -
<PAGE> 11
"CAII Pantbelaning AB Loan Agreement" means that certain Loan
Agreement, dated as of September 21, 1994, among CAII Pantbelaning Aktiebolag,
a Swedish joint stock company and wholly-owned Subsidiary of Borrower, the
lenders party thereto and NationsBank of Texas, National Association, as the
Administrative Agent, as amended, modified, supplemented or restated from time
to time.
"Capital Lease" means, as of any date, any lease of property, real or
personal, which would be capitalized on a balance sheet of the lessee prepared
as of such date, in accordance with GAAP.
"Change of Control" means (a) any "person" or "group" (as such terms
are used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether
or not applicable), which is or becomes the "beneficial owner" (as that term is
used in Rules 13d-3 and 13d-5 under the Exchange Act, whether or not
applicable, except that a person shall be deemed to have "beneficial ownership"
of all shares that any such person has the right to acquire, whether such right
is exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the total voting power in the aggregate of all
classes of Stock then outstanding of the Borrower normally entitled to vote in
elections of directors, or (b) during any period of 24 consecutive months after
June 19, 1996, individuals who at the beginning of such period constituted the
Board of Directors of the Borrower (together with any new directors whose
election by such Board or whose nomination for election by the shareholders of
the Borrower was approved by a vote of a majority of the directors then still
in office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved), cease for any
reason to constitute a majority of the Board of Directors of the Borrower then
in office.
"Closing Fee" has the meaning specified in Section 2.4(a) hereof.
"Code" means the Internal Revenue Code of 1986, as amended, together
with all regulations thereunder.
"Commitment" means $125,000,000, as reduced pursuant to Section 2.6
hereof.
"Commitment Fee" has the meaning specified in Section 2.4(b) hereof.
"Consequential Loss", with respect to (a) the Borrower's payment of
all or any portion of the then-outstanding principal amount of a Lender's LIBOR
Advance on a day other than the last day of the Interest Period related
thereto, (b) a LIBOR Advance made on a date other than the date on which such
Advance is to be made according to Section 2.2(b) hereof or Section 2.2(d)
hereof, or (c) any of the circumstances specified in Sections 2.5 and 2.6
hereof on which a Consequential Loss may be incurred, means any loss, cost or
expense incurred by such Lender as a result of the timing of such payment or
LIBOR Advance or in liquidating, redeploying, reinvesting or redepositing the
principal amount so paid or affected by the timing of such Advance or the
circumstances described in Sections 2.5 and 2.6 hereof, which amount shall be
the sum of (a) the interest which, but for such payment or timing of such
Advance, such Lender would have earned
- 4 -
<PAGE> 12
in respect of such principal amount, for the remainder of the Interest Period
applicable to such sum, reduced, if such Lender is able to deposit such
principal amount for the balance of such Interest Period, by the interest
earned by such Lender as a result of so redepositing, redeploying or
reinvesting such principal amount plus (b) any expense or penalty incurred by
such Lender on redepositing, redeploying, reinvesting or liquidating such
principal amount.
"Consolidated Adjusted Net Income" or "Consolidated Adjusted Net Loss"
means, with respect to any period, consolidated net earnings or loss (after
income taxes) of the Borrower and its Consolidated Subsidiaries for such
period, determined in accordance with GAAP, but excluding (a) any gain or loss
in excess of $1,000,000 (before income taxes) arising from the sale of capital
assets; and (b) any other items which would be considered extraordinary items,
in accordance with GAAP.
"Consolidated EBITDA" means, for any period, the sum of the following:
(a) the amount of Consolidated Adjusted Net Income for such period, plus (b)
all taxes, depreciation, amortization and interest expenses which, in
determining Consolidated Adjusted Net Income for such period, were deducted
from the Borrower's and its Consolidated Subsidiaries' gross income for such
period.
"Consolidated Funded Debt" means, as of any date, the sum of (a) the
principal amount of all interest bearing indebtedness of the Borrower and its
Consolidated Subsidiaries, whether current or funded, and whether secured or
unsecured, incurred in connection with borrowings evidenced by a note, bond,
indenture or similar instrument, plus (b) all Capital Leases of the Borrower
and its Consolidated Subsidiaries.
"Consolidated Indebtedness" means, as of any date, all "liabilities"
which would be reflected on a consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries, prepared in accordance with GAAP.
"Consolidated Net Worth" means, as of any date, the total
shareholder's equity which would appear on a consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries prepared as of such date in
accordance with GAAP, but specifically excluding all currency translation
adjustments (gains and losses).
"Consolidated Subsidiaries" means all Subsidiaries of the Borrower
which are included on the consolidated financial statements of the Borrower.
"Consolidated Tangible Assets" means, as of any date, the tangible
assets of the Borrower and its Consolidated Subsidiaries which would be
reflected on a consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries prepared as of such date in accordance with GAAP.
"Consolidated Tangible Net Worth" shall mean, as of any date, the
total shareholder's equity which would appear on a consolidated balance sheet
of the Borrower and its Consolidated
- 5 -
<PAGE> 13
Subsidiaries prepared as of such date in accordance with GAAP, but specifically
excluding all currency translation adjustments (gains and losses), less the net
book value of intangible assets shown on such balance sheet.
"Control" or "Controlled By" or "Under Common Control" means
possession, directly or indirectly, of power to direct or cause the direction
of management or policies (whether through ownership of Voting Stock, by
contract or otherwise); provided, however, that in any event any Person which
beneficially owns, directly or indirectly, 10% or more (in number of votes) of
the securities having ordinary voting power for the election of directors of a
corporation shall be conclusively presumed to control such corporation.
"Debtor Relief Laws" means any applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, insolvency,
reorganization or similar debtor relief laws affecting the rights of creditors
generally from time to time in effect.
"Default" means an Event of Default and/or any of the events specified
in Section 7.1, regardless of whether there shall have occurred any passage of
time or giving of notice that would be necessary in order to constitute such
event an Event of Default.
"Default Rate" means a simple per annum interest rate equal to the
lesser of (a) the Highest Lawful Rate, or (b) the sum of the Base Rate Basis
plus three percent.
"Determining Lenders" means, on any date of determination, any
combination of the Lenders having at least 66-2/3% of the aggregate amount of
the Revolving Credit Advances (which for purpose of the calculation shall
include for each Lender an amount equal to the product of such Lender's
Specified Percentage multiplied by the aggregate principal amount of Swing Line
Advances outstanding); provided, however, that if there are no Revolving Credit
Advances outstanding hereunder, "Determining Lenders" shall mean any
combination of the Lenders whose Specified Percentages hereunder aggregate at
least 66-2/3%.
"Dividend" means, as to any Person, (a) any declaration or payment of
any dividend or distribution (other than a stock dividend) on, or the making of
any pro rata distribution, loan, advance, or investment to or in any holder (in
its capacity as a shareholder) of, any partnership interests or any shares of
Stock of such Person, or (b) any purchase, redemption, or other acquisition or
retirement for value of any partnership interests or any shares of Stock of
such Person.
"Dollars" and the sign "$" means lawful currency of the United States
of America.
"Domestic Subsidiary" means any Subsidiary of the Borrower which is
not a Foreign Subsidiary.
- 6 -
<PAGE> 14
"Event of Default" means any of the events specified in Section 7.1,
provided that any requirement for notice or lapse of time has been satisfied.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Existing Credit Agreement" has the meaning specified in the
Background provision hereof.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of Dallas on the Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate quoted to
the Administrative Agent on such day on such transactions as determined by the
Administrative Agent.
"Fiscal Year" means each twelve-month period beginning on January 1,
and ending on December 31, unless the Borrower shall change such Fiscal Year in
accordance with Section 6.6 hereof.
"Foreign Subsidiary" means CAII Pantbelaning AB, a Swedish joint stock
company, Svensk Pantbelaning AB, a Swedish joint stock company, Harvey &
Thompson, and, in addition, any Subsidiary acquired, incorporated or otherwise
established by the Borrower or any other Subsidiary which is organized under
the laws of a jurisdiction other than the United States of America, any state
thereof or the District of Columbia.
"GAAP" means those generally accepted accounting principles and
practices which are recognized as such by the American Institute of Certified
Public Accountants acting through its Account Principles Board or by the
Financial Accounting Standards Board or through other appropriate boards or
committees thereof and which are consistently applied for all periods after the
date hereof so as to properly reflect the financial condition, and the results
of operations and changes in financial position, of the Borrower and its
Consolidated Subsidiaries, except that any accounting principle or practice
required to be changed by the said Accounting Principles Board or Financial
Accounting Standards Board (or other appropriate board or committee of the said
Boards) in order to continue as a generally accepted accounting principle or
practice may so be changed.
"Governmental Authority" means any domestic or foreign government (or
any political subdivision thereof), court, bureau, agency or other governmental
authority having jurisdiction over the Borrower or any Subsidiary or any of its
or their business, operations or properties.
- 7 -
<PAGE> 15
"Guarantors" means all Domestic Subsidiaries and all other Persons
which, as of any date, shall have executed a Guaranty Agreement as of such
date.
"Guaranty" means any contract, agreement or understanding to
guarantee, or in effect guarantee, any indebtedness (as used herein, the term
"indebtedness" shall include, without limitation, all of the types of
indebtedness and liabilities as contemplated in the definition of "Consolidated
Indebtedness" contained herein) of any other Person (for purposes of this
definition of "Guaranty", such Person is referred to as the "Primary Obligor")
in any manner, whether directly or indirectly, including without limitation
agreements (a) to purchase such indebtedness or any property constituting
security therefor, (b) to advance or supply funds (i) for the purchase or
payment of such indebtedness, or (ii) to maintain working capital or other
balance sheet conditions, or otherwise to advance or make available funds for
the purchase or payment of such indebtedness, (c) to purchase property,
securities or services primarily for the purpose of assuring the holder of such
indebtedness of the ability of the Primary Obligor to make payment of the
indebtedness, or (d) otherwise to assure the holder of the indebtedness of the
Primary Obligor against loss in respect thereof; except that "Guaranty" shall
not include the endorsement by the Borrower or any Subsidiary in the ordinary
course of business of negotiable instruments or documents for deposit or
collection.
"Guaranty Agreements" means the Subsidiary Guaranty and any other
Guaranty substantially in the form of the Subsidiary Guaranty executed by a
Guarantor.
"Harvey & Thompson" means Harvey & Thompson Limited (formerly known as
Cash America UK Limited), an English limited liability company and a Subsidiary
of the Borrower.
"Hedge Agreements" means any interest rate swap agreements, interest
cap agreements, interest rate collar agreements, or any similar agreements or
arrangements (including commodity exchange agreements), or foreign currency
hedge, exchange or similar agreements, of the Borrower or any Subsidiary
incurred in the ordinary course of business.
"Highest Lawful Rate" means at the particular time in question the
maximum rate of interest which, under Applicable Law, the Lenders are then
permitted to charge on the Obligation. If the maximum rate of interest which,
under Applicable Law, the Lenders are permitted to charge on the Obligation
shall change after the date hereof, the Highest Lawful Rate shall be
automatically increased or decreased, as the case may be, from time to time as
of the effective time of each change in the Highest Lawful Rate without notice
to the Borrower. For purposes of determining the Highest Lawful Rate under the
Applicable Law of the State of Texas, the applicable rate ceiling shall be (a)
the indicated rate ceiling described in and computed in accordance with the
provisions of Section (a)(1) of Art. 1.04, or (b) if the parties subsequently
contract as allowed by Applicable Law, the quarterly ceiling or the annualized
ceiling computed pursuant to Section (d) of Art. 1.04; provided, however, that
at any time the indicated rate ceiling, the quarterly ceiling or the annualized
ceiling shall be less than 18% per annum or more than 24% per annum, the
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<PAGE> 16
provisions of Sections (b)(1) and (2) of said Art. 1.04 shall control for
purposes of such determination, as applicable.
"Hostile Acquisition" means the acquisition of a voting interest in 5%
or more in any Person if such acquisition is not approved by the board of
directors, management or Persons owning, directly or indirectly, 50% or more of
the Voting Stock of such Person.
"Increased Advance Costs" has the meaning specified in Section 8.3
hereof.
"Indemnified Matters" has the meaning specified in Section 5.17(a)
hereof.
"Indemnitees" has the meaning specified in Section 5.17(a) hereof.
"Initial Pricing Period" means that period from the Agreement Date to
and including the Rate Adjustment Date.
"Interest Period" means the period beginning on the day any LIBOR
Advance is made and ending fourteen days (to the extent available), one, two,
three or six months thereafter (as the Borrower shall select); provided,
however, that all of the foregoing provisions are subject to the following:
(a) if any Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall be extended to
the next succeeding Business Day, unless, with respect to a LIBOR
Advance, the result of such extension would be to extend such Interest
Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Business Day;
(b) any Interest Period with respect to a LIBOR Advance
that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Business Day of a calendar month;
(c) the Borrower may not select any Interest Period which
ends after the Maturity Date;
(d) the Borrower may not select any Interest Period in
respect of LIBOR Advances having an aggregate amount less than
$500,000; and
(e) there shall be outstanding at any one time no more
than six Interest Periods in the aggregate.
"Investment" means any investment, whether by means of share purchase,
loan, advance, extension of credit, capital contribution or otherwise, in or to
a Person, the Guaranty of any
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indebtedness of a Person, or the subordination of any claim against a Person to
other indebtedness of such Person.
"Lender" means each financial institution shown on the signature pages
hereof so long as such financial institution maintains a portion of the
Commitment or is owed any part of the Obligation (including the Administrative
Agent in its individual capacity), and each Assignee that hereafter becomes
party hereto pursuant to Section 10.6 hereof.
"Leverage Ratio" means, for any date of calculation, the ratio of (a)
Consolidated Funded Debt as of such date to (b) the sum of (i) Consolidated
Funded Debt as of such date plus (ii) Consolidated Net Worth as of such date.
"LIBOR Advance" means a Revolving Credit Advance which the Borrower
requests to be made as a LIBOR Advance or which is continued as a LIBOR
Advance, in accordance with the provisions of Section 2.2 hereof.
"LIBOR Basis" means, with respect to each LIBOR Advance for each
Interest Period, a rate per annum equal to the lesser of (a) the Highest Lawful
Rate or (b) the sum of the LIBOR Rate plus the Applicable Margin.
"LIBOR Lending Office" means, with respect to a Lender, the office
designated as its LIBOR Lending Office on Schedule 1 attached hereto, and such
other office of the Lender or any of its affiliates hereafter designated by
notice to the Borrower and the Administrative Agent.
"LIBOR Rate" means, for any Interest Period (a) of one, two, three or
six months, the interest rate per annum (rounded upward to the nearest 1/16th
of one percent) determined by the Administrative Agent at approximately 11:00
a.m., Dallas time, two Business Days before the first day of such Interest
Period to be the offered quotations that appear on the Reuter's Screen LIBO
page for dollar deposits in the London interbank market for a length of time
approximately equal to the Interest Period for the LIBOR Advance sought by the
Borrower (If at least two such offered quotations appear on the Reuter's Screen
LIBO page, the LIBOR Rate shall be the arithmetic mean (rounded upward to the
nearest 1/16th of one percent) of such offered quotations, as determined by the
Administrative Agent. If the Reuter's Screen LIBO page is not available or has
been discontinued, the LIBOR Rate shall be the rate per annum that the
Administrative Agent determines to be the arithmetic mean (rounded as
aforesaid) of the per annum rates of interest at which deposits in dollars in
an amount approximately equal to the principal amount of, and for a length of
time approximately equal to the Interest Period for, the LIBOR Advance sought
by the Borrower are offered to the Administrative Agent in immediately
available funds in the London interbank market at 11:00 a.m., London time, on
the date which is two Business Days prior to the first day of an Interest
Period) and (b) of fourteen days, the Eurodollar option rate published by
Classer Marshall, Inc. (Telerate page 4833) at approximately 10:00 a.m.
(Dallas, Texas time), two Business Days before the first day of such Interest
Period in an amount approximately equal
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to the principal amount of, and for a length of time approximately equal to the
Interest Period for, the LIBOR Advance sought by the Borrower.
"Lien" means any lien, mortgage, security interest, tax lien, pledge,
encumbrance, conditional sale or title retention agreement, or any other
interest in property designed to secure the repayment of indebtedness, whether
arising by agreement or under any statute or law, or otherwise.
"Loan Papers" means this Agreement, the Notes, the Guaranty
Agreements, and any other document or agreement executed or delivered from time
to time by the Borrower, any Subsidiary of the Borrower or any other Person in
connection herewith or as security for all or any part of the Obligations.
"Material Adverse Effect" means any circumstance or event which (a)
could reasonably be expected to materially impair the validity, performance or
enforceability of any Loan Papers, (b) could reasonably be expected to be
material and adverse to the financial condition or business operations of the
Borrower and its Subsidiaries, as a whole, (c) could reasonably be expected to
impair the ability of the Borrower to fulfill its obligations under the Loan
Papers, (d) causes an Event of Default or (e) causes a Default which could
reasonably be expected to become an Event of Default.
"Maturity Date" means June 30, 2001, or the earlier date of
termination in whole of the Commitment pursuant to Section 2.6 or 7.2 hereof.
"Maximum Amount" means the maximum amount of interest which, under
Applicable Law, the Lenders are permitted to charge on the Obligation.
"New Subsidiary" has the meaning assigned to it in Section 5.15
hereof.
"Note Agreements" means, collectively, that certain (a) Note Agreement
dated May 6, 1993, entered into by and between the Borrower and Teachers and
(b) Note Agreement dated July 7, 1995, entered into by and between the Borrower
and Teachers.
"Notice of Borrowing" has the meaning specified in Section 2.2(a)
hereof.
"Note" means any Revolving Credit Note or Swing Line Note and "Notes"
means the Revolving Credit Notes and the Swing Line Notes.
"Obligation" means (a) all obligations of any nature (whether matured
or unmatured, fixed or contingent) of the Borrower, any Subsidiary or any other
Person to the Lenders under the Loan Papers as they may be amended from time to
time, (b) all obligations to any Lender under or in connection with any Hedge
Agreements entered into by the Borrower or any Subsidiary and any Lender or
Lenders, and (c) all obligations of the Borrower, any Subsidiary or any other
Person for losses, damages, expenses or any other liabilities of any kind that
any Lender may suffer by
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reason of a breach by the Borrower, any Subsidiary or any other Person of any
obligation, covenant or undertaking with respect to any Loan Paper.
"Other Taxes" has the meaning specified in Section 2.15(b) hereof.
"Participant" has the meaning specified in Section 10.6(c) hereof.
"Participation" has the meaning specified in Section 10.6(c) hereof.
"Payment Date" means the last day of the Interest Period for any LIBOR
Advance.
