Exhibit 10.9.4
 

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CONN’S, INC.
 
as Parent and Guarantor
 
and
 
CONN APPLIANCES, INC.,
 
CONN CREDIT I, LP, and
 
CONN CREDIT CORPORATION, INC.
 
as Borrowers

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AMENDED AND RESTATED
 
LOAN AND SECURITY AGREEMENT
 
Dated as of November 30, 2010
 
$375,000,000

 

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CERTAIN FINANCIAL INSTITUTIONS,
 
as Lenders,
 
BANK OF AMERICA, N.A.,
 
as Administrative Agent and Collateral Agent,
 
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, and
 
WELLS FARGO PREFERRED CAPITAL, INC.,
 
as Co-Syndication Agent,
 
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, and
 
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
 
as Joint Book Runner, and Co-Lead Arranger,
 
and
 
CAPITAL ONE, N.A., and
 
REGIONS BUSINESS CAPITAL, a division of REGIONS BANK,
 
as Co-Documentation Agent
 
 

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TABLE OF CONTENTS
 
 

    Page

SECTION 1.     DEFINITIONS; RULES OF CONSTRUCTION
1
1.1
Definitions
1
1.2
Accounting Terms
32
1.3
Uniform Commercial Code
32
1.4
Certain Matters of Construction
32
SECTION 2.     CREDIT FACILITIES
33
2.1
Revolver Commitment
33
2.2
Increase in Revolver Commitments.
35
2.3
Letter of Credit Facility
36
SECTION 3.     INTEREST, FEES AND CHARGES
39
3.1
Interest
39
3.2
Fees
40
3.3
Computation of Interest, Fees, Yield Protection
40
3.4
Reimbursement Obligations
41
3.5
Illegality
41
3.6
Inability to Determine Rates
41
3.7
Increased Costs; Capital Adequacy
42
3.8
Mitigation; Replacement of Foreign Lender
43
3.9
Funding Losses
44
3.10
Maximum Interest
44
SECTION 4.     LOAN ADMINISTRATION
44
4.1
Manner of Borrowing and Funding Revolver Loans
44
4.2
Defaulting Lender
46
4.3
Number and Amount of LIBOR Revolver Loans; Determination of Rate
46
4.4
Borrower Agent
46
4.5
One Obligation
47
4.6
Effect of Termination
47
SECTION 5.     PAYMENTS
47
5.1
General Payment Provisions
47
5.2
Repayment of Revolver Loans
47
5.3
Curative Equity
48
5.4
Payment of Other Obligations
48
5.5
Marshaling; Payments Set Aside
48
5.6
Post-Default Allocation of Payments
48
5.7
Application of Payments
49
5.8
Loan Account; Account Stated
49
5.9
Taxes
50
5.10
Lender Tax Information
50
5.11
Nature and Extent of Each Borrower’s Liability
51

 
 
 
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TABLE OF CONTENTS
(continued)

 

  Page

SECTION 6.     CONDITIONS PRECEDENT
53
6.1
Conditions Precedent to Initial Revolver Loans
53
6.2
Conditions Precedent to All Credit Extensions
55
6.3
Conditions Subsequent
56
SECTION 7.     COLLATERAL
56
7.1
Grant of Security Interest
56
7.2
Lien on Deposit Accounts; Cash Collateral
57
7.3
Real Estate Collateral
58
7.4
Other Collateral
58
7.5
No Assumption of Liability
59
7.6
Further Assurances
59
7.7
Foreign Subsidiary Stock
59
7.8
Contract Legend
59
SECTION 8.     COLLATERAL ADMINISTRATION
59
8.1
Collateral Reports
59
8.2
Administration of Contracts
60
8.3
Administration of Inventory
61
8.4
Administration of Equipment
62
8.5
Administration of Deposit Accounts
63
8.6
Administration of Credit Card Accounts
63
8.7
General Provisions
63
8.8
Power of Attorney
64
SECTION 9.     REPRESENTATIONS AND WARRANTIES
65
9.1
General Representations and Warranties
65
9.2
Complete Disclosure
69
SECTION 10.     COVENANTS AND CONTINUING AGREEMENTS
69
10.1
Affirmative Covenants
69
10.2
Negative Covenants
73
10.3
Financial Covenants
78
10.4
Curative Equity
78
10.5
Contract Forms
79
10.6
Credit and Collection Guidelines
79
10.7
Minimum Cash Recovery Percent
79
SECTION 11.     EVENTS OF DEFAULT; REMEDIES ON DEFAULT
79
11.1
Events of Default
79
11.2
Remedies upon Default
81
11.3
License
82

 
 
 
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TABLE OF CONTENTS
(continued)
 

    Page

11.4
Setoff
82
11.5
Remedies Cumulative; No Waiver
82
SECTION 12.     AGENT
83
12.1
Appointment, Authority and Duties of Agent
83
12.2
Agreements Regarding Collateral and Field Examination Reports
84
12.3
Reliance By Agent
85
12.4
Action Upon Default
85
12.5
Ratable Sharing
85
12.6
Indemnification of Agent Indemnitees
85
12.7
Limitation on Responsibilities of Agent
86
12.8
Successor Agent and Co-Agents
86
12.9
Due Diligence and Non-Reliance
87
12.10
Replacement of Certain Lenders
87
12.11
Remittance of Payments and Collections
87
12.12
Agent in its Individual Capacity
88
12.13
Agent Titles
88
12.14
Bank Product Providers
88
12.15
No Third Party Beneficiaries
89
SECTION 13.     BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS
89
13.1
Successors and Assigns
89
13.2
Participations
89
13.3
Assignments
90
SECTION 14.     MISCELLANEOUS
90
14.1
Consents, Amendments and Waivers
90
14.2
Indemnity
91
14.3
Notices and Communications
91
14.4
Performance of Borrowers’ Obligations
92
14.5
Credit Inquiries
92
14.6
Severability
92
14.7
Cumulative Effect; Conflict of Terms
93
14.8
Counterparts
93
14.9
Entire Agreement
93
14.10
Relationship with Lenders
93
14.11
No Advisory or Fiduciary Responsibility
93
14.12
Confidentiality
94
14.13
Intentionally Omitted
94
14.14
GOVERNING LAW
94
14.15
Consent to Forum; Arbitration
94
14.16
Waivers by Borrowers
96
14.17
Patriot Act Notice
96

 
 
 
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TABLE OF CONTENTS
(continued)

 

    Page

14.18
No Novation
96
14.19
Intercreditor Agreement
97
     

 
 
 
LIST OF EXHIBITS AND SCHEDULES

Exhibit A
Revolver Note
Exhibit B
Assignment and Acceptance
Exhibit C
Assignment Notice
Exhibit D
Officer’