"Permitted Liens" means: (a) Liens (if any) granted to the Lenders to
secure the Obligation and any portion thereof; (b) pledges or deposits made to
secure payment of workers' compensation (or to participate in any fund in
connection with workers' compensation), unemployment insurance, pensions or
social security programs; (c) Liens imposed by mandatory provisions of law such
as for materialmen's, mechanics', warehousemen's and other like Liens arising
in the ordinary course of business, securing indebtedness whose payment is not
yet due, and landlords liens, whether arising through contract or by operation
of law, but only if the same are not yet due and payable or if the same are
being contested in good faith and as to which adequate reserves have been
provided; (d) Liens for taxes, assessments and governmental charges or levies
imposed upon a Person or upon such Person's income or profits or property, if
the same are not yet due and payable or if the same are being contested in good
faith and as to which adequate reserves have been provided; (e) good faith
deposits in connection with tenders, leases, real estate bids or contracts
(other than contracts involving the borrowing of money), pledges or deposits to
secure public or statutory obligations, deposits to secure (or in lieu of)
surety, stay, appeal or customs bonds and deposits to secure the payment of
taxes, assessments, custom duties or other similar charges; (f) encumbrances
consisting of zoning restrictions, easements, or other restrictions on the use
of real property, provided that such do not impair the use of such property for
the uses intended, and none of which is violated by existing or proposed
structures or land use; (g) purchase money Liens securing permitted purchase
money indebtedness described in Section 6.1(ii) hereof; or (h) Liens against
Temporary Cash Investments, to the extent that such Liens secure short-term
indebtedness permitted under item (xi) of Section 6.1 hereof.
"Person" means and includes an individual, corporation, partnership,
trust or unincorporated organization, or a government or any agency or
political subdivision thereof.
"Prime Rate" means, at any time, the prime interest rate announced or
published by the Administrative Agent from time to time as its reference rate
for the determination of interest rates for loans of varying maturities in
United States dollars to United States residents of varying degrees of
creditworthiness and being quoted at such time by the Administrative Agent as
its "prime rate;" it being understood that such rate may not be the lowest rate
of interest charged by the Administrative Agent.
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<PAGE> 20
"Private Placement Debt" means the indebtedness of the Borrower (and
Guaranty of Domestic Subsidiaries) in the aggregate original principal amount
of $30,000,000 under its senior notes designated "8.33% Senior Notes Due May 1,
2003", each payable in accordance with the respective terms of such notes and
the Note Agreements, and $20,000,000 under its senior notes designated "8.14%
Senior Notes Due 2007", each payable in accordance with the respective terms of
such notes and the Note Agreements.
"Quarterly Date" means the last Business Day of each March, June,
September and December, beginning June 30, 1996.
"Rate Adjustment Date" means the date which is three Business Days
after the date that the Lenders receive the financial statements of the
Borrower and its Consolidated Subsidiaries for the fiscal quarter ended June
30, 1996, as required pursuant to Section 5.1(a) hereof.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System from time to time in effect and shall include any
successor or other regulation relating to reserve requirements applicable to
member banks of the Federal Reserve System.
"Regulation G" means Regulation G of the Board of Governors of the
Federal Reserve System from time to time in effect and shall include any
successor or other regulation relating to reserve requirements applicable to
member banks of the Federal Reserve System.
"Regulation U" means Regulation U promulgated by the Board of
Governors of the Federal Reserve System, 12 C.F.R. Part 221, or any other
regulation hereafter promulgated by said Board to replace the prior Regulation
U and having substantially the same function.
"Regulatory Defect" means (a) any failure of the Borrower or any
Subsidiary to comply with any rules, regulations and other requirements as
contemplated in Section 4.18 hereof which would have or which would result in a
Material Adverse Effect, and/or (b) any unfavorable examination report received
by the Borrower or any Subsidiary from any regulatory authority or similar
Governmental Authorities regulating any of the businesses or activities in
which the Borrower or any Subsidiary is engaged, if such report would have a
Material Adverse Effect.
"Release Date" means the date on which the Notes have been paid, all
other portions of the Obligation due and owing have been paid and performed in
full, and the Commitment has been terminated.
"Restricted Payment" has the meaning assigned to it in Section 5.14(d)
hereof.
"Revolving Credit Advance" means an Advance made pursuant to Section
2.1(a) hereof.
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<PAGE> 21
"Revolving Credit Note" means any Promissory Note of the Borrower
evidencing Revolving Credit Advances hereunder, substantially in the form of
Exhibit A hereto, together with any extension, renewal or amendment thereof or
substitution therefor.
"Rights" means rights, remedies, powers and privileges.
"SEK" means the lawful currency of Sweden.
"Solvent" means, with respect to any Person, that the fair value of
the assets of such Person (both at fair valuation and at present fair saleable
value) is, on the date of determination, greater than the total amount of
liabilities of such Person as of such date and that, as of such date, such
Person is able to pay all liabilities of such Person as such liabilities mature
and such Person does not have unreasonably small capital with which to carry on
its business.
"Special Counsel" means the law firm of Donohoe, Jameson & Carroll,
P.C., or such other legal counsel as the Administrative Agent may select.
"Specified Percentage" means, as to any Lender, the percentage
indicated beside its name on the signature pages hereof, or if applicable,
specified in its most recent Assignment Agreement.
"Subsequent Pricing Period" means the period from and including the
date which is the first day following the end of the Initial Pricing Period to
the Maturity Date.
"Stock" means (a) in the case of any corporation, capital stock of any
class of such corporation (however designated) and warrants or options to
purchase such capital stock, (b) in the case of any partnership, partnership
interests of such partnership (however designated) and warrants or options to
purchase such partnership interests, and (c) in the case of any other entity,
equity interests of such entity (however designated) and warrants or options to
purchase such equity interests.
"Subsidiary" of the Borrower means any corporation, partnership, joint
venture, trust or estate of which (or in which) 50% or more of:
(a) the outstanding capital stock having voting power to
elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class
or classes of such corporation shall or might have voting power upon
the occurrence of any contingency),
(b) the interest in the capital or profits of such
partnership or joint venture, or
(c) the beneficial interest in such trust or estate,
is at the time directly or indirectly owned by the Borrower, by the Borrower
and one or more of its Subsidiaries or by one or more of the Borrower's
Subsidiaries; provided, however, before the
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<PAGE> 22
Borrower may form or acquire a Subsidiary which is not a corporation, the
Borrower shall provide written notice to the Lenders of its intent to form or
create such Subsidiary and the Lenders shall have consented in writing to the
formation or creation of such Subsidiary.
"Subsidiary Guaranty" means the Guaranty executed by each Guarantor
guaranteeing payment and performance of the Obligations, substantially in the
form of Exhibit C hereto, as such agreement may be amended, modified,
supplemented or restated from time to time.
"Swing Line Advance" means an Advance made pursuant to Section 2.1(b)
hereof.
"Swing Line Bank" means NationsBank of Texas, N.A. and any successor
thereto appointed in accordance with Section 9.1(b) hereof.
"Swing Line Facility" has the meaning specified in Section 2.1(b)
hereof.
"Swing Line Note" means the Swing Line Note of the Borrower payable to
the order of the Swing Line Bank, substantially in the form of Exhibit B
hereto, together with any extension, renewal or amendment thereof or
substitution therefor.
"Taxes" has the meaning specified in Section 2.15(a) hereof.
"Teachers" means Teachers Insurance and Annuity Association of
America.
"Temporary Cash Investment" means any of the following Investments:
(a) Investments in open market investment grade commercial paper, maturing
within 180 days after acquisition thereof, (b) Investments in marketable
obligations, maturing within 180 days after acquisition thereof, issued or
unconditionally guaranteed by the United States of America or an
instrumentality or agency thereof and entitled to the full faith and credit of
the United States of America, (c) Investments in money market funds that invest
solely in the types of Investments permitted under clauses (a) and (b) hereof,
(d) Investments in repurchase agreements of any financial institution or
brokerage firm acceptable to the Lenders which are fully secured by securities
described in clause (b) hereof, (e) short-term investments in investment grade
auction preferred stock, (f) certificates of deposit and time deposits
(including Eurodollar deposits) maturing within 180 days from the date of
deposit thereof which are either (i) federally insured or (ii) with a domestic
office of any national or state bank or trust company organized under the laws
of the United States of America or any state therein and having capital,
surplus and undivided profits of at least $100,000,000, (g) with respect to
Harvey & Thompson, certificates of deposit and other instruments substantially
equivalent to a certificate of deposit maturing within 180 days from the date of
acquisition and issued by a bank or trust company organized and located in the
United Kingdom having capital, surplus and undivided profits of at least
L.65,000,000, and (h) with respect to Subsidiaries organized under the laws of
Sweden, certificates of deposit and other instruments substantially equivalent
to a certificate of deposit maturing within 180 days from
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the date of acquisition and issued by a bank or trust company organized and
located in Sweden having an IBCA rating of long term debt of A+ or better.
"UCC" means the Uniform Commercial Code of Texas, as amended from time
to time.
"Voting Stock" means Stock which has voting power.
Section 1.2 Amendments and Renewals. Each definition of an
agreement in this Article 1 shall include such agreement as amended to date,
and as amended or renewed from time to time in accordance with its terms, but
only with the prior written consent of the Determining Lenders.
Section 1.3 Construction. The terms defined in this Article 1
(except as otherwise expressly provided in this Agreement) for all purposes
shall have the meanings set forth in Section 1.1 hereof, and the singular shall
include the plural, and vice versa, unless otherwise specifically required by
the context. All accounting terms used in this Agreement which are not
otherwise defined herein shall be construed in accordance with GAAP on a
consolidated basis for the Borrower and its Subsidiaries, unless otherwise
expressly stated herein.
ARTICLE 2
Advances
Section 2.1 The Advances.
(a) Revolving Credit Advances. Each Lender severally agrees, upon
the terms and subject to the conditions of this Agreement, to make Revolving
Credit Advances to the Borrower from time to time up to and including the
Maturity Date in an aggregate amount not to exceed an amount equal to its
Specified Percentage of the Commitment for the purposes set forth in Section
4.13 hereof. Notwithstanding the immediately preceding sentence, at no time
shall the sum of (i) the aggregate principal amount of Revolving Credit
Advances outstanding, plus (ii) the aggregate principal amount of Swing Line
Advances outstanding, exceed the Commitment. Subject to Section 2.9 hereof,
Revolving Credit Advances may be repaid and then reborrowed. Any Revolving
Credit Advance shall, at the option of the Borrower as provided in Section 2.2
hereof (and, in the case of LIBOR Advances, subject to availability and to the
provisions of Article 8 hereof), be made as a Base Rate Advance or a LIBOR
Advance; provided that there shall not be outstanding to any Lender, at any one
time, more than six LIBOR Advances. On the Maturity Date unless sooner paid as
provided herein, the outstanding Revolving Credit Advances shall be repaid in
full.
(b) The Swing Line Advances. The Borrower may request Swing Line
Bank to make, and Swing Line Bank shall, subject to the terms and conditions
hereinafter set forth, make loans ("Swing Line Advances") to Borrower from time
to time on any Business Day during the period
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<PAGE> 24
from the date hereof until the Maturity Date in an aggregate amount not to
exceed at any time outstanding the lesser of (i) $2,000,000 and (ii) the sum of
(A) the Commitment, minus (B) the aggregate principal amount of Revolving
Credit Advances then outstanding (the "Swing Line Facility"). Each Swing Line
Advance shall be in an amount not less than $100,000 and in integral multiples
of $50,000 in excess thereof, and shall be a Base Rate Advance. Within the
limits of the Swing Line Facility, Swing Line Advances may be repaid and then
reborrowed.
Section 2.2 Manner of Borrowing and Disbursement.
(a) In the case of Base Rate Advances, the Borrower, through an
Authorized Signatory, shall give the Administrative Agent at least one Business
Day irrevocable written notice, or irrevocable telephonic notice followed
immediately by written notice, in substantially the form of Exhibit E hereto (a
"Notice of Borrowing") (provided, however, that the Borrower's failure to
confirm any telephonic notice in writing shall not invalidate any notice so
given), of its intention to borrow or reborrow a Base Rate Advance hereunder.
Notice shall be given to the Administrative Agent prior to 11:00 a.m., Dallas,
Texas time, in order for such Business Day to count toward the minimum number
of Business Days required. Such Notice of Borrowing shall specify the
requested funding date, which shall be a Business Day, and the amount of the
proposed aggregate Base Rate Advances to be made by the Lenders.
(b) In the case of LIBOR Advances, the Borrower, through an
Authorized Signatory, shall give the Administrative Agent at least two Business
Days' irrevocable written notice for LIBOR Advances, or irrevocable telephonic
notice followed immediately by written notice (provided, however, that the
Borrower's failure to confirm any telephonic notice in writing shall not
invalidate any notice so given) pursuant to a Notice of Borrowing, of its
intention to borrow or continue a LIBOR Advance hereunder. Notice shall be
given to the Administrative Agent prior to 11:00 a.m., Dallas, Texas time, in
order for such Business Day to count toward the minimum number of Business Days
required. LIBOR Advances shall in all cases be subject to availability and to
Article 8 hereof. For LIBOR Advances, the Notice of Borrowing shall specify
the requested funding date, which shall be a Business Day, the amount of the
proposed aggregate LIBOR Advances to be made by the Lenders and the Interest
Period selected by the Borrower, provided that no such Interest Period shall
extend past the Maturity Date.
(c) In the case of Swing Line Advances, the Borrower, through an
Authorized Signatory, shall give the Swing Line Bank and the Administrative
Agent prior to 12:00 noon, Dallas, Texas time, on the date of any proposed
Swing Line Advance irrevocable written notice or irrevocable telephonic notice
followed immediately by written notice (provided, however, that the Borrower's
failure to confirm any telephonic notice in writing shall not invalidate any
notice so given), of its intention to borrow or reborrow a Swing Line Advance.
Such Notice of Borrowing shall specify the requested funding date, which shall
be a Business Day, and the amount of the proposed Swing Line Advance.
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(d) Subject to Sections 2.1 and 2.9 hereof, the Borrower shall
have the option (i) to convert at any time all or any part of the outstanding
Base Rate Advances to LIBOR Advances and all or any part of the outstanding
LIBOR Advances to Base Rate Advances or (ii) upon expiration of any Interest
Period applicable to a LIBOR Advance, to continue all or any portion of such
LIBOR Advance equal to $500,000 and integral multiples of $100,000 in excess of
that amount as a LIBOR Advance and the succeeding Interest Period(s) of such
continued LIBOR Advance shall commence on the last day of the Interest Period
of the LIBOR Advance to be continued; provided, however, (a) LIBOR Advances may
only be converted into Base Rate Advances on the expiration date of the
Interest Period applicable thereto and (b) notwithstanding anything in this
Agreement to the contrary, no outstanding Advance may be continued as, or
converted into, a LIBOR Advance when any Default or Event of Default has
occurred and is continuing. At least two Business Days prior to a proposed
conversion/continuation date, the Borrower, through an Authorized Signatory,
shall give the Administrative Agent irrevocable written notice, or irrevocable
telephonic notice followed immediately by written notice (provided, however,
that the Borrower's failure to confirm any telephonic notice in writing shall
not invalidate any notice so given), stating (i) the proposed
conversion/continuation date (which shall be a Business Day), (ii) the amount
of the Advance to be converted/continued, (iii) in the case of a conversion to,
or a continuation of, a LIBOR Advance, the requested Interest Period, and (iv)
in the case of a conversion of a Base Rate Advance to a LIBOR Advance or
continuation of a LIBOR Advance, stating that no Default or Event of Default
has occurred and is continuing. If the Borrower shall fail to give any notice
in accordance with this Section 2.2(d), the Borrower shall be deemed
irrevocably to have requested that such LIBOR Advance be converted to a Base
Rate Advance in the same principal amount. Notice shall be given to the
Administrative Agent prior to 11:00 a.m., Dallas, Texas time, in order for such
Business Day to count toward the minimum number of Business Days required.
(e) The aggregate amount of Base Rate Advances to be made by the
Lenders on any day shall be in a principal amount which is at least $500,000
and which is an integral multiple of $100,000; provided, however, that such
amount may equal the unused amount of the Commitment. The aggregate amount of
LIBOR Advances having the same Interest Period and to be made by the Lenders on
any day shall be in a principal amount which is at least $500,000 and which is
an integral multiple of $100,000.
(f) The Administrative Agent shall promptly notify the Lenders of
each notice (other than with respect to a Swing Line Advance) received from the
Borrower pursuant to this Section. Each Lender shall, not later than 1:00
p.m., Dallas, Texas time, on the date of any Revolving Credit Advance, deliver
to the Administrative Agent, at its address set forth herein, such Lender's
Specified Percentage of such Revolving Credit Advance in immediately available
funds in accordance with the Administrative Agent's instructions. Prior to
2:00 p.m., Dallas, Texas time, on the date of any Revolving Credit Advance
hereunder, the Administrative Agent shall, subject to satisfaction of the
conditions set forth in Article 3, disburse the amounts made available to the
Administrative Agent by the Lenders by (i) transferring such amounts by wire
transfer pursuant to the Borrower's instructions, or (ii) in the absence of
such instructions, crediting such amounts
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to the account of the Borrower maintained with the Administrative Agent. All
Revolving Credit Advances shall be made by each Lender according to its
Specified Percentage.
(g) The Swing Line Bank shall, not later than 1:30 p.m., Dallas,
Texas time, on the date of any Swing Line Advance, deliver to the
Administrative Agent at its address set forth herein, the amount of such Swing
Line Advance in immediately available funds in accordance with the
Administrative Agent's instructions. Prior to 2:00 p.m., Dallas, Texas time,
on the date of any Swing Line Advance, the Administrative Agent shall, subject
to the conditions set forth in Article 3, disburse the amount made available to
the Administrative Agent by the Swing Line Bank by (i) transferring such
amounts by wire transfer pursuant to the Borrower's instructions or (ii) in the
absence of such instructions, crediting such amounts to the account of the
Borrower maintained with the Administrative Agent. Forthwith upon demand by
the Swing Line Bank and in any event upon the making of the request or the
granting of the consent specified by Section 7.2 to authorize the
Administrative Agent to declare the Advances due and payable pursuant to the
provisions of Section 7.2, each Lender, including the Swing Line Bank,
notwithstanding the failure of the Borrower at such time to satisfy each
condition specified in Article 3, but provided that an Event of Default of the
type specified in Section 7.1(g) or Section 7.1(h) has not occurred, shall make
by 12:00 noon (Dallas, Texas time) on the first Business Day following receipt
by such Lender of notice from the Swing Line Bank, a Revolving Credit Advance
which is a Base Rate Advance in an amount equal to the product of (i) the
Specified Percentage of such Lender times (ii) the aggregate outstanding
principal amount of the Swing Line Advances. The proceeds of such Revolving
Credit Advances shall be applied by the Administrative Agent to repay the
outstanding Swing Line Advance. In the event of an occurrence of an Event of
Default of the type specified in Section 7.1(g) or Section 7.1(h), the Swing
Line Bank shall be deemed to have sold and transferred to each Lender, and each
Lender shall be deemed to have purchased and received from the Swing Line Bank,
in each case irrevocably and without any further action by any party, an
unlimited interest and participation in the Swing Line Advances in an aggregate
amount equal to the product of (i) the Specified Percentage of such Lender
times (ii) the aggregate outstanding principal amount of the Swing Line
Advances.
Section 2.3 Interest.
(a) On Base Rate Advances.
(i) The Borrower shall pay interest on the outstanding
unpaid principal amount of each Base Rate Advance, from the date such
Advance is made until it is due (whether at maturity, by reason of
acceleration, by scheduled reduction, or otherwise) or repaid, at a
rate per annum equal to the Base Rate Basis for such Base Rate Advance
as in effect from time to time provided that interest on such Base
Rate Advance shall not exceed the Highest Lawful Rate. If at any time
the Base Rate Basis would otherwise exceed the Highest Lawful Rate,
interest payable on such Base Rate Advance shall be limited to the
Highest Lawful Rate, but the Base Rate Basis shall not thereafter be
reduced below the Highest Lawful Rate until the total amount
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of interest accrued on such Advance equals the amount of interest that
would have accrued if the Base Rate Basis had been in effect at all
times.
(ii) Interest on each Base Rate Advance shall be computed
on the basis of a year of 365 or 366 days, as applicable, for the
number of days actually elapsed, and shall be payable in arrears on
each Quarterly Date and on the Maturity Date.
(b) On LIBOR Advances.
(i) The Borrower shall pay interest on the unpaid
principal amount of each LIBOR Advance, from the date such Advance is
made until it is due (whether at maturity, by reason of acceleration,
by scheduled reduction, or otherwise) or repaid, at a rate per annum
equal to the LIBOR Basis for such Advance. The Administrative Agent
shall determine the LIBOR Basis on the second Business Day prior to
the applicable funding date and shall notify the Borrower and the
Lenders of such LIBOR Basis.
(ii) Subject to Section 10.9 hereof, interest on each
LIBOR Advance shall be computed on the basis of a 360-day year for the
actual number of days elapsed, and shall be payable in arrears on the
applicable Payment Date and on the Maturity Date; provided, however,
that if the Interest Period for such Advance exceeds three months,
interest shall also be due and payable in arrears on the three-month
anniversary of the first day of such Interest Period.
(c) On Swing Line Advances.
(i) The Borrower shall pay interest on the outstanding
unpaid principal amount of each Swing Line Advance, from the date such
Advance is made until it is due (whether at maturity, by reason of
acceleration, by scheduled reduction, or otherwise) or repaid, at a
rate per annum equal to the Base Rate Basis for such Swing Line
Advance as in effect from time to time provided that interest on such
Swing Line Advance shall not exceed the Highest Lawful Rate. If at
any time the Base Rate Basis would otherwise exceed the Highest Lawful
Rate, interest payable on such Swing Line Advance shall be limited to
the Highest Lawful Rate, but the Base Rate Basis shall not thereafter
be reduced below the Highest Lawful Rate until the total amount of
interest accrued on such Advance equals the amount of interest that
would have accrued if the Base Rate Basis had been in effect at all
times.
(ii) Interest on each Swing Line Advance shall be computed
on the basis of a year of 365 or 366 days, as applicable, for the
number of days actually elapsed, and shall be payable in arrears on
each Quarterly Date and on the Maturity Date.
(d) Interest if No Notice of Selection of Interest Rate Basis. If
the Borrower fails to give the Administrative Agent timely notice of its
selection of a LIBOR Basis or an Interest Period for a LIBOR Advance, or if for
any reason a determination of a LIBOR Basis for any Advance is not
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timely concluded due to the fault of the Borrower, the appropriate Base Rate
Basis shall apply to such Advance.
(e) Interest After an Event of Default. (i) After an Event of
Default (other than an Event of Default specified in Section 7.1(g) or 7.1(h)
hereof) and during any continuance thereof, at the option of the Determining
Lenders, and (ii) after an Event of Default specified in Section 7.1(g) or
7.1(h) hereof and during any continuance thereof, automatically and without any
action by the Administrative Agent or any Lender, the Obligations shall bear
interest at a rate per annum equal to the Default Rate, and which shall be
computed on a basis of 365 or 366 days, as applicable, for the actual number of
days elapsed. Such interest shall be payable on the earlier of demand or the
Maturity Date, and shall accrue until the earlier of (i) waiver or cure (to the
reasonable satisfaction of the Determining Lenders) of the applicable Event of
Default, (ii) agreement by the Lenders to rescind the charging of interest at
the Default Rate, or (iii) payment in full of the Obligations. The Lenders
shall not be required to accelerate the maturity of the Advances or to exercise
any other rights or remedies under the Loan Papers to charge interest at the
Default Rate. The Lenders will give the Borrower prior notice of the decision
to charge interest at the Default Rate, unless the Default Rate is charged as a
result of the occurrence of an Event of Default specified in Section 7.1(g) or
7.1(h) hereof.
Section 2.4 Fees.
(a) Closing Fee. Subject to Section 10.9 hereof, the Borrower
agrees to pay to the Administrative Agent, for the account of the Lenders, a
closing fee equal to 0.375% of each Lender's portion of the Commitment (the
"Closing Fee"). The Closing Fee shall be payable on the date of the initial
Advance, fully earned when due and, subject to Section 10.9 hereof,
nonrefundable when paid.
(b) Commitment Fee. Subject to Section 10.9 hereof, the Borrower
agrees to pay to the Administrative Agent, for the account of the Lenders, a
commitment fee (the "Commitment Fee") on the average daily unused portion of
the Commitment (computed with respect to (i) the Swing Line Bank as the product
of the Swing Line Bank's Specified Percentage times the Commitment minus the
Revolving Credit Advances and Swing Line Advances made by the Swing Line Bank
and (ii) each other Lender as the product of such Lender's Specified Percentage
times the Commitment minus the Revolving Credit Advances made by such Lender),
commencing on the Agreement Date and continuing through the Maturity Date, at a
per annum percentage of 0.25%, payable quarterly in arrears on each Quarterly
Date and on the Maturity Date. The Commitment Fee shall be computed on a basis
of 365 or 366 days, as applicable, for the number of days actually elapsed.
Section 2.5 Prepayment.
(a) Voluntary Prepayments. Upon three Business Days' prior
telephonic notice (to be promptly followed by written notice) by an Authorized
Signatory to the Administrative Agent,
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LIBOR Advances may be voluntarily prepaid, but only so long as the Borrower
concurrently reimburses the Lenders for any Consequential Loss in accordance
with Section 2.9 hereof. The principal amount of any Base Rate Advance may be
prepaid in full or in part at any time, without penalty. Any notice of
prepayment shall be irrevocable.
(b) Mandatory Prepayment. On or before the date of any reduction
of the Commitment, the Borrower shall prepay outstanding Advances in an amount
necessary to reduce the same to an amount less than or equal to the Commitment
as so reduced. The Borrower shall first prepay all Base Rate Advances which
are not Swing Line Advances, second prepay all Swing Line Advances and shall
thereafter prepay LIBOR Advances. To the extent that any prepayment requires
that a LIBOR Advance be repaid on a date other than the last day of its
Interest Period, the Borrower shall reimburse each Lender in accordance with
Section 2.9 hereof. To the extent that the outstanding Advances exceed the
Commitment after any reduction thereof, the Borrower shall repay any such
excess amount and all accrued interest thereon on the date of such reduction.
(c) Prepayments, Generally. Any prepayment of an Advance (other
than a Base Rate Advance) shall be accompanied by interest accrued on the
principal amount being prepaid. Any voluntary partial prepayment of a Base
Rate Advance which is not a Swing Line Advance shall be in a principal amount
of $100,000 or an integral multiple thereof. Any voluntary partial prepayment
of a LIBOR Advance shall be in a principal amount of $500,000 or an integral
multiple of $100,000 if in excess thereof. Any voluntary partial prepayment of
a Swing Line Advance shall be in a principal amount of $50,000 or an integral
multiple thereof. All voluntary prepayments shall be applied in the order
directed in writing by the Borrower to the Administrative Agent. If the
Borrower fails to so direct the Administrative Agent or if the prepayment
occurs during the occurrence and continuance of an Event of Default, such
prepayment shall be applied in the inverse order of maturity.
Section 2.6 Reduction of Commitment.
(a) Voluntary Reduction. The Borrower shall have the right, upon
not less than 10 Business Days' notice (provided no notice shall be required
for a termination in whole of the Commitment) by an Authorized Signatory to the
Administrative Agent (if telephonic, to be confirmed by telex or in writing on
or before the date of reduction or termination), which shall promptly notify
the Lenders, to terminate or reduce the Commitment, in whole or in part. Each
partial termination shall be in an aggregate amount which is at least
$1,000,000 and which is an integral multiple of $100,000, and no voluntary
reduction in the Commitment shall cause any LIBOR Advance to be repaid prior to
the last day of its Interest Period.
(b) Mandatory Reduction. On the Maturity Date, the Commitment
shall automatically reduce to zero.
(c) General Requirements. Upon any reduction of the Commitment
pursuant to this Section, the Borrower shall immediately make a prepayment of
applicable Advances in accordance with
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Section 2.5(b) hereof. The Borrower shall reimburse each Lender for any
Consequential Loss incurred by each Lender in connection with any such payment,
as set forth in Section 2.9 hereof to the extent applicable. The Borrower
shall not have any right to rescind any termination or reduction. Once
reduced, the Commitment may not be increased or reinstated.
Section 2.7 Non-Receipt of Funds by the Administrative Agent.
Unless the Administrative Agent shall have been notified by a Lender prior to
the date of any proposed Revolving Credit Advance (which notice shall be
effective upon receipt) that such Lender does not intend to make the proceeds
of such Revolving Credit Advance available to the Administrative Agent, the
Administrative Agent may assume that such Lender has made such proceeds
available to the Administrative Agent on such date, and the Administrative
Agent may in reliance upon such assumption (but shall not be required to) make
available to the Borrower a corresponding amount. If such corresponding amount
is not in fact made available to the Administrative Agent by such Lender, the
Administrative Agent shall, without prejudice to the Borrower's rights against
such Lender, be entitled to recover such amount on demand from such Lender (or,
if such Lender fails to pay such amount forthwith upon such demand, from the
Borrower) together with interest thereon in respect of each day during the
period commencing on the date such amount was available to the Borrower and
ending on (but excluding) the date the Administrative Agent receives such
amount from the Lender or the Borrower, as the case may be, at a per annum rate
equal to the lesser of (i) the Highest Lawful Rate or (ii)(A) in the case of
such Lender, the Federal Funds Rate or (B) in the case of the Borrower, the
interest rate applicable to such Revolving Credit Advance. No Lender shall be
liable for any other Lender's failure to fund a Revolving Credit Advance
hereunder.
Section 2.8 Payment of Principal of Advances. To the extent not
otherwise required to be paid earlier as provided herein, the principal amount
of the Advances, all accrued interest and fees thereon, and all other
Obligations related thereto, shall be due and payable in full on the Maturity
Date.
Section 2.9 Reimbursement. Whenever any Lender shall sustain or
incur any losses or reasonable out-of-pocket expenses in connection with (a)
failure by the Borrower to borrow any LIBOR Advance after having given notice
of its intention to borrow in accordance with Section 2.2 hereof (whether by
reason of the Borrower's election not to proceed or the non-fulfillment of any
of the conditions set forth in Article 3 hereof), or (b) any prepayment for any
reason of any LIBOR Advance in whole or in part, the Borrower agrees to pay to
any such Lender, upon its demand, an amount equal to the Consequential Loss of
such Lender related thereto, subject to Section 10.9 hereof. Such Lender's
good faith determination of the amount of the Consequential Loss, calculated in
its usual fashion, absent manifest error, shall be binding and conclusive.
Notwithstanding the above, the Borrower's obligation to pay such amount is
conditional on the receipt from such Lender of a certificate setting forth the
amount to be paid to it by the Borrower hereunder and calculations therefor, as
well as the assumptions and reasoning underlying such calculations.
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Section 2.10 Manner of Payment.
(a) Each payment (including prepayments) by the Borrower of the
principal of or interest on the Advances, fees, and any other amount owed under
this Agreement or any other Loan Paper shall be made not later than 12:00 noon
(Dallas, Texas time) on the date specified for payment under this Agreement to
the Administrative Agent at the Administrative Agent's office, in lawful money
of the United States of America constituting immediately available funds.
(b) If any payment under this Agreement or any other Loan Paper
shall be specified to be made upon a day which is not a Business Day, it shall
be made on the next succeeding day which is a Business Day, unless such
Business Day falls in another calendar month, in which case payment shall be
made on the preceding Business Day. Any extension or reduction of time shall
in such case be included in computing interest and fees, if any, in connection
with such payment.
(c) The Borrower agrees to pay principal, interest, fees and all
other amounts due under the Loan Papers without deduction for set-off or
counterclaim or any deduction whatsoever.
(d) If some but less than all amounts due from the Borrower are
received by the Administrative Agent, the Administrative Agent shall apply such
amounts in the following order of priority: (i) to the payment of the
Administrative Agent's expenses incurred on behalf of the Lenders then due and
payable, if any; (ii) to the payment of all other fees and amounts then due and
payable under the Loan Papers; (iii) to the payment of interest then due and
payable on the Advances; and (iv) to the payment of principal then due and
payable on the Advances.
(e) Each payment by the Borrower in respect of obligations
relating to the Revolving Credit Advance (whether for principal, interest, fees
or otherwise) shall be made to the Administrative Agent for the account of the
Lenders pro rata in accordance with their respective Specified Percentages.
Each payment by the Borrower in respect of obligations relating to Swing Line
Advances (whether for principal, interest, fees or otherwise) shall be made to
the Administrative Agent for the account of the Swing Line Bank.
Notwithstanding anything in this Section 2.10(e) or any other provision of this
Agreement or any other Loan Paper to the contrary, any payment by the Borrower
in respect of any Advances after acceleration of the Advances pursuant to
Section 7.2 or any monies received by the Administrative Agent as a result of
the exercise of remedies under any Loan Papers after acceleration of the
Advances pursuant to Section 7.2 shall be distributed pro rata to each Lender
based on the percentage that the outstanding Advances owed to such Lender bears
to the aggregate Advances owed to all Lenders.
Section 2.11 LIBOR Lending Offices. Each Lender's initial LIBOR
Lending Office is set forth opposite its name in Schedule 1 attached hereto.
Each Lender shall have the right at any time and from time to time to designate
a different office of itself or of any Affiliate as such Lender's LIBOR Lending
Office, and to transfer any outstanding LIBOR Advance to such LIBOR Lending
Office. No such designation or transfer shall result in any liability on the
part of the Borrower for increased costs or expenses resulting solely from such
designation or transfer (except
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any such transfer which is made by a Lender pursuant to Section 8.2 or 8.3
hereof, or otherwise for the purpose of complying with Applicable Law).
Increased costs for expenses resulting from a change in law occurring
subsequent to any such designation or transfer shall be deemed not to result
solely from such designation or transfer.
Section 2.12 Sharing of Payments. Any Lender obtaining a payment
(whether voluntary or involuntary, due to the exercise of any right of set-off,
or otherwise) on account of its Revolving Credit Advances (other than pursuant
to Sections 2.15, 8.3 or 8.5), in excess of its Specified Percentage of all
payments made by the Borrower with respect to Revolving Credit Advances shall
purchase from each other Lender such participation in the Revolving Credit
Advances made by such other Lender as shall be necessary to cause such
purchasing Lender to share the excess payment pro rata according to Specified
Percentages with each other Lender; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, the purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest unless the purchasing Lender is
obligated to pay interest on the payment received, in which case each of the
other Lenders shall pay its pro rata share of such interest. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section, to the fullest extent permitted by law, may exercise
all its rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
Section 2.13 Calculation of Rates. The provisions of this
Agreement relating to calculation of the LIBOR Rate are included only for the
purpose of determining the rate of interest or other amounts to be paid
hereunder that are based upon such rate, it being understood that each Lender
shall be entitled to fund and maintain its funding of all or any part of a
LIBOR Advance as it sees fit.
Section 2.14 Booking Loans. Any Lender may make, carry or
transfer Advances at, to or for the account of any of its branch offices or the
office of any Affiliate of such Lender.
Section 2.15 Taxes.
(a) Any and all payments by the Borrower hereunder shall be made,
in accordance with Section 2.10, free and clear of, and without deduction for,
any and all present or future taxes, levies, imposts, deductions, charges and
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Administrative Agent, taxes imposed on, based upon or
measured by its income, net worth or capital, and franchise taxes, doing
business taxes or minimum taxes imposed on it, (i) by the jurisdiction under
the laws of which such Lender or the Administrative Agent (as the case may be)
is organized and in which it has its applicable lending office or any political
subdivision thereof; (ii) by any other jurisdiction, or any political
subdivision thereof, other than those imposed by reason of (A) an asserted
relation of such jurisdiction to the transactions contemplated by this
Agreement, (B) the activities of the Borrower in such jurisdiction, or (C) the
activities in connection with the transactions contemplated by this
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<PAGE> 33
Agreement of a Lender or the Administrative Agent; (iii) by reason of failure
by the Lender or the Administrative Agent to comply with the requirements of
paragraph (e) of this Section 2.15; and (iv) in the case of any Lender, any
Taxes in the nature of transfer, stamp, recording or documentary taxes
resulting from a transfer (other than as a result of foreclosure) by such
Lender of all or any portion of its interest in this Agreement, the Notes or
any other Loan Papers (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder to any Lender or the Administrative
Agent, (x) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.15) such Lender or the Administrative Agent
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (y) the Borrower shall make such deductions
and (z) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with Applicable Law.
(b) In addition, the Borrower agrees to pay any and all stamp and
documentary taxes and any and all other excise and property taxes, charges and
similar levies (other than described in clause (iv) of the first sentence of
Section 2.15(a)) that arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Paper (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and the Administrative
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.15) paid by such Lender or the Administrative
Agent (as the case may be) and all liabilities (including penalties, additions
to tax, interest and reasonable expenses) arising therefrom or with respect
thereto whether or not such Taxes or Other Taxes were correctly or legally
asserted, other than penalties, additions to tax, interest and expenses arising
as a result of gross negligence on the part of such Lender or the
Administrative Agent, provided, however, that the Borrower shall have no
obligation to indemnify such Lender or the Administrative Agent unless and
until such Lender or the Administrative Agent shall have delivered to the
Borrower a certificate setting forth in reasonable detail the basis of the
Borrower's obligation to indemnify such Lender or the Administrative Agent
pursuant to this Section 2.15. This indemnification shall be made within 30
days from the date such Lender or the Administrative Agent (as the case may be)
makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower will furnish to the Administrative Agent the original or a certified
copy of a receipt evidencing payment thereof. If no Taxes are payable in
respect of any payment hereunder, the Borrower will furnish to the
Administrative Agent a certificate from each appropriate taxing authority, or
an opinion of counsel reasonably acceptable to the Administrative Agent, in
either case stating that such payment is exempt from or not subject to Taxes,
provided, however, that such certificate or opinion need only be given if: (i)
the Borrower makes any payment from any account located outside the United
States, or (ii) the payment is made by a payor that is not a United States
Person. For purposes
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of this Section 2.15 the terms "United States" and "United States Person" shall
have the meanings set forth in Section 7701 of the Code.
(e) Each Lender which is not a United States Person hereby agrees
that:
(i) it shall, no later than the Agreement Date (or, in
the case of a Lender which becomes a party hereto pursuant to Section
10.6 after the Agreement Date, the date upon which such Lender becomes
a party hereto) deliver to the Borrower through the Administrative
Agent, with a copy to the Administrative Agent:
(A) if any lending office is located in the United States
of America, two (2) accurate and complete signed
originals of Internal Revenue Service Form 4224 or
any successor thereto ("Form 4224"); and
(B) if any lending office is located outside the United
States of America, two (2) accurate and complete
signed originals of Internal Revenue Service Form
1001 or any successor thereto ("Form 1001");
in each case indicating that such Lender is on the date of delivery
thereof entitled to receive payments of principal, interest and fees
for the account of such lending office or lending offices under this
Agreement free from withholding of United States Federal income tax;
(ii) if at any time such Lender changes its lending office
or lending offices or selects an additional lending office it shall,
at the same time or reasonably promptly thereafter but only to the
extent the forms previously delivered by it hereunder are no longer
effective, deliver to the Borrower through the Administrative Agent,
with a copy to the Administrative Agent, in replacement for the forms
previously delivered by it hereunder:
(A) if such changed or additional lending office is
located in the United States of America, two (2)
accurate and complete signed originals of Form 4224;
or
(B) otherwise, two (2) accurate and complete signed
originals of Form 1001,
in each case indicating that such Lender is on the date of delivery
thereof entitled to receive payments of principal, interest and fees
for the account of such changed or additional lending office under
this Agreement free from withholding of United States Federal income
tax;
(iii) it shall, before or promptly after the occurrence of
any event (including the passing of time but excluding any event
mentioned in clause (ii) above) requiring a change in the most recent
Form 4224 or Form 1001 previously delivered by such Lender and if the
delivery of the same be lawful, deliver to the Borrower through the
Administrative Agent with a copy to the Administrative Agent, two (2)
accurate and complete original signed copies of Form 4224 or Form 1001
in replacement for the forms previously delivered by such Lender;
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(iv) it shall, promptly upon the request of the Borrower
to that effect, deliver to the Borrower such other forms or similar
documentation as may be required from time to time by any applicable
law, treaty, rule or regulation in order to establish such Lender's
tax status for withholding purposes;
(v) it shall notify the Borrower within 30 days after any
event (including an amendment to, or a change in any Applicable Law or
in the written interpretation thereof by any regulatory authority or
any judicial authority, or by any ruling applicable to such Lender of
any governmental authority charged with the interpretation or
administration of any law) shall occur that results in such Lender no
longer being capable of receiving payments without any deduction or
withholding of United States federal income tax; and
(vi) such Lender shall not be considered to have complied
with paragraph (e) of this Section 2.15 to the extent that the forms
described in paragraph (e)(i)(B) of this Section 2.15 indicate that
such Lender is not entitled to receive payments under this Agreement
free of withholding of United States Federal Income Tax.
(f) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.15 shall survive the payment in full of principal
and interest hereunder.
(g) Any Lender claiming any additional amounts payable pursuant to
this Section 2.15 shall use its reasonable best efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its lending office, if the making of such a change would avoid
the need for, or reduce the amount of, any such additional amounts which may
thereafter accrue and would not, in the reasonable judgment of such Lender, be
materially disadvantageous to such Lender.
(h) Each Lender (and the Administrative Agent with respect to
payments to the Administrative Agent for its own account) agrees that (i) it
will take all reasonable actions by all usual means to maintain all exemptions,
if any, available to it from United States withholding taxes (whether available
by treaty, existing administrative waiver, by virtue of the location of any
Lender's lending office) and (ii) otherwise cooperate with the Borrower to
minimize amounts payable by the Borrower under this Section 2.15; provided,
however, the Lenders and the Administrative Agent shall not be obligated by
reason of this Section 2.15(h) to contest the payment of any Taxes or Other
Taxes or to disclose any information regarding its tax affairs or tax
computations or reorder its tax or other affairs or tax or other planning.
Subject to the foregoing, to the extent the Borrower pays sums pursuant to this
Section 2.15 and the Lender or the Administrative Agent receives a refund of
any or all of such sums, such refund shall be applied to reduce any amounts
then due and owing under this Agreement or, to the extent that no amounts are
due and owing under this Agreement at the time such refunds are received, the
party receiving such refund shall promptly pay over all such refunded sums to
the Borrower, provided that no Default or Event of Default is in existence at
such time.
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ARTICLE 3
Conditions Precedent
Section 3.1 Conditions Precedent to the Effectiveness of this
Agreement. This Agreement shall be effective upon receipt by the
Administrative Agent of the following, in form and substance satisfactory to
each Lender, with a copy (except for the Notes) for each Lender, or
satisfaction of the following:
(a) a loan certificate of the Borrower certifying as to the
accuracy of its representations and warranties in the Loan Papers, certifying
that no Default or Event of Default has occurred, and including a certificate
of incumbency with respect to each Authorized Signatory, and including (i) a
copy of the articles of incorporation of the Borrower, certified to be true,
complete and correct by the secretary of state of its state of incorporation
(or a certification that there has been no change thereto from such form
provided in connection with the Existing Credit Agreement), (ii) a copy of the
by-laws of the Borrower, as in effect on the Agreement Date (or a certification
that there has been no change thereto from such form provided in connection
with the Existing Credit Agreement), and (iii) a copy of the resolutions of the
Borrower authorizing it to execute, deliver and perform this Agreement, the
Notes and the other Loan Papers to which it is a party;
(b) a certificate of an officer acceptable to the Lenders of each
Guarantor, certifying as to the incumbency of the officers signing the Loan
Papers to which it is a party, and including (i) a copy of its articles of
incorporation (or articles of partnership or other appropriate governing
documents), certified as true, complete and correct by the secretary of state
of its state of incorporation or organization (or a certification that there
has been no change thereto from such form provided in connection with the
Existing Credit Agreement), (ii) a copy of its by-laws (or partnership
agreement or other appropriate governing document), as in effect on the
Agreement Date (or a certification that there has been no change thereto from
such form provided in connection with the Existing Credit Agreement), and (iii)
a copy of the resolutions authorizing it to execute, deliver and perform the
Loan Papers to which it is a party;
(c) duly executed Revolving Credit Notes, payable to the order of
each Lender and in an amount for each Lender equal to its Specified Percentage
of the Commitment;
(d) opinions of general counsel to the Borrower and the
Subsidiaries addressed to the Lenders and in form and substance satisfactory to
the Lenders, dated the Agreement Date, and covering such matters incident to
the transactions contemplated hereby as the Administrative Agent or Special
Counsel may reasonably request;
(e) reimbursement for the Administrative Agent for Special
Counsel's reasonable fees and expenses rendered through the Agreement Date;
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(f) evidence that all corporate or other proceedings of the
Borrower and the Subsidiaries taken in connection with the transactions
contemplated by this Agreement and the other Loan Papers shall be reasonably
satisfactory in form and substance to the Lenders and Special Counsel; and the
Lenders shall have received copies of all documents or other evidence which the
Administrative Agent, Special Counsel or any Lender may reasonably request in
connection with such transactions;
(g) the Closing Fee as required pursuant to Section 2.4(a);
(h) the completed Guaranty Agreements duly executed by the
Guarantors;
(i) the duly executed Swing Line Note, payable to the order of the
Swing Line Bank in the principal amount of $2,000,000; and
(j) in form and substance satisfactory to the Lenders and Special
Counsel, such other documents, instruments and certificates as the
Administrative Agent or any Lender may reasonably require in connection with
the transactions contemplated hereby, including without limitation documents
regarding the status, organization or authority of the Borrower or any
Subsidiary or any other Person executing a Loan Paper, and the enforceability
of the Obligation.
Section 3.2 Conditions Precedent to All Advances. The obligation
of each Lender to make each Advance hereunder (including the initial Advance)
hereunder is subject to fulfillment of the following conditions immediately
prior to or contemporaneously with each such Advance:
(a) With respect to Advances, all of the representations and
warranties of the Borrower under this Agreement, which, pursuant to Section
4.22 hereof, are made at and as of the time of such Advance, shall be true and
correct at such time in all material respects, both before and after giving
effect to the application of the proceeds of the Advance;
(b) The incumbency of the Authorized Signatories shall be as
stated in the certificate of incumbency delivered in the Borrower's loan
certificate pursuant to Section 3.1(a) or as subsequently modified and
reflected in a certificate of incumbency delivered to the Administrative Agent.
The Lenders may, without waiving this condition, consider it fulfilled and a
representation by the Borrower made to such effect if no written notice to the
contrary, dated on or before the date of such Advance, is received by the
Administrative Agent from the Borrower prior to the making of such Advance;
(c) There shall not exist a Default or Event of Default hereunder;
(d) The aggregate Advances, after giving effect to such proposed
Advance, shall not exceed the maximum principal amount then permitted to be
outstanding hereunder; and
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(e) The Administrative Agent shall have received all such other
certificates, reports, statements, opinions of counsel or other documents as
the Administrative Agent or any Lender may reasonably request;
provided, however, that the obligation of each Lender to make a Revolving
Credit Advance pursuant to Section 2.2(g) shall be absolute and unconditional
and shall not be affected by any circumstances, including, without limitation,
(i) the occurrence of any Default or Event of Default (other than an Event of
Default of the type specified in Section 7.1(g) or 7.1(h)), (ii) the failure of
the Borrower to satisfy any condition set forth in this Section 3.2 at the time
of such Revolving Credit Advance, or (iii) any other circumstance, happening or
event whatsoever.
Section 3.3 Conditions Precedent to Conversions and
Continuations. The obligation of the Lenders to convert any existing Base Rate
Advance into a LIBOR Advance or to continue any existing LIBOR Advance is
subject to the condition precedent that on the date of such conversion or
continuation no Default or Event of Default shall have occurred and be
continuing or would result from the making of such conversion or continuation.
The acceptance of the benefits of each such conversion and continuation shall
constitute a representation and warranty by the Borrower to each of the Lenders
that no Default or Event of Default shall have occurred and be continuing or
would result from the making of such conversion or continuation.
Section 3.4 Existing Credit Agreement. Upon execution of this
Agreement by all parties hereto and satisfaction of all conditions set forth in
Sections 3.1 and 3.2 hereof, the Existing Credit Agreement shall be deemed
amended and restated as provided herein and the indebtedness under the Existing
Credit Agreement shall not be novated by this Agreement and all obligations
under the Existing Credit Agreement shall remain outstanding and shall be
subject to the terms and provisions of this Agreement.
ARTICLE 4
Representations and Warranties
To induce the Lenders to make Revolving Credit Advances, to induce the
Swing Line Bank to make the Swing Line Advances, the Borrower represents and
warrants that:
Section 4.1 Organization and Good Standing. The Borrower and
each of its Subsidiaries which is a corporation is duly organized and existing
in good standing under the laws of the jurisdiction of its incorporation, is
duly qualified as a foreign corporation and in good standing in all
jurisdictions in which it is doing business and has the corporate power and
authority to own its properties and assets and to transact the business in
which it is engaged and is qualified in those jurisdictions wherein it proposes
to transact business in the future, if failure to be so qualified would have a
Material Adverse Effect. Each of the Subsidiaries which is a limited
partnership is a limited partnership duly organized and existing in good
standing under the laws of the
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jurisdiction of its creation and is qualified to own assets and transact
business in jurisdictions where it transacts business or proposes to transact
business in the future, wherever necessary, if failure to be so qualified would
have a Material Adverse Effect.
Section 4.2 Authorization and Power. The Borrower and each of
the Subsidiaries has the corporate or partnership (as the case may be) power
and requisite authority to execute, deliver and perform the Loan Papers to be
executed by them. The Borrower and each of the Subsidiaries is duly authorized
to, and has taken all corporate or partnership (as the case may be) action
necessary to authorize their execution, delivery and performance of this
Agreement, the Notes and the other Loan Papers to be executed by them and is
and will continue to be duly authorized to perform this Agreement, the Notes
and the other Loan Papers.
Section 4.3 No Conflicts or Consents. Neither the execution and
delivery of this Agreement, the Notes or the other Loan Papers, nor the
consummation of any of the transactions herein or therein contemplated, nor
compliance with the terms and provisions hereof or with the terms and
provisions thereof, will contravene or materially conflict with any provision
of law, statute or regulation to which the Borrower or any Subsidiary is
subject or any judgment, license, order or permit applicable to the Borrower or
any Subsidiary, or any indenture, loan agreement, mortgage, deed of trust, or
other material agreement or instrument to which the Borrower or any Subsidiary
is a party or by which the Borrower or any Subsidiary may be bound, or to which
the Borrower or any Subsidiary may be subject, or result in or require the
creation or imposition of any Lien upon or with respect to any property now
owned or hereafter acquired by the Borrower or any Subsidiary, or violate any
provision of the charter, bylaws, partnership agreement or other organizational
documents of the Borrower or any Subsidiary. No consent, approval,
authorization or order of any court or Governmental Authority or third party is
required in connection with the execution and delivery by any of the Borrower
or Subsidiaries of the Loan Papers or to consummate the transactions
contemplated hereby or thereby.
Section 4.4 Enforceable Obligations. This Agreement, the Notes
and the other Loan Papers are the legal and binding obligations of the
Borrower, and the Guaranty Agreement executed by the Guarantors and other Loan
Papers to which the Subsidiaries, or any of them, are parties are the legal and
binding obligations of such Subsidiaries, all enforceable in accordance with
their respective terms, except as limited by Debtor Relief Laws.
Section 4.5 No Liens. All of the properties and assets of the
Borrower and the Subsidiaries are free and clear of all mortgages, liens,
encumbrances and other adverse claims of any nature, except for Permitted
Liens, and such Persons have good and marketable title to such properties and
assets.
Section 4.6 Financial Condition. The Borrower has delivered to
the Lenders copies of the consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of December 31, 1995, and the related consolidated
statements of income, stockholders' equity and statements of cash flows for the
year ended such date, certified by Coopers & Lybrand L.L.P., independent
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certified public accountants; such financial statements fairly present the
financial condition of the Borrower and its Consolidated Subsidiaries as of
such date on an unqualified basis and have been prepared in accordance with
GAAP applied on a basis consistent (except for the Adjustment of Revenue
Recognition) with that of prior periods; as of the Agreement Date, there are no
obligations, liabilities or indebtedness (including contingent and indirect
liabilities and obligations or unusual forward or long-term commitments) of the
Borrower or any of its Consolidated Subsidiaries which are (separately or in
the aggregate) material and are not reflected in such financial statements. No
changes having a Material Adverse Effect have occurred in the financial
condition or business of the Borrower or any of its Consolidated Subsidiaries
since the date of such financial statements.
Section 4.7 Full Disclosure. There is no material fact
(excluding general economic conditions not peculiar to the Borrower or any
Subsidiary) known to the Borrower or any Subsidiary that the Borrower has not
disclosed to the Lenders which could reasonably be expected to have a Material
Adverse Effect. Neither the financial statements referred to in Section 4.6
hereof, nor any certificate or statement delivered by the Borrower to the
Administrative Agent or any Lender in connection with negotiations of this
Agreement, contains any untrue statement of a material fact or omits to state
any material fact necessary to keep the statements contained herein or therein
from being misleading.
Section 4.8 No Default or Event of Default. No event or
condition has occurred and is continuing which constitutes a Default or an
Event of Default.
Section 4.9 Material Agreements. Neither the Borrower nor any
Subsidiary is in default in any respect under any loan agreement, indenture,
mortgage, security agreement or other material agreement or obligation to which
it is a party or by which any of its properties is bound, which default would
have a Material Adverse Effect.
Section 4.10 No Litigation. There are no actions, suits or legal,
equitable, arbitration or administrative proceedings pending, or to the
knowledge of the Borrower threatened, against the Borrower or any Subsidiary
(a) that would, if adversely determined, have a Material Adverse Effect or (b)
that purports to affect the legality, validity or enforceability of this
Agreement or any other Loan Paper.
Section 4.11 Burdensome Contracts. Neither the Borrower nor any
Subsidiary is a party to, or bound by, any contract which is a burdensome
contract having a Material Adverse Effect on the business, operations or
financial condition of the Borrower or any Subsidiary.
Section 4.12 Regulatory Defects. As of the Agreement Date, there
are no Regulatory Defects of which the Borrower has been advised or has actual
knowledge.
Section 4.13 Use of Proceeds; Margin Stock. The proceeds of the
Revolving Credit Advances and the Swing Line Advances will be used for the
Borrower's and its Consolidated
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Subsidiaries' working capital purposes (including intercompany loans),
acquisitions (but only to the extent permitted hereunder) and other lawful,
general corporate purposes. None of such proceeds will be used for the purpose
of purchasing or carrying any investment securities, except as may be
specifically authorized herein, and none of such proceeds will be used for the
purpose of purchasing or carrying any "margin stock" as defined in Regulation U
or G of the Board of Governors of the Federal Reserve System (12 C.F.R. Part
221 and 207), or for the purpose of reducing or retiring any indebtedness which
was originally incurred to purchase or carry a margin stock or for any other
purpose which might constitute this transaction a "purpose credit" within the
meaning of such Regulation U or G. Except for extensions of credit pursuant to
12 C.F.R. Section 207.5, the Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stocks.
Neither the Borrower nor any Person acting on behalf of the Borrower has taken
or will take any action which might cause the Notes or any of the other Loan
Papers, including this Agreement, to violate Regulation U or G or any other
regulations of the Board of Governors of the Federal Reserve System or to
violate Section 7 of the Exchange Act or any rule or regulation thereunder, in
each case as now in effect or as the same may hereinafter be in effect.
Neither the Borrower nor any of its Subsidiaries own any "margin stock".
Section 4.14 No Financing of Corporate Takeovers. No proceeds of
the Revolving Credit Advances or the Swing Line Advances will be used to
acquire any security in any transaction which is subject to Section 13 or 14 of
the Exchange Act, including particularly (but without limitation) Sections
13(d) and 14(d) thereof, except as otherwise permitted pursuant to Section 6.7
hereof.
Section 4.15 Taxes. All tax returns required to be filed by the
Borrower and the Subsidiaries in all jurisdictions have been filed and all
taxes (including mortgage recording taxes), assessments, fees and other
governmental charges upon the Borrower and the Subsidiaries and upon their
properties, income or franchises have been paid by the date or dates,
respectively, on which such taxes, assessments, fees and other charges are due,
except for amounts contested in good faith and for which sufficient reserves
have been established and immaterial amounts which may unintentionally remain
unpaid due to such matters as inadvertent discrepancies between taxes shown to
be due in prepared tax returns and actual taxes due. There is no proposed tax
assessment against the Borrower or any Subsidiary which would have a Material
Adverse Effect and there is no basis for such assessment.
Section 4.16 Principal Office, Etc. The principal office, chief
executive office and principal place of business of the Borrower is at 1600
West Seventh Street, Fort Worth, Texas 76102. The Borrower maintains its
principal books and records and the principal books and records of Subsidiaries
(other than Cash America, Inc.) at such address. The principal books and
records of Cash America, Inc. are maintained at Suite 350, 1013 Centre Road,
Wilmington, Delaware 19805.
Section 4.17 ERISA. Neither the Borrower, any member of the
controlled group of corporations as defined in Section 1563 of the Code, or the
group of trades or businesses under
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common control as defined in Section 414(c) of the Code, as amended, of which
the Borrower is a part or may become a part, has ever established or
maintained, nor does the Borrower or any Subsidiary presently intend to
establish or maintain, an employee pension benefit plan or other similar or
related employee pension benefit plan for employees of the Borrower and/or
Subsidiaries and covered by Title IV of the Employee Retirement Income Security
Act of 1974, as amended, together with all regulations issued pursuant thereto,
or subject to the minimum funding standards under Section 412 of the Code, as
amended, or any similar or related employee pension benefit plan, whether
domestic or foreign, which might be created or formed pursuant to any laws or
regulations which ever succeed or replace the foregoing laws or regulations.
However, the Borrower maintains (a) a qualified Code Section 401(k) savings
plan, (b) a qualified Code Section 125 flexible benefit plan for its employees
and Subsidiaries' employees and (c) a non-qualified savings plan for its key
management employees.
Section 4.18 Compliance with Law. The Borrower and the
Subsidiaries are in compliance with all laws, rules, regulations, ordinances,
orders and decrees of every Governmental Authority which are applicable to the
Borrower, the Subsidiaries and their business or properties, the failure to
comply with which would have a Material Adverse Effect. Neither the Borrower
nor any Subsidiary has been notified by any Governmental Authority that any of
the Borrower or any Subsidiary has failed to comply with any such laws, rules,
regulations, orders or decrees the failure to comply with which would result in
a Material Adverse Effect.
Section 4.19 Insider. The Borrower is not, and no Person having
"control" (as that term is defined in 12 U.S.C. Section 375(b)(5) or in
regulations promulgated pursuant thereto) of the Borrower is, an "executive
officer", "director", or "person who directly or indirectly or in concert with
one or more persons owns, controls, or has the power to vote more than 10% of
any class of voting securities" (as those terms are defined in 12 U.S.C.
Section 375(b) or in regulations promulgated pursuant thereto) of any Lender,
of a bank holding company of which any Lender is a subsidiary, or of any
subsidiary of a bank holding company of which any Lender is a subsidiary, or of
any bank at which Lender maintains a correspondent account, or of any bank
which maintains a correspondent account with any Lender.
Section 4.20 Subsidiaries; Trade Names. Except for Consolidated
Subsidiaries and any New Subsidiaries of which the Borrower has notified
Lenders in writing with respect thereto (which New Subsidiaries, if Domestic
Subsidiaries, shall strictly comply with Section 5.15 hereof), the Borrower has
not formed, created or acquired any Subsidiary. All trade names used by any of
the Borrower and/or the Subsidiaries have been provided in writing to the
Lenders, and assumed name certificates have been duly filed of record with
appropriate Governmental Authorities for each of such trade names.
Section 4.21 Solvency. The Borrower is, and the Borrower and its
Subsidiaries on a consolidated basis are, Solvent.
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Section 4.22 Representations and Warranties. Each request for an
Advance shall constitute, without the necessity of specifically containing a
written statement, a representation and warranty by the Borrower that no
Default or Event of Default exists and that all representations and warranties
contained in this Article 4 and in any other Loan Paper are true and correct at
and as of the date that the Advance is made, and after giving effect thereto.
Section 4.23 Survival of Representations, Etc. All
representations and warranties by the Borrower herein shall survive delivery of
the Notes and the making of the Revolving Credit Advances and the Swing Line
Advances, and any investigation at any time made by or on behalf of Lenders
shall not diminish Lenders' right to rely thereon.
ARTICLE 5
Business Covenants
Until the Commitment shall be terminated in accordance with the terms
hereof and until payment in full of the Notes and the Obligation, the Borrower
agrees that:
Section 5.1 Financial Statements, Reports and Documents. The
Borrower shall deliver to each Lender, each of the following:
(a) Quarterly Statements. As soon as available, and in any event
within forty-five (45) days, after the end of each quarterly fiscal period of
each Fiscal Year of the Borrower, copies of the consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as of the end of such fiscal
period, and consolidated statements of income, stockholders' equity and cash
flows of the Borrower and its Consolidated Subsidiaries for that quarterly
fiscal period and for the portion of the Fiscal Year ending with such period,
in each case setting forth in comparative form the figures for the
corresponding period of the preceding fiscal year, all in reasonable detail,
and certified by the corporate treasurer or president of the Borrower (in
representative capacity but not in individual capacity) as having been prepared
in accordance with GAAP, subject to year-end audit and adjustments;
(b) Annual Statements. As soon as available and in any event
within ninety (90) days after the close of each Fiscal Year of the Borrower,
copies of the consolidated balance sheets of the Borrower and its Consolidated
Subsidiaries as of the close of such Fiscal Year and consolidated statements of
income, stockholders' equity and cash flows of the Borrower and its
Consolidated Subsidiaries for such Fiscal Year, in each case setting forth in
comparative form the figures for the preceding Fiscal Year, all in reasonable
detail and accompanied by (a) an unqualified opinion of Coopers & Lybrand
L.L.P., or of other independent public accountants of recognized national
standing selected by the Borrower and satisfactory to the Lenders (the
"Accounting Firm"), to the effect that such financial statements have been
prepared in accordance with GAAP consistently maintained and applied (except
for changes in which such accountants concur) and that the
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examination of such accounts in connection with such financial statements has
been made in accordance with generally accepted auditing standards and,
accordingly, includes such tests of the accounting records and such other
auditing procedures as were considered necessary in the circumstances, and (b)
a report of the Accounting Firm to the effect that the Accounting Firm has
reviewed this Agreement and the financial covenants contained in Section 5.14
hereof and stating whether or not any matter has come to the attention of the
Accounting Firm that would cause it to believe that the Borrower has failed to
comply with the terms, covenants, provisions or conditions of this Agreement or
Section 5.14 hereof (and, if any such matter has come to their attention, then
stating such matter) as of the last day of such Fiscal Year; and within the
same time, separate audited statutory financial statements of Harvey & Thompson
and CAII Pantbelaning Aktiebolag and its subsidiaries.
(c) Management Letters and Responses. Promptly upon receipt
thereof, one copy of each management letter submitted to the Borrower by the
Accounting Firm (and each response of the Borrower thereto), it being
understood and agreed that all material items which are furnished to the
Lenders pursuant to this Section 5.1(c) shall be treated as confidential, but
nothing herein contained shall limit or impair the right of any of the Lenders
to disclose such items to any prospective or actual Participant or Assignee
under Section 10.6 hereof or any appropriate Governmental Authority (if
required by Applicable Law) or to use such information to the extent pertinent
to an evaluation of the Obligation or to enforce compliance with the terms and
conditions of this Agreement, or to take any lawful action which any Lender
deems necessary to protect its interests under this Agreement;
(d) SEC and Other Reports. Promptly upon their becoming
available, one copy of each financial statement and proxy statement sent by the
Borrower to stockholders generally and of each episodic, regular or periodic
report, and prospectus, filed by the Borrower with any securities exchange or
the Securities and Exchange Commission or any successor agency, and of any
order issued by any Governmental Authority in any proceeding to which the
Borrower is a party;
(e) Compliance Certificate. Within forty-five (45) days after the
end of each fiscal quarter of the Borrower hereafter, and within ninety (90)
days after each Fiscal Year end, a certificate executed by the corporate
treasurer or president or chief financial officer or controller of the Borrower
in a form substantially identical to Exhibit F attached hereto, stating (in
representative capacity but not individual capacity) that a review of the
activities of the Borrower during such fiscal quarter or Fiscal Year has been
made under his supervision and that (to the best knowledge and belief of such
officer, after reasonable and due investigation and review of matters pertinent
to the subject matter of such certificate) the Borrower has observed, performed
and fulfilled each and every obligation and covenant contained herein
including, without limitation, the covenants contained in Section 5.14 hereof,
and no Default or Event of Default exists and is continuing on the date thereof
unless so noted, together with a description of the nature and period of
existence thereof and the action that the Borrower has taken and proposes to
take with respect thereto;
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(f) Proposed Acquisition Information. Promptly upon becoming
available and in any event within ten (10) days prior to any proposed
acquisitions permitted under Section 6.7 hereof and involving an amount in
excess of $10,000,000.00, a pro forma income statement and balance sheet
prepared in accordance with GAAP prepared by the Borrower and taking into
effect such proposed acquisition, and such other information as the Lenders may
reasonably request regarding such proposed acquisition, in addition to any
notices and information required with respect to any New Subsidiary (if
applicable) under Section 5.15 hereof;
(g) Private Placement Notices. The Borrower will, and will cause
each of the Subsidiaries to, simultaneously with the providing to Teachers or
any other Person in connection with the Note Agreements or any of the "Loan
Documents" referred to therein of each notice of default or potential default,
and each request for amendment, consent or waiver, provide the Lenders with a
copy of such notice or request, together with any other information reasonably
requested by the Administrative Agent or the Determining Lenders with respect
thereto; and
(h) Other Information. Such other information concerning the
business, properties or financial condition of the Borrower and the
Subsidiaries as the Administrative Agent or the Determining Lenders shall
reasonably request.
Section 5.2 Payment of Taxes and Other Indebtedness. The
Borrower will, and will cause each Subsidiary to, pay and discharge (i) all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits, or upon any property belonging to it, before delinquent,
(ii) all lawful claims (including claims for labor, materials and supplies),
which, if unpaid, might become a Lien upon any of its property and (iii) all of
its other indebtedness comprising any of the Consolidated Indebtedness, except
as prohibited hereunder; provided, however, that the Borrower and each
Subsidiary shall not be required to pay any such tax, assessment, charge or
levy if and so long as the amount, applicability or validity thereof shall
currently be contested in good faith by appropriate proceedings and appropriate
accruals and reserves therefor have been established in accordance with GAAP.
Section 5.3 Maintenance of Existence and Rights; Conduct of
Business. Except as otherwise permitted hereunder, the Borrower will, and will
cause each Subsidiary to, preserve and maintain its corporate existence and all
of its rights, privileges and franchises necessary or desirable in the normal
conduct of its business, and conduct its business in an orderly and efficient
manner consistent with good business practices and in accordance, in all
material respects, with all valid regulations and orders of any Governmental
Authority, except to the extent that the failure to so preserve, maintain and
conduct would not reasonably be expected to have a Material Adverse Effect.
Section 5.4 Notice of Default or Event of Default. The Borrower
will furnish to the Administrative Agent, with copies for each Lender,
immediately upon becoming aware of the existence of any condition or event
which constitutes a Default or an Event of Default, a written
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notice specifying the nature and period of existence thereof and the action
which the Borrower is taking or proposes to take with respect thereto.
Section 5.5 Other Notices. The Borrower will, and will cause
each Subsidiary to, promptly notify the Administrative Agent of any of the
following which would have a Material Adverse Effect: (a) any change in its
consolidated financial condition or its business, (b) any default under any
agreement, contract or other instrument to which it is a party or by which any
of its properties are bound, or any acceleration of the maturity of any
Consolidated Indebtedness owing by the Borrower or any Subsidiary, (c) any
adverse claim against or affecting the Borrower or any Subsidiary or any of its
properties, (d) the commencement of, and any material determination in, any
litigation with any third party or any proceeding before any Governmental
Authority affecting the Borrower or any Subsidiary, and (e) any Regulatory
Defect.
Section 5.6 Compliance with Loan Papers. The Borrower and each
Subsidiary will promptly comply with any and all covenants and provisions of
this Agreement, the Notes, the Guaranty Agreements and all other of the Loan
Papers which pertain to them, respectively.
Section 5.7 Compliance with Material Agreements. The Borrower
will, and will cause its Subsidiaries to, comply in all material respects with
all material agreements, indentures, mortgages or documents binding on it or
affecting its properties or business.
Section 5.8 Operations and Properties. Except as otherwise
permitted hereunder, the Borrower will act in accordance with customary
industry standards in managing or operating its assets, properties, business
and investments the Borrower will, and will cause each Subsidiary to, keep in
good working order and condition, ordinary wear and tear excepted, all of its
assets and properties which are necessary to the conduct of its business.
Section 5.9 Books and Records; Access. The Borrower will give
any representative of the Lenders access during all business hours to, and
permit such representatives to examine, copy or make excerpts from, any and all
books, records, software, documents and other information in the possession of
the Borrower and relating to its affairs and the affairs of Subsidiaries, and
to inspect any of the properties of the Borrower and Subsidiaries, it being
understood and agreed that all material items which are furnished to the
Lenders pursuant to this Section 5.9 shall be treated as confidential, but
nothing herein contained shall limit or impair the right of any of the Lenders
to disclose such items to any prospective or actual Participants or Assignees
under Section 10.6 hereof or any appropriate Governmental Authority (if
required under Applicable Law) or to use such information to the extent
pertinent to an evaluation of the Obligation or to enforce compliance with the
terms and conditions of this Agreement, or to take any lawful action which any
of the Lenders deem necessary to protect their interests under this Agreement.
The Borrower will, and will cause each Subsidiary to, maintain complete and
accurate books and records of its transactions in accordance with good
accounting practices.
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Section 5.10 Compliance with Law. The Borrower will, and will
cause each Subsidiary to, comply with all applicable laws, rules, regulations,
and all orders of any Governmental Authority applicable to it or them or any of
its or their property, business operations or transactions, a breach of which
could have a Material Adverse Effect.
Section 5.11 Insurance. The Borrower will, and will cause each
Subsidiary to, maintain workmen's compensation insurance, liability insurance
and insurance on its properties, assets and business (other than business
interruption insurance), now owned or hereafter acquired, against such
casualties, risks and contingencies, and in such types and amounts, as are
consistent with customary practices and standards of companies engaged in
similar businesses and as required by applicable laws and regulations;
provided, however, the Borrower and the Subsidiaries shall not be required to
maintain insurance on their inventories (except for liability insurance and
insurance required by Applicable Law).
Section 5.12 Authorizations and Approvals. The Borrower will, and
will cause each Subsidiary to, promptly obtain, from time to time at its own
expense, all such governmental licenses, authorizations, consents, permits and
approvals as may be required to enable it to comply with its obligations
hereunder and under the other Loan Papers.
Section 5.13 Further Assurances. The Borrower will, and will
cause each Subsidiary to, make, execute or endorse, and acknowledge and deliver
or file or cause the same to be done, all such vouchers, invoices, notices,
certifications and additional agreements, undertakings, or other assurances,
and take and all such other action, as the Determining Lenders may, from time
to time, deem reasonably necessary or proper in connection with this Agreement
or any of the other Loan Papers, the obligations of the Borrower and
Subsidiaries hereunder or thereunder, or for better assuring and confirming
unto the Lenders matters which the Determining Lenders may request from time to
time.
Section 5.14 Financial Covenants. The Borrower shall comply with
the following financial covenants:
(a) Leverage Ratio. The Borrower shall not permit the Leverage
Ratio, as of the last day of each fiscal quarter of the Borrower, to exceed
0.60 to 1.0.
(b) Consolidated Net Worth. The Borrower shall not permit
Consolidated Net Worth at any time to be less than the sum of (i) $140,000,000,
plus (ii) fifty percent (50%) of Consolidated Adjusted Net Income (but only if
positive) for each fiscal quarter ending after December 31, 1995, plus (iii) an
amount equal to one hundred percent (100.0%) of any new equity raised by the
Borrower after December 31, 1995, through the issuance and sale of additional
capital stock of the Borrower.
(c) Minimum Inventory Turnover. The Borrower shall not permit, as
of the end of any fiscal quarter, the ratio of (i) cost of goods sold by the
Borrower and its Consolidated Subsidiaries for
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the most recent twelve months to (ii) average monthly inventory of the Borrower
and its Consolidated Subsidiaries (based on the sum of the thirteen amounts of
fiscal month end inventory balance of the Borrower and its Consolidated
Subsidiaries for the most recent thirteen fiscal months of the Borrower,
divided by thirteen) to be less than 1.60 to 1.0.
(d) Restricted Payments. The Borrower will not, and will not
permit any Subsidiary to, (i) declare or make any Dividends, (ii) make any
principal payment on (or make any payment, transfer or deposit for the purpose
of canceling, extinguishing, satisfying or defeasing) any indebtedness of the
Borrower which is subordinate in right of payment to the Notes or any of the
Obligation, (iii) set aside funds for any such purposes or (iv) become liable
to do any of the foregoing (in each case, a "Restricted Payment") unless, on
the effective date thereof (and immediately after giving effect thereto), no
Default or Event of Default shall exist.
(e) Minimum Fixed Charge Coverage. The Borrower shall not permit,
as of the end of any fiscal quarter of the Borrower, the ratio of (i) the sum
of Consolidated Adjusted Net Income for the most recent four (4) fiscal
quarters of the Borrower, plus the taxes, rents, leases and interest expenses
deducted from gross income to determine Consolidated Adjusted Net Income for
such four (4) quarters, to (ii) such rents, leases and interest expenses so
deducted for such four (4) quarters, to be less than 1.50 to 1.0.
(f) Consolidated Funded Debt to Consolidated EBITDA. The Borrower
shall not permit, as of the end of any fiscal quarter of the Borrower, the
ratio of (i) Consolidated Funded Debt as of the end of such fiscal quarter, to
(ii) Consolidated EBITDA for the most recent four (4) fiscal quarters of the
Borrower to be greater than 3.50 to 1.0.
Section 5.15 New Subsidiaries. The Borrower has advised the
Lenders that the Borrower may form new, wholly-owned Subsidiaries (each a "New
Subsidiary"), after the Agreement Date. Promptly upon the formation or
creation of any New Subsidiary which is a Domestic Subsidiary and prior to the
consummation of any business by any such New Subsidiary, the Borrower shall
cause such New Subsidiary to execute and deliver to the Administrative Agent,
for each Lender, a Guaranty Agreement and related corporate and authorizing
documents and to furnish opinions and such other items as the Determining
Lenders may reasonably request which are satisfactory to the Determining
Lenders.
Section 5.16 Opinions Regarding Obligations of Guarantors. Within
forty-five (45) days after any written request by the Determining Lenders,
which the Determining Lenders shall be entitled to make at any time and from
time to time, the Borrower shall obtain or cause to be provided in favor of the
Lenders an opinion of local counsel for any of the Guarantors, as requested by
the Determining Lenders which opinion and counsel shall be satisfactory to the
Determining Lenders.
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Section 5.17 Indemnity.
(a) THE BORROWER AGREES TO DEFEND, PROTECT, INDEMNIFY AND HOLD
HARMLESS THE ADMINISTRATIVE AGENT, EACH LENDER, EACH OF THEIR RESPECTIVE
AFFILIATES, AND EACH OF THEIR RESPECTIVE (INCLUDING SUCH AFFILIATES') OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS, SHAREHOLDERS AND CONSULTANTS
(INCLUDING, WITHOUT LIMITATION, THOSE RETAINED IN CONNECTION WITH THE
SATISFACTION OR ATTEMPTED SATISFACTION OF ANY OF THE CONDITIONS SET FORTH
HEREIN) OF EACH OF THE FOREGOING (COLLECTIVELY, "INDEMNITEES") FROM AND AGAINST
ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, CLAIMS, COSTS, EXPENSES AND DISBURSEMENTS (INCLUDING, WITHOUT
LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL FOR SUCH
INDEMNITEES IN CONNECTION WITH ANY INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL
PROCEEDING, WHETHER OR NOT SUCH INDEMNITEES SHALL BE DESIGNATED A PARTY
THERETO), IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST SUCH INDEMNITEES, IN ANY
MANNER RELATING TO OR ARISING OUT OF THIS AGREEMENT, THE OTHER LOAN PAPERS, OR
ANY ACT, EVENT OR TRANSACTION OR ALLEGED ACT, EVENT OR TRANSACTION RELATING OR
ATTENDANT THERETO, INCLUDING IN CONNECTION WITH, OR AS A RESULT OF ANY
NEGLIGENCE OF THE ADMINISTRATIVE AGENT OR ANY LENDER (OTHER THAN THOSE MATTERS
RAISED EXCLUSIVELY BY A PARTICIPANT AGAINST THE ADMINISTRATIVE AGENT OR ANY
LENDER AND NOT THE BORROWER), OR THE USE OR INTENDED USE OF THE PROCEEDS OF THE
ADVANCES HEREUNDER, OR IN CONNECTION WITH ANY THIRD PARTY INVESTIGATION OF ANY
POTENTIAL MATTER COVERED HEREBY, BUT EXCLUDING (i) ANY CLAIM OR LIABILITY THAT
ARISES AS THE RESULT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY
INDEMNITEE, AS FINALLY JUDICIALLY DETERMINED BY A COURT OF COMPETENT
JURISDICTION, AND (ii) MATTERS RAISED BY ONE INDEMNITEE AGAINST ANOTHER
INDEMNITEE (COLLECTIVELY, "INDEMNIFIED MATTERS"). TO THE EXTENT THAT ANY
INDEMNIFIED MATTER INVOLVES ONE OR MORE INDEMNITEES, SUCH INDEMNITEES SHALL USE
THE SAME LEGAL COUNSEL UNLESS ANY INDEMNITEE IN ITS REASONABLE DISCRETION
DETERMINES THAT CONFLICTS EXIST OR MAY ARISE IN CONNECTION WITH SUCH
REPRESENTATION.
(b) EACH INDEMNITEE AGREES WITH RESPECT TO ANY ACTION AGAINST IT
IN RESPECT OF WHICH INDEMNITY MAY BE SOUGHT UNDER THIS SECTION 5.17, THAT SUCH
INDEMNITEE WILL GIVE WRITTEN NOTICE OF THE COMMENCEMENT OF SUCH ACTION TO THE
BORROWER WITHIN A REASONABLE TIME AFTER SUCH INDEMNITEE IS MADE A PARTY TO SUCH
ACTION. UPON RECEIPT OF ANY SUCH NOTICE BY THE BORROWER, THE BORROWER, UNLESS
SUCH INDEMNITEE SHALL BE ADVISED BY ITS COUNSEL THAT THERE ARE OR MAY BE LEGAL
DEFENSES
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AVAILABLE TO SUCH INDEMNITEE THAT ARE DIFFERENT FROM, IN ADDITION TO, OR IN
CONFLICT WITH, THE DEFENSES AVAILABLE TO THE BORROWER, MAY PARTICIPATE WITH THE
INDEMNITEE IN THE DEFENSE OF SUCH INDEMNIFIED MATTER, INCLUDING THE EMPLOYMENT
OF COUNSEL CONSENTED TO BY SUCH INDEMNITEE (WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD); PROVIDED, HOWEVER, NOTHING PROVIDED HEREIN SHALL (i)
ENTITLE THE BORROWER TO ASSUME THE DEFENSE OF SUCH INDEMNIFIED MATTER OR (ii)
REQUIRE THE CONSENT OF THE BORROWER FOR ANY SETTLEMENT OR ACTION IN RESPECT OF
SUCH INDEMNIFIED MATTER, ALTHOUGH EACH INDEMNITEE AGREES TO CONFER AND CONSULT
WITH THE BORROWER BEFORE MAKING ANY SETTLEMENT OF SUCH INDEMNIFIED MATTER.
(c) THE INDEMNITY OBLIGATIONS UNDER THIS SECTION SHALL BE IN
ADDITION TO ANY LIABILITY WHICH THE BORROWER MAY OTHERWISE HAVE, SHALL EXTEND
UPON THE SAME TERMS AND CONDITIONS TO EACH INDEMNITEE, AND SHALL BE BINDING
UPON AND INURE TO THE BENEFIT OF ANY SUCCESSORS, ASSIGNS, HEIRS AND PERSONAL
REPRESENTATIVES OF THE BORROWER, THE ADMINISTRATIVE AGENT, THE LENDERS AND ALL
OTHER INDEMNITEES. THIS SECTION SHALL SURVIVE ANY TERMINATION OF THIS
AGREEMENT AND PAYMENT OF THE OBLIGATIONS.
ARTICLE 6
Negative Covenants
Until the Commitment shall be terminated in accordance with the terms
hereof, and until payment in full of the Notes and the Obligation, the Borrower
agrees that:
Section 6.1 Limitation on Indebtedness. The Borrower will not,
and will not permit any Subsidiary to, incur, create, contract, waive, assume,
have outstanding, guarantee or otherwise be or become, directly or indirectly
liable in respect of any Consolidated Indebtedness or other indebtedness,
except
(i) the Obligation arising out of or in connection with this
Agreement and the other Loan Papers,
(ii) purchase money Consolidated Indebtedness in an aggregate
amount outstanding which, when added to the aggregate amount
of outstanding Capital Leases of the Borrower and Consolidated
Subsidiaries at such time, would not exceed $10,000,000.00 at
any time,
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(iii) current liabilities for taxes and assessments incurred in the
ordinary course of business, and other liabilities for unpaid
taxes being contested in good faith by the Borrower or any
Subsidiary for which sufficient reserves have been
established,
(iv) current amounts payable or accrued for other claims (other
than Consolidated Indebtedness for borrowed money or purchase
money Consolidated Indebtedness) incurred in the ordinary
course of business, provided that all such liabilities,
accounts and claims shall be promptly paid and discharged when
due or in conformity with customary trade terms, except for
those being contested in good faith by the Borrower or a
Subsidiary for which sufficient reserves have been
established,
(v) contingent liabilities resulting from the endorsement of
negotiable instruments in the ordinary course of business,
(vi) intercompany loans and advances, provided that the aggregate
amount of outstanding loans and advances by the Borrower and
Subsidiaries to or in Persons located or doing substantially
all of their business outside of the United States (including,
without limitation, any Foreign Subsidiary), together with
Investments made pursuant to Section 6.3(iii) hereof after
December 31, 1995, Investments made pursuant to Section
6.3(ix) hereof after December 31, 1995 which are outside the
United States and acquisitions made pursuant to Section
6.7(ii)(A)(w) hereof after December 31, 1995, shall not exceed
$15,000,000.00 at any time,
(vii) indebtedness arising under Hedge Agreements,
(viii) Guaranties permitted under Section 6.10 hereof,
(ix) the Private Placement Debt,
(x) indebtedness of Harvey & Thompson or any successor thereto or
Affiliate thereof under an unsecured line of credit not to
exceed 5,000,000.00 British Pounds Sterling in aggregate
principal amount,
(xi) with respect to Temporary Cash Investments, short term
indebtedness not constituting "margin loans" and not exceeding
$1,000,000.00 at any time in the aggregate owed by the
Borrower or a Consolidated Subsidiary to the broker or
investment banking firm which is holding such assets for the
account of the Borrower or a Consolidated Subsidiary, but only
to the extent that such indebtedness is to be repaid, in the
ordinary course of business, by the collection or liquidation
of such assets at the maturity of such assets,
(xii) existing indebtedness of Express Cash International
Corporation in respect of Capital Leases permitted under the
terms of the Note Agreements,
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(xiii) indebtedness outstanding in respect of the CAII Pantbelaning
AB Loan Agreement not to exceed SEK 193,750,000.00 in
aggregate principal amount,
(xiv) indebtedness of Svensk Pantbelaning AB or any successor
thereto or Affiliate thereof pursuant to an unsecured line of
credit not to exceed SEK 32,500,000 in aggregate principal
amount,
(xv) indebtedness assumed in acquisitions permitted pursuant to
Section 6.7 hereof not to exceed $5,000,000 in aggregate
principal amount, provided that
(A) at the time of the assumption thereof and immediately
thereafter after giving effect thereto, no Default or
Event of Default shall exist and
(B) such indebtedness shall be paid in full within sixty
(60) days of any such acquisition, and
(xvi) other indebtedness for borrowed money of the Borrower not
otherwise permitted by the foregoing provisions of this
Section 6.1 in an aggregate amount not to exceed the
difference between $75,000,000 and the aggregate outstanding
principal amount of the Private Placement Debt, provided that
(A) at the time of the incurrence or assumption thereof
and immediately thereafter and giving effect thereto,
no Default or Event of Default shall exist
(B) the financial covenants and events of default with
respect to such indebtedness are no more restrictive
than the financial covenants set forth in this
Agreement, and
(C) the final maturity date of such indebtedness shall
not occur prior to the Maturity Date.
Section 6.2 Negative Pledge. The Borrower will not, and will not
permit any Subsidiary to, create or suffer to exist any Lien upon any of its
property or assets, now owned or hereafter acquired, except for (a) Liens upon
assets purchased with the purchase money Indebtedness described in Section
6.1(ii) above, provided that any such purchase money Liens shall secure only
the purchase money indebtedness incurred to purchase such asset or assets, (b)
Permitted Liens, and (c) Liens on assets acquired to the extent permitted
pursuant to Section 6.7 hereof, provided that such Liens are fully paid and
released within sixty (60) days after the acquisition of such assets.
Section 6.3 Limitation on Investments. The Borrower will not,
and will not permit any Subsidiary to, make or have outstanding any Investments
in or to any Person, except for
(i) pawn transactions and pawn loans in the ordinary course of its
day to day business,
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(ii) ownership of Stock of Domestic Subsidiaries which, promptly
after the formation or acquisition thereof, execute a Guaranty
Agreement,
(iii) ownership of Stock of Foreign Subsidiaries, provided that the
aggregate amount of such Investments made after December 31,
1995, together with loans and advances permitted under Section
6.1(vi) hereof, acquisitions made pursuant to Section
6.7(ii)(A)(w) hereof after December 31, 1995, and Investments
made pursuant to Section 6.3(ix) hereof after December 31,
1995, which are outside the United States, shall not exceed
$15,000,000 at any time,
(iv) Temporary Cash Investments and such other "cash equivalent"
investments as the Determining Lenders may from time to time
approve,
(v) other Investments permitted under Section 6.7 hereof,
(vi) Investments for the purchase of real estate, provided that
such Investments shall only be for the purpose of operating
pawnshops (and other businesses related thereto) and provided
further that the cumulative amount of such Investments made
after December 31, 1995 shall not exceed $15,000,000.00,
(vii) loans to officers of the Borrower and Subsidiaries not to
exceed at any time an aggregate amount of $5,000,000,
(viii) any other Investments previously made in or to any Person as
reflected on the December 31, 1995 financial statements
referred to in Section 4.6 hereof, provided that no further
Investments (whether by loan or purchase or otherwise) shall
be made in or to such Person except as permitted elsewhere
herein, and
(ix) any other Investments which other Investments shall not exceed
on any date an aggregate amount equal to the product obtained
by multiplying
(A) Consolidated Tangible Net Worth times
(B) .075 on such date.
Section 6.4 Alteration of Material Agreements. The Borrower will
not, and will not permit any Subsidiary to, consent to or permit any
alterations, amendments, modifications, releases, waivers or terminations of
any material agreement to which it is a party, if such alterations, amendments,
modifications, releases, waivers or terminations would have a Material Adverse
Effect.
Section 6.5 Certain Transactions. The Borrower will not, and
will not permit any Subsidiary to, enter into any transactions with, or pay any
management fees to, any of their
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Affiliates; provided, however, that the Borrower and the Subsidiaries may enter
into transactions with their Affiliates upon terms not less favorable to the
Borrower and the Subsidiaries than would be obtainable at the time in
comparable transactions of the Borrower and the Subsidiaries in arms-length
dealings with Persons other than their Affiliates, other than employment
contracts and agreements for compensation of employees or directors of the
Borrower and the Subsidiaries.
Section 6.6 Name, Fiscal Year and Accounting Firm and Method.
The Borrower will not, and will not permit any Subsidiary to, (i) change its
name or Fiscal Year (except after providing 30-days' prior written notice to
the Lenders), (ii) change its principal accounting firm to an accounting firm
other than an Accounting Firm, or (iii) change its method of accounting, unless
(A) required under GAAP or (B) in respect of the Adjustment of Revenue
Recognition.
Section 6.7 Liquidation, Mergers, Consolidations, Acquisitions
and Dispositions of Substantial Assets. The Borrower will not, and will not
permit any Subsidiary to,
(i) dissolve or liquidate,
(ii) become a party to any merger or consolidation, or acquire by
purchase, lease or otherwise all or substantially all of the
assets or Stock, bonds or other investment securities of any
Person, except for
(A) such acquisitions by the Borrower or any Subsidiary
only with respect to existing lines of business of
the Borrower and Subsidiaries as of December 31,
1995, where the Borrower or any Subsidiary becomes
the owner of assets or Stock of such other Person,
provided that
(v) acquisitions of real estate after the
Agreement Date shall only be for the purpose
of operating pawnshops (and other businesses
related thereto) and shall be subject to the
provisions of Section 6.3(vi) hereof,
(w) such acquisitions outside the United States
shall be permitted only to the extent that
the aggregate amount of such acquisitions
made after December 31, 1995 by the Borrower
and Subsidiaries of or in Persons located or
doing business outside the United States,
together with loans and advances permitted
under Section 6.1(vi) hereof, Investments
made pursuant to Section 6.3(iii) hereof
after December 31, 1995, and Investments made
pursuant to Section 6.3(ix) hereof after
December 31, 1995, which are outside the
United States, is less than $15,000,000.00 at
any time,
(x) such acquisitions are not Hostile
Acquisitions,
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(y) the amount of any such acquisition of a pawn
related business made within the United
States (whether involving assets, stock, or
both assets and stock) after December 31,
1995 shall not exceed $25,000,000, and
(z) the aggregate amount of such acquisitions
made within the United States (whether
involving assets, stock or both assets and
stock) in existing lines of business of the
Borrower and Subsidiaries as of December 31,
1995, but not in pawn related businesses
(whether involving assets, stock or both
assets and stock) after December 31, 1995
shall not exceed $10,000,000, and
(B) acquisitions of assets located in the United
States in other than the existing lines of business
of the Borrower and Subsidiaries as of December 31,
1995 not to exceed $10,000,000 in aggregate amount,
(iii) sell, assign or discount any accounts receivable or pawn loans
except as a result of the sale of a related pawnshop in the
ordinary course of business, or
(iv) sell, transfer, lease or otherwise dispose of any of its
property or assets (including Stock of any Subsidiary) or
business, except
(A) in the ordinary course of business,
(B) the Borrower may sell any tract or other parcel of
real estate having a net book value of $10,000,000 or
less,
(C) other assets, the aggregate net book value of which
sold during any Fiscal Year shall not exceed 1.5% of
Consolidated Tangible Assets as of the last day of
the immediately preceding Fiscal Year, and
(D) the foregoing shall not operate to prevent mergers or
consolidations of any wholly-owned Subsidiary into
the Borrower or into a Guarantor or a sale, transfer
or lease of assets by any wholly-owned Subsidiary to
the Borrower or to a Guarantor.
Section 6.8 Lines of Business. The Borrower shall not, and will
not permit any Subsidiary to, directly or indirectly, engage in any business
other than those in which it or they were engaged in as of December 31, 1995,
and activities related thereto.
Section 6.9 No Amendments. The Borrower will not, and will not
permit any Subsidiary to, amend its certificate of incorporation or bylaws if
such action would have a Material Adverse Effect.
Section 6.10 Guaranties. The Borrower will not, and will not
permit any Subsidiary to, become or be liable in respect of any Guaranty,
except for (i) the Guaranty Agreements,
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(ii) Guaranties of indebtedness to the extent such indebtedness is permitted
pursuant to Section 6.1 hereof), (iii) additional limited Guaranties of the
Borrower, provided that the aggregate indebtedness guaranteed thereby at any
time shall not exceed $1,000,000, and provided further that within five (5)
days after the execution of each Guaranty by the Borrower for indebtedness in
excess of $100,000.00, the Borrower shall provide each of the Lenders with a
copy of such executed Guaranty, and (iv) the Guaranties, dated May 6, 1993 and
July 7, 1995, respectively, and executed and delivered to Teachers in
connection with the Note Agreements.
Section 6.11 Strict Compliance. If any action or failure to act
by the Borrower violates any covenant or obligation of the Borrower contained
herein, then such violation shall not be excused by the fact that such action
or failure to act would otherwise be required or permitted by any covenant (or
exception to any covenant) other than the covenant violated.
Section 6.12 No New Subsidiaries. Neither the Borrower nor any
Subsidiary shall create or form any Subsidiary other than New Subsidiaries of
which the Borrower shall have notified the Lenders in writing and which, if a
New Subsidiary is a Domestic Subsidiary, such New Subsidiary strictly complies
with Section 5.15 hereof.
Section 6.13 ERISA. Neither the Borrower nor any Subsidiary, nor
any other member of the group described in Section 4.17 hereof shall establish
or maintain an employee benefit plan or other plan as described in such Section
4.17; provided, however, this Section shall not be construed to prohibit
employee benefits not contemplated under Title IV of ERISA or otherwise
contemplated under Section 4.17 hereof.
ARTICLE 7
Default
Section 7.1 Events of Default. Each of the following shall
constitute an Event of Default, whatever the reason for such event, and whether
voluntary, involuntary, or effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
governmental or non-governmental body:
(a) the Borrower shall fail to pay when due (i) any principal of,
or interest on, any Note or (ii) any fee, expense, reimbursement obligation or
any other amount due in connection herewith or with any other Loan Paper, and
such failure with respect to clause (ii) shall have continued for five (5)
Business Days after the Borrower's receipt from the Administrative Agent of
notice of such failure;
(b) any representation or warranty made under this Agreement, or
any of the other Loan Papers, or in any certificate or statement furnished or
made to the Lenders pursuant hereto or in connection herewith or with the
Revolving Credit Advances or the Swing Line Advances
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hereunder, shall prove to be untrue or inaccurate in any material respect as of
the date on which such representation or warranty is made;
(c) the Borrower or any Subsidiary shall fail to perform or
observe any term or covenant contained in Sections 5.1 through 5.7, 5.9, 5.13
through 5.17 hereof or Article 6 hereof (but only to the extent that the
failure to perform or observe the covenants in Section 6.1, 6.2 or 6.3 hereof
involves an aggregate amount in excess of $500,000);
(d) the Borrower or any Subsidiary shall fail to perform or
observe any other term or covenant contained herein or in any of the other Loan
Papers (other than those described in subsections (a) and (c) above, and only
to the extent that the failure to perform or observe the covenants in Section
6.1, 6.2 or 6.3 hereof does not involve an aggregate amount in excess of
$500,000), and such failure shall not be remedied within thirty (30) days
following the earlier of knowledge thereof by the Borrower or any Subsidiary or
of written notice by the Administrative Agent to the Borrower;
(e) the Borrower or any Subsidiary shall fail to perform or
observe any term or covenant (or any condition shall occur) with respect to any
indebtedness (including contingent indebtedness in respect of letters of
credit) of the Borrower or any Subsidiary (i) evidenced by or arising under any
one or more agreements, contracts or instruments in an amount in excess of
$1,000,000.00 (or the Dollar equivalent) or to any one or more Persons for an
amount in excess of $1,000,000.00 (or the Dollar equivalent), (ii) evidenced by
or arising under any Hedge Agreement, or (iii) which could otherwise have a
Material Adverse Effect, and such failure (or condition) shall continue for
more than the period of grace, if any, specified therein if the effect of such
failure (or condition) is to accelerate, or to permit the acceleration of, the
maturity of such indebtedness, or any such indebtedness shall be declared to be
due and payable or required to be prepaid, redeemed or defeased, or an offer to
prepay, redeem, purchase or defease such indebtedness shall be required to be
made, in each case prior to the stated maturity thereof, or the principal of
any such indebtedness is not repaid in full upon the maturity thereof or in
full or in part pursuant to any regularly scheduled required prepayment,
redemption, repurchase or defeasance;
(f) any of the Loan Papers shall cease to be legal, valid, binding
agreements enforceable against any party executing the same in accordance with
the respective terms thereof or shall in any way be terminated or become or be
declared ineffective or inoperative or shall in any way whatsoever cease to
give or provide the respective rights, remedies, powers or privileges intended
to be created thereby, and the same could have a Material Adverse Effect;
(g) the Borrower or any Subsidiary shall (i) apply for or consent
to the appointment of a receiver, trustee, custodian, intervenor or liquidator
of itself or of all or a substantial part of its assets, (ii) file a voluntary
petition in bankruptcy or is generally unable to pay its debts as they become
due, (iii) make a general assignment for the benefit of creditors, (iv) file a
petition or answer seeking reorganization or an arrangement with creditors or
to take advantage of any
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bankruptcy or insolvency laws, (v) file an answer admitting the material
allegations of, or consent to, or default in answering, a petition filed
against it in any bankruptcy, reorganization or insolvency proceeding, or (vi)
take corporate action for the purpose of effecting any of the foregoing;
(h) an involuntary petition or complaint shall be filed against
the Borrower or any Subsidiary seeking bankruptcy or reorganization of the
Borrower or such Subsidiary or the appointment of a receiver, custodian,
trustee, intervenor or liquidator of the Borrower or such Subsidiary, or all or
substantially all of its assets, and such petition or complaint shall not have
been dismissed within 60 days of the filing thereof; or an order, order for
relief, judgment or decree shall be entered by any court of competent
jurisdiction or other competent authority approving a petition or complaint
seeking reorganization of the Borrower or any Subsidiary or appointing a
receiver, custodian, trustee, intervenor or liquidator of the Borrower or any
Subsidiary, or of all or substantially all of its assets, and such order,
judgment or decree shall continue unstayed and in effect for a period of sixty
(60) days;
(i) any final judgment(s) for the payment of money in excess of
the sum of $1,000,000.00 in the aggregate shall be rendered against the
Borrower or any Subsidiary and such judgment or judgments shall not be
satisfied, discharged or stayed (with sufficient reserves having been set aside
by the Borrower or such Subsidiary to pay such judgment or judgments) at least
ten (10) days prior to the date on which any of its assets could be lawfully
sold to satisfy such judgment; or
(j) A Change of Control shall have occurred.
Section 7.2 Remedies. If an Event of Default shall have occurred
and shall be continuing:
(a) With the exception of an Event of Default specified in Section
7.1(g) or 7.1(h) hereof, the Administrative Agent shall, upon the direction of
the Determining Lenders, terminate the Commitment and/or declare the principal
of and interest on the Advances and all Obligations and other amounts owed
under the Loan Papers to be forthwith due and payable without presentment,
demand, protest or notice of any kind, all of which are hereby expressly
waived, anything in the Loan Papers to the contrary notwithstanding.
(b) Upon the occurrence of an Event of Default specified in
Section 7.1(g) or 7.1(h) hereof, such principal, interest and other amounts
shall thereupon and concurrently therewith become due and payable and the
Commitment shall automatically forthwith terminate, all without any action by
the Administrative Agent, any Lender or any holders of the Notes and without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived, anything in the Loan Papers to the contrary notwithstanding.
(c) The Administrative Agent, and the Lenders may exercise all of
the post-default rights granted to them under the Loan Papers or under
Applicable Law.
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(d) The rights and remedies of the Administrative Agent and the
Lenders hereunder shall be cumulative, and not exclusive.
ARTICLE 8
Changes in Circumstances
Section 8.1 LIBOR Basis Determination Inadequate. If with
respect to any proposed LIBOR Advance for any Interest Period, any Lender
determines that (i) deposits in dollars (in the applicable amount) are not
being offered to that Lender in the relevant market for such Interest Period or
(ii) the LIBOR Basis for such proposed LIBOR Advance does not adequately cover
the cost to such Lender of making and maintaining such proposed LIBOR Advance
for such Interest Period, such Lender shall forthwith give notice thereof to
the Borrower, whereupon until such Lender notifies the Borrower that the
circumstances giving rise to such situation no longer exist, the obligation of
such Lender to make LIBOR Advances shall be suspended.
Section 8.2 Illegality. If any Applicable Law, or any change
therein or adoption thereof, or interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
LIBOR Lending Office) with any request or directive (whether or not having the
force of law) of any such Governmental Authority, central bank or comparable
agency, shall make it unlawful or impossible for such Lender (or its LIBOR
Lending Office) to make, maintain or fund its LIBOR Advances, such Lender shall
so notify the Borrower and the Administrative Agent. Before giving any notice
to the Borrower pursuant to this Section, the notifying Lender shall designate
a different LIBOR Lending Office or other lending office if such designation
will avoid the need for giving such notice and will not, in the sole judgment
of the Lender, be materially disadvantageous to the Lender. Upon receipt of
such notice, notwithstanding anything contained in Article 2 hereof, the
Borrower shall repay in full the then outstanding principal amount of each
LIBOR Advance owing to the notifying Lender, together with accrued interest
thereon, on either (a) the last day of the Interest Period applicable to such
Advance, if the Lender may lawfully continue to maintain and fund such Advance
to such day, or (b) immediately, if the Lender may not lawfully continue to
fund and maintain such Advance to such day.
Section 8.3 Increased Costs.
(a) If any Applicable Law or any change therein or adoption
thereof, or any interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof or compliance by any Lender (or its LIBOR Lending
Office) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank or comparable agency:
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(i) shall subject a Lender (or its LIBOR Lending Office)
to any Tax (net of any tax benefit engendered thereby) with respect to
its LIBOR Advances or its obligation to make such Advances, or shall
change the basis of taxation of payments to a Lender (or to its LIBOR
Lending Office) of the principal of or interest on its LIBOR Advances
or in respect of any other amounts due under this Agreement relating
to LIBOR Advances, as the case may be, or its obligation to make such
Advances (except for changes in the rate of tax on the overall net
income, net worth or capital of the Lender and franchise taxes, doing
business taxes or minimum taxes imposed upon such Lender); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors
of the Federal Reserve System), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, a Lender's LIBOR Lending Office or shall impose on the
Lender (or its LIBOR Lending Office) or on the United States market
for certificates of deposit or the London interbank market any other
condition affecting its LIBOR Advances or its obligation to make such
Advances;
and the result of any of the foregoing is to increase the cost to a Lender (or
its LIBOR Lending Office) of making or maintaining any LIBOR Advances, or to
reduce the amount of any sum received or receivable by a Lender (or its LIBOR
Lending Office) with respect thereto, by an amount reasonably deemed by a
Lender to be material ("Increased Advance Costs"), then, within 15 days after
written demand by a Lender and delivery of the certificate described in Section
8.3(b) below, the Borrower agrees to pay to such Lender such additional amount
as will compensate such Lender for such increased costs or reduced amounts,
subject to Section 10.9 hereof. The affected Lender will as soon as
practicable notify the Borrower of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Lender to compensation
pursuant to this Section and will designate a different LIBOR Lending Office or
other lending office if such designation will avoid the need for, or reduce the
amount of, such compensation and will not, in the sole judgment of the affected
Lender made in good faith, be materially disadvantageous to such Lender.
(b) A certificate of any Lender claiming compensation under this
Section and setting forth in detail the reasons for such Increased Advance
Costs, the additional amounts to be paid to it hereunder and calculations
therefor shall be conclusive in the absence of manifest error. In determining
such amount, a Lender may use any reasonable averaging and attribution methods.
If a Lender demands compensation under this Section, the Borrower may at any
time, upon at least two Business Days' prior notice to the Lender, after
reimbursement to the Lender by the Borrower in accordance with this Section of
all costs incurred, prepay in full the then outstanding LIBOR Advances of the
Lender, together with accrued interest thereon to the date of prepayment, along
with any reimbursement in compliance with the provisions of Section 2.9 hereof.
Concurrently with prepaying such LIBOR Advances, the Borrower shall borrow a
Base Rate Advance from the Lender, and the Lender shall make such Base Rate
Advance, in an amount such
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that the outstanding principal amount of the Advances owing to such Lender
shall equal the outstanding principal amount of the Advances owing immediately
prior to such prepayment.
Section 8.4 Effect On Base Rate Advances. If notice has been
given pursuant to Section 8.1, 8.2 or 8.3 hereof suspending the obligation of a
Lender to make LIBOR Advances, or requiring LIBOR Advances of a Lender to be
repaid or prepaid, then, unless and until the Lender notifies the Borrower that
the circumstances giving rise to such repayment no longer apply, all Advances
which would otherwise be made by such Lender as LIBOR Advances shall be made
instead as Base Rate Advances; provided, however, the parties hereto agree to
negotiate in good faith (and make the necessary amendments hereto) to promptly
provide a certificate of deposit (or other similar option based on the Lenders'
cost of funds) interest rate option upon economic terms substantially similar
to the LIBOR Advances.
Section 8.5 Capital Adequacy. If either (a) the introduction of
or any change in or in the interpretation of any Applicable Law or (b)
compliance by a Lender with any Applicable Law or any guideline or request from
any central bank or other Governmental Authority (whether or not having the
force of law) affects or would affect the amount of capital required or
expected to be maintained by a Lender or any corporation controlling such
Lender, and such Lender determines that the amount of such capital is increased
by or based upon the existence of such Lender's Commitment or Advances
hereunder and other commitments or advances of such Lender of this type, then,
upon demand by such Lender, subject to Section 10.9, the Borrower shall
immediately upon receipt of the certificate noted below pay to such Lender,
from time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender with respect to such circumstances (collectively,
"Additional Costs"), to the extent that such Lender reasonably determines in
good faith such increase in capital to be allocable to the existence of such
Lender's Commitment hereunder. A certificate explaining in detail such amounts
and the relevant calculations thereto and reasons therefor submitted to the
Borrower by a Lender hereunder, shall, in the absence of manifest error, be
conclusive and binding for all purposes.
ARTICLE 9
AGREEMENT AMONG LENDERS
Section 9.1 Agreement Among Lenders. The Lenders agree among
themselves that:
(a) Administrative Agent. Each Lender hereby appoints the
Administrative Agent as its nominee in its name and on its behalf, to receive
all documents and items to be furnished hereunder; to act as nominee for and on
behalf of all Lenders under the Loan Papers; to, except as otherwise expressly
set forth herein, take such action as may be requested by the Determining
Lenders, provided that, unless and until the Administrative Agent shall have
received such requests, the Administrative Agent may take such administrative
action, or refrain from taking such administrative action, as it may deem
advisable and in the best interests of the Lenders; to
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arrange the means whereby the proceeds of the Advances of the Lenders are to be
made available to the Borrower; to distribute promptly to each Lender
information, requests and documents received from the Borrower, and each
payment (in like funds received) with respect to any of such Lender's Advances,
fee or other amount; and to deliver to the Borrower requests, demands,
approvals and consents received from the Lenders. The Administrative Agent
agrees to promptly distribute to each Lender, at such Lender's address set
forth below information, requests, documents and payments received from the
Borrower.
(b) Replacement of the Administrative Agent. Should the
Administrative Agent or any successor Administrative Agent ever cease to be a
Lender hereunder, or should the Administrative Agent or any successor
Administrative Agent ever resign as the Administrative Agent, or should the
Administrative Agent or any successor Administrative Agent ever be removed with
cause by the Determining Lenders, then the Lender appointed by the other
Lenders (upon acceptance by such Lender of such appointment) shall forthwith
become the Administrative Agent, and the Borrower and the Lenders shall execute
such documents as any Lender may reasonably request to reflect such change. If
the Administrative Agent also then serves in the capacity of the Swing Line
Bank, such resignation or removal shall constitute resignation or removal of
the Swing Line Bank, and the Lender appointed by the other Lenders to serve as
the Administrative Agent shall also serve in such other capacity or capacities
from which its predecessor resigned or was removed. Any resignation or removal
of the Administrative Agent or any successor Administrative Agent shall become
effective upon the appointment by the Lenders of a successor Administrative
Agent; provided, however, that if the Lenders fail for any reason to appoint a
successor within 60 days after such removal or resignation, the Administrative
Agent or any successor Administrative Agent (as the case may be) shall
thereafter have no obligation to act as the Administrative Agent hereunder.
(c) Expenses. Each Lender shall pay its pro rata share, based on
its Specified Percentage, of any expenses paid by the Administrative Agent
directly and solely in connection with any of the Loan Papers if the
Administrative Agent does not receive reimbursement therefor from other sources
within 60 days after the date incurred, unless payment of such fees is being
diligently disputed by such Lender or the Borrower in good faith. Any amount
so paid by the Lenders to the Administrative Agent shall be returned by the
Administrative Agent pro rata to each paying Lender to the extent later paid by
the Borrower or any other Person on the Borrower's behalf to the Administrative
Agent.
(d) Delegation of Duties. The Administrative Agent may execute
any of its duties hereunder by or through officers, directors, employees,
attorneys or agents, and shall be entitled to (and shall be protected in
relying upon) advice of counsel concerning all matters pertaining to its duties
hereunder.
(e) Reliance by the Administrative Agent. The Administrative
Agent and its officers, directors, employees, attorneys and agents shall be
entitled to rely and shall be fully protected in relying on any writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
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telegram, telex or teletype message, statement, order, or other document
reasonably believed by it or them in good faith to be genuine and correct and
to have been signed or made by the proper Person and, with respect to legal
matters, upon opinions of counsel selected by the Administrative Agent. The
Administrative Agent may, in its reasonable judgment, deem and treat the payee
of any Note as the owner thereof for all purposes hereof.
(f) Limitation of the Administrative Agent's Liability. Neither
the Administrative Agent nor any of its officers, directors, employees,
attorneys or agents shall be liable for any action taken or omitted to be taken
by it or them hereunder in good faith and believed by it or them to be within
the discretion or power conferred to it or them by the Loan Papers or be
responsible for the consequences of any error of judgment, except for its or
their own gross negligence or wilful misconduct. Except as aforesaid, the
Administrative Agent shall be under no duty to enforce any rights with respect
to any of the Advances, or any security therefor. The Administrative Agent
shall not be compelled to do any act hereunder or to take any action towards
the execution or enforcement of the powers hereby created or to prosecute or
defend any suit in respect hereof, unless indemnified to its satisfaction
against loss, cost, liability and expense. The Administrative Agent shall not
be responsible in any manner to any Lender for the effectiveness,
enforceability, genuineness, validity or due execution of any of the Loan
Papers, or for any representation, warranty, document, certificate, report or
statement made herein or furnished in connection with any Loan Papers, or be
under any obligation to any Lender to ascertain or to inquire as to the
performance or observation of any of the terms, covenants or conditions of any
Loan Papers on the part of the Borrower. To the extent not reimbursed by the
Borrower, each Lender hereby jointly and severally indemnifies and holds
harmless the Administrative Agent, pro rata according to its Specified
Percentage, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses and/or
disbursements of any kind or nature whatsoever which may be imposed on,
asserted against, or incurred by the Administrative Agent in any way with
respect to any Loan Papers or any action taken or omitted by the Administrative
Agent under the Loan Papers (including any negligent action of the
Administrative Agent), except to the extent the same result from gross
negligence or wilful misconduct by the Administrative Agent.
(g) Liability Among Lenders. No Lender shall incur any liability
(other than the sharing of expenses and other matters specifically set forth
herein and in the other Loan Papers) to any other Lender, except for acts or
omissions in bad faith.
(h) Rights as Lender. With respect to its commitment hereunder,
the Advances made by it and the Notes issued to it, the Administrative Agent
shall have the same rights as a Lender and may exercise the same as though it
were not the Administrative Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Administrative Agent in its
individual capacity as a Lender. The Administrative Agent or any Lender may
accept deposits from, act as trustee under indentures of, and generally engage
in any kind of business with, the Borrower and any of its Affiliates, and any
Person who may do business with or own securities
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of the Borrower or any of its Affiliates, all as if the Administrative Agent
were not the Administrative Agent hereunder and without any duty to account
therefor to the Lenders.
Section 9.2 Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Administrative Agent
or any other Lender and based upon the financial statements delivered to such
Lender by the Borrower, and such other 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
upon such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Papers.
Section 9.3 Benefits of Article. None of the provisions of this
Article shall inure to the benefit of any Person other than Lenders;
consequently, no other Person shall be entitled to rely upon, or to raise as a
defense, in any manner whatsoever, the failure of the Administrative Agent or
any Lender to comply with such provisions.
ARTICLE 10
Miscellaneous
Section 10.1 Notices.
(a) All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been given on the date
personally delivered or sent by telecopy (answerback received), or three days
after deposit in the mail, designated as certified mail, return receipt
requested, postage-prepaid, or one Business Day after being entrusted to a
reputable commercial overnight delivery service for next Business Day delivery,
or one day after being delivered to the telegraph office or sent out by telex
addressed to the party to which such notice is directed at its address
determined as provided in this Section. All notices and other communications
under this Agreement shall be given to the parties hereto at the following
addresses:
(i) If to the Borrower, at:
Cash America International, Inc.
1600 West Seventh Street
Fort Worth, Texas 76102
Attn: Thomas A. Bessant, Jr.
Telecopy No.: (817) 335-1119
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(ii) If to the Administrative Agent, at:
NationsBank of Texas, N.A.
901 Main Street, 67th Floor
Dallas, Texas 75202
Attn: Todd Shipley, Senior Vice President
Telecopy No.: (214) 508-0980
(iii) If to a Lender, at its address shown below its name
on the signature pages hereof, or if applicable, set
forth in its Assignment Agreement.
(b) Any party hereto may change the address to which notices shall
be directed by giving 10 days' written notice of such change to the other
parties.
Section 10.2 Expenses. The Borrower shall promptly pay:
(a) all reasonable out-of-pocket expenses of the Administrative
Agent in connection with the preparation, negotiation, execution and delivery
of this Agreement and the other Loan Papers, the transactions contemplated
hereunder and thereunder, and the making of Advances hereunder, including
without limitation the reasonable fees and disbursements of Special Counsel;
(b) all reasonable out-of-pocket expenses and attorneys' fees of
the Administrative Agent in connection with the administration of the
transactions contemplated in this Agreement and the other Loan Papers and the
preparation, negotiation, execution and delivery of any waiver, amendment or
consent by the Lenders relating to this Agreement or the other Loan Papers; and
(c) all costs, out-of-pocket expenses and attorneys' fees of the
Administrative Agent and each Lender incurred for enforcement, collection,
restructuring, refinancing and "work-out", or otherwise incurred in obtaining
performance under the Loan Papers, and all costs and out-of-pocket expenses of
collection, which in each case shall include without limitation fees and
expenses of consultants, counsel for the Administrative Agent and any Lender,
and administrative fees for the Administrative Agent.
Section 10.3 Waivers. The rights and remedies of the Lenders
under this Agreement and the other Loan Papers shall be cumulative and not
exclusive of any rights or remedies which they would otherwise have. No
failure or delay by the Administrative Agent or any Lender in exercising any
right shall operate as a waiver of such right. The Lenders expressly reserve
the right to require strict compliance with the terms of this Agreement in
connection with any funding of a request for an Advance. In the event that any
Lender decides to fund an Advance at a time when the Borrower is not in strict
compliance with the terms of this Agreement, such decision by such Lender shall
not be deemed to constitute an undertaking by the Lender to fund any further
requests for Advances or preclude the Lenders from exercising any rights
available under the Loan Papers or at law or in equity. Any waiver or
indulgence granted by the Lenders shall not
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constitute a modification of this Agreement, except to the extent expressly
provided in such waiver or indulgence, or constitute a course of dealing by the
Lenders at variance with the terms of the Agreement such as to require further
notice by the Lenders of the Lenders' intent to require strict adherence to the
terms of the Agreement in the future. Any such actions shall not in any way
affect the ability of the Administrative Agent or the Lenders, in their
discretion, to exercise any rights available to them under this Agreement or
under any other agreement, whether or not the Administrative Agent or any of
the Lenders are a party thereto, relating to the Borrower.
Section 10.4 Determination by the Lenders Conclusive and Binding.
Any material determination required or expressly permitted to be made by the
Administrative Agent or any Lender under this Agreement shall be made in its
reasonable judgment and in good faith, and shall when made, absent manifest
error, be conclusive and binding on all parties.
Section 10.5 Set-Off. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon the occurrence of an Event of Default, subject to the prior consent of the
Determining Lenders, each Lender and any subsequent holder of any Note, and any
Assignee or Participant in any Note is hereby authorized by the Borrower at any
time or from time to time, without prior notice to the Borrower or any other
Person, any such notice being hereby expressly waived, to set-off, appropriate
and apply any deposits (general or special (except trust and escrow accounts),
time or demand, including without limitation debt evidenced by certificates of
deposit, in each case whether matured or unmatured) and any other debt at any
time held or owing by such Lender or holder to or for the credit or the account
of the Borrower, against and on account of the Obligations of the Borrower to
such Lender or holder, irrespective of whether or not (a) the Lender or holder
shall have made any demand hereunder, or (b) the Lender or holder shall have
declared the principal of and interest on the Advances and other amounts due
hereunder to be due and payable as permitted by Section 7.2 and although such
Obligations, or any of them, shall be contingent or unmatured. Any sums
obtained by any Lender or by any Assignee, Participant or subsequent holder of
any Note shall be subject to pro rata treatment of all Obligations and other
liabilities hereunder as provided in Section 2.12 hereof. Each Lender agrees
to give the Borrower prompt written notice after the occurrence of any set-off,
appropriation or application of deposits.
Section 10.6 Assignment.
(a) The Borrower may not assign or transfer any of its rights or
obligations hereunder or under the other Loan Papers without the prior written
consent of the Lenders.
(b) No Lender shall be entitled to assign its interest in this
Agreement, its Notes or its Advances, except as hereinafter set forth.
(c) Without the prior written consent of the Borrower (except that
if a Lender desires to sell a participation in more than one-half (1/2) of its
Specified Percentage, the prior written consent of the Borrower shall be
required, which consent shall not be unreasonably withheld), a Lender
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may at any time sell participations in all or any part of its Advances, its
portion of the Commitment, and all other interests of such Lender under this
Agreement and the other Loan Papers (collectively, "Participations") to any
banks or other financial institutions ("Participants") provided that such
Participation shall not confer on any Person (other than the parties hereto)
any right to vote on, approve or sign amendments or waivers or consents, or any
other independent benefit or any legal or equitable right, remedy or other
claim under this Agreement or any other Loan Papers, other than the right to
vote on, approve, or sign amendments or waivers or consents with respect to
items that would result in (i) any increase in the commitment of any
Participant; or (ii)(A) the extension of the date of maturity of, or (B) the
extension of the due date for any payment of principal, interest or fees
respecting, or (C) the reduction of the amount of any installment of principal
or interest on or the change or reduction of any mandatory reduction required
hereunder, or (D) a reduction of the rate of interest on the Advances, or
change in Applicable Margin; or (iii) the release of security for the
Obligations, including without limitation any guarantee; or (iv) the reduction
of any fees payable hereunder. Notwithstanding the foregoing, the Borrower
agrees that the Participants shall be entitled to the benefits of Sections
2.15, 5.17, Article 8, Sections 10.2 and 10.5 hereof as though they were
Lenders and the Lenders may provide copies of all financial information
received from the Borrower to such Participants. To the fullest extent it may
effectively do so under Applicable Law, the Borrower agrees that any
Participant may exercise any and all rights of banker's lien, set-off and
counterclaim with respect to any Participation as fully as if such Participant
were the holder of the Advances in the amount of its Participation.
Notwithstanding anything in this Section 10.6(c) to the contrary, a Lender may
sell Participations to its Affiliates without the prior written consent of the
Borrower.
(d) Each Lender may assign to one or more financial institutions
or funds organized under the laws of the United States, or any state thereof,
or under the laws of any other country that is a member of the Organization for
Economic Cooperation and Development, or a political subdivision of any such
country, which is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business (each, an "Assignee")
its rights and obligations under this Agreement and the other Loan Papers;
provided, however, that (i) except as otherwise provided herein, each such
assignment shall be subject to the prior written consent of the Administrative
Agent and the Borrower (which consent shall not be unreasonably withheld), (ii)
each such assignment shall be of a constant, and not a varying, percentage of
the Lender's rights and obligations under this Agreement, (iii) the amount of
the Commitment and Advances being assigned pursuant to each such assignment
(determined as of the date of the assignment with respect to such assignment),
shall in no event be less than $5,000,000, (iv) the applicable Lender, the
Administrative Agent and applicable Assignee shall execute and deliver to the
Administrative Agent an Assignment and Acceptance Agreement (an "Assignment
Agreement") in substantially the form of Exhibit D hereto, together with the
Notes subject to such assignment, (v) the Assignee or the Lender executing the
Assignment as the case may be, shall deliver to the Administrative Agent a
processing fee of $3,500, and (vi) the Administrative Agent shall give the
Borrower notice of any proposed assignment no later than 30 days prior to any
assignment by any Lender. Upon such execution, delivery and acceptance from
and after the effective date specified in each
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Assignment, which effective date shall be at least three Business Days after
the execution thereof, (A) the Assignee thereunder shall be party hereto and,
to the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment, have the rights and obligations of a Lender
hereunder and (B) the assigning Lender shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment,
relinquish such rights and be released from such obligations under this
Agreement. Notwithstanding anything in this clause (d) to the contrary, any
Lender may assign its rights and obligations under this Agreement to an
affiliate of such Lender without the prior written consent of the
Administrative Agent and the Borrower, but otherwise subject to the
restrictions set forth herein.
(e) Notwithstanding anything in clause (d) above to the contrary,
any Lender may assign and pledge all or any portion of its Advances and Notes
to any Federal Reserve Bank as collateral security pursuant to Regulation A of
the Board or Governors of the Federal Reserve System of the United States and
any Operating Circular issued by such Federal Reserve Bank; provided, however,
that no such assignment under this clause (e) shall release the assignor Lender
from its obligations hereunder.
(f) Upon its receipt of an Assignment Agreement executed by a
Lender and an Assignee, and any Note subject to such assignment, the Borrower
shall promptly, at the assigning Lender's expense, execute and deliver to the
Administrative Agent in exchange for the surrendered Note a new Note to the
order of such Assignee in an amount equal to the portion of the Advances and
Commitment assigned to it pursuant to such Assignment Agreement and a new Note
to the order of the assigning Lender in an amount equal to the portion of the
Advances and Commitment retained by it hereunder. Such new Notes shall be in
an aggregate principal amount equal to the aggregate principal amount of such
surrendered Note, shall be dated the effective date of such Assignment
Agreement and shall otherwise be in substantially the form of Exhibit A hereto.
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
10.6 and with the consent of the Borrower, disclose to the Assignee or
Participant or proposed Assignee or Participant, any information relating to
the Borrower furnished to such Lender by or on behalf of the Borrower, subject
to the provisions of Section 10.10.
(h) Except as specifically set forth in this Section 10.6, nothing
in this Agreement or any other Loan Papers, expressed or implied, is intended
to or shall confer on any Person other than the respective parties hereto and
thereto and their successors and assignees permitted hereunder and thereunder
any benefit or any legal or equitable right, remedy or other claim under this
Agreement or any other Loan Papers.
(i) Notwithstanding anything in this Section 10.6 to the contrary,
no Assignee or Participant shall be entitled to receive any greater payment
under Sections 2.15, 5.17, Article 8, Section 10.2 or 10.5 hereof than such
assigning or participating Lender would have been entitled to receive with
respect to the interest assigned or participated to such Assignee or
Participant.
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Section 10.7 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
all such separate counterparts shall together constitute but one and the same
instrument.
Section 10.8 Severability. Any provision of this Agreement which
is for any reason prohibited or found or held invalid or unenforceable by any
Governmental Authority shall be ineffective to the extent of such prohibition
or invalidity or unenforceability without invalidating the remaining provisions
hereof in such jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 10.9 Interest and Charges. It is not the intention of any
parties to this Agreement to make an agreement in violation of the laws of any
applicable jurisdiction relating to usury. Regardless of any provision in any
Loan Papers, no Lender shall ever be entitled to receive, collect or apply, as
interest on the Obligations, any amount in excess of the Maximum Amount. If
any Lender or Participant ever receives, collects or applies, as interest, any
such excess, such amount which would be excessive interest shall be deemed a
partial repayment of principal and treated hereunder as such; and if principal
is paid in full, any remaining excess shall be paid to the Borrower. In
determining whether or not the interest paid or payable, under any specific
contingency, exceeds the Maximum Amount, the Borrower and the Lenders 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 effect thereof, and (c) amortize,
prorate, allocate and spread in equal parts, the total amount of interest
throughout the entire contemplated term of the Obligations so that the interest
rate is uniform throughout the entire term of the Obligations; provided,
however, that if the Obligations are paid and performed in full prior to the
end of the full contemplated term thereof, and if the interest received for the
actual period of existence thereof exceeds the Maximum Amount, the Lenders
shall refund to the Borrower the amount of such excess or credit the amount of
such excess against the total principal amount of the Obligations owing, and,
in such event, the Lenders shall not be subject to any penalties provided by
any Applicable Law for contracting for, charging or receiving interest in
excess of the Maximum Amount. This Section shall control every other provision
of all agreements pertaining to the transactions contemplated by or contained
in the Loan Papers.
Section 10.10 Confidentiality. Each Lender and the Administrative
Agent agrees (on behalf of itself and each of its affiliates, directors,
officers, employees and representatives) to use reasonable precautions to keep
confidential, in accordance with customary procedures for handling confidential
information of this nature and in accordance with safe and sound banking
practices, any non-public information supplied to it by the Borrower pursuant
to this Agreement which is identified by the Borrower as being confidential at
the time the same is delivered to the Lenders or the Administrative Agent,
provided that nothing herein shall limit the disclosure of any such information
(a) to the extent required by Applicable Law, (b) to counsel for any Lender or
the Administrative Agent, (c) to bank examiners, auditors or accountants of any
Lender, (d) to the Administrative Agent or any other Lender, (e) in connection
with any litigation to which any one
- 62 -
<PAGE> 70
or more of Lenders is a party, provided, further, that, unless specifically
prohibited by Applicable Law or court order, each Lender shall, prior to
disclosure thereof, notify the Borrower of any request for disclosure of any
such non-public information (i) by any Governmental Authority or representative
thereof (other than any such request in connection with an examination of such
Lender's financial condition by such Governmental Authority) or (ii) pursuant
to legal process, or (f) to any Assignee or Participant (or prospective
Assignee or Participant) so long as such recipient of such confidential
information agrees to keep such information confidential; and provided finally
that, upon request by the Borrower and subject to any regulatory requirements
or restrictions, each Lender and the Administrative Agent shall return any
materials furnished by the Borrower upon termination of this Agreement or when
any such Lender is no longer a party hereto.
Section 10.11 Headings. Headings used in this Agreement are for
convenience only and shall not be used in connection with the interpretation of
any provision hereof.
Section 10.12 Amendment and Waiver. The provisions of this
Agreement may not be amended, modified or waived except by the written
agreement of the Borrower and the Determining Lenders; provided, however, that
no such amendment, modification or waiver shall be made (a) without the consent
of all Lenders, if it would (i) increase the Specified Percentage or commitment
of any Lender, or (ii) extend the date of maturity of, extend the due date for
any payment of principal or interest on, reduce the amount of any installment
of principal or interest on, or reduce the rate of interest on, any Advance, or
other amount owing under any Loan Papers, or (iii) release any security for or
guaranty of the Obligations (except pursuant to this Agreement), or (iv) reduce
the fees payable hereunder, or (v) revise this Section 10.12, or (vi) waive the
date for payment of any of the Obligations, or (vii) amend the definition of
Determining Lenders; (b) without the consent of the Administrative Agent, if it
would alter the rights, duties or obligations of the Administrative Agent; or
(c) without the consent of the Swing Line Bank, if it would alter the rights,
duties or obligations of the Swing Line Bank. Neither this Agreement nor any
term hereof may be amended orally, nor may any provision hereof be waived
orally but only by an instrument in writing signed by the Administrative Agent
and, in the case of an amendment, by the Borrower.
SECTION 10.13 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN
PAPERS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF TEXAS; PROVIDED, HOWEVER, THAT PURSUANT TO ARTICLE 5069-15.10(B),
TITLE 79, REVISED CIVIL STATUTES OF TEXAS, 1925, AS AMENDED, IT IS AGREED THAT
THE PROVISIONS OF CHAPTER 15, TITLE 79, REVISED CIVIL STATUTES OF TEXAS, 1925,
AS AMENDED, SHALL NOT APPLY TO THE ADVANCES, THIS AGREEMENT AND THE OTHER LOAN
PAPERS. WITHOUT EXCLUDING ANY OTHER JURISDICTION, THE BORROWER AGREES THAT THE
STATE AND FEDERAL COURTS OF TEXAS LOCATED IN DALLAS, TEXAS SHALL HAVE
JURISDICTION OVER PROCEEDINGS IN CONNECTION WITH THIS AGREEMENT AND THE OTHER
LOAN PAPERS.
- 63 -
<PAGE> 71
SECTION 10.14 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER
WITH THE OTHER LOAN PAPERS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
- 64 -
<PAGE> 72
IN WITNESS WHEREOF, this Agreement is executed as of the date first set
forth above.
BORROWER: CASH AMERICA INTERNATIONAL, INC.
By: /s/ Thomas A. Bessant, Jr.
-----------------------------------------
Name: Thomas A. Bessant, Jr.
----------------------------------------
Title: Vice President - Finance and Treasurer
--------------------------------------
ADMINISTRATIVE AGENT: NATIONSBANK OF TEXAS, N.A.,
as Administrative Agent
By: /s/ Todd Shipley
-------------------------------------
Todd Shipley
Senior Vice President
LENDERS: NATIONSBANK OF TEXAS, N.A., as a Lender and Swing
Line Bank
Specified Percentage:
33.2%
By: /s/ Todd Shipley
-------------------------------------
Todd Shipley
Senior Vice President
901 Main Street, 67th Floor
Dallas, Texas 75202
Attn: Todd Shipley
Senior Vice President
Telecopy No.: (214) 508-0980
- 65 -
<PAGE> 73
WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION,
formerly known as First Interstate Bank of Texas, N.A.
Specified Percentage:
26.0%
By:/s/ Kimberly Welch
---------------------------------------
Kimberly Welch
Assistant Vice President
309 West Seventh Street, Suite 1100
Fort Worth, Texas 76102
Attn: Ms. Kimberly Welch
Telecopy No.: (817) 885-1110
BANK ONE, TEXAS, N.A.
Specified Percentage:
22.0%
By:/s/ Barry Kromann
---------------------------------------
Barry Kromann
Vice President
500 Throckmorton, 6th Floor
Fort Worth, Texas 76102
Attn: Mr. Barry Kromann
Telecopy No.: (817) 884-5697
CITIBANK, N.A.
Specified Percentage:
10.8%
By:/s/ Marjorie Futornick
-------------------------------------
Name: Marjorie Futornick
-----------------------------------
Title: Vice President
----------------------------------
400 Perimeter Center Terrace, Suite 600
Atlanta, Georgia 30346
Attn: Mr. Kirk Lakeman
Telecopy No.: (770) 668-8137
- 66 -
<PAGE> 74
THE SUMITOMO BANK, LIMITED
Specified Percentage:
8.0%
By:/s/ Kirk Stites
------------------------------------
Kirk Stites
Vice President
By:/s/ James T. Wang
-------------------------------------
Name: James T. Wang
-----------------------------------
Title: Vice President and Mangager
----------------------------------
1601 Elm Street, Suite 4250
Dallas, Texas 75201
Attn: Mr. Kirk Stites
Telecopy No.: (214) 979-0571
- 67 -
<PAGE> 75
SCHEDULE 1
LIBOR LENDING OFFICES
NATIONSBANK OF TEXAS, N.A.
901 Main Street, 67th Floor
Dallas, Texas 75202
WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION
309 West Seventh Street, Suite 1100
Fort Worth, Texas 76102
BANK ONE, TEXAS, N.A.
500 Throckmorton, 6th Floor
Fort Worth, Texas 76102
CITICORP, N.A.
400 Perimeter Center Terrace, Suite 600
Atlanta, Georgia 30346
THE SUMITOMO BANK, LIMITED
233 South Wacker Drive, Suite 5400
Chicago, Illinois 60606
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 2,092
<SECURITIES> 0
<RECEIVABLES> 107,617
<ALLOWANCES> 0
<INVENTORY> 47,617
<CURRENT-ASSETS> 173,042
<PP&E> 105,748
<DEPRECIATION> 43,852
<TOTAL-ASSETS> 307,322
<CURRENT-LIABILITIES> 17,220
<BONDS> 109,628
<COMMON> 3,024
0
0
<OTHER-SE> 177,450
<TOTAL-LIABILITY-AND-EQUITY> 307,322
<SALES> 91,135
<TOTAL-REVENUES> 134,467
<CGS> 56,699
<TOTAL-COSTS> 101,921
<OTHER-EXPENSES> 17,589
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,737
<INCOME-PRETAX> 9,733
<INCOME-TAX> 3,753
<INCOME-CONTINUING> 5,980
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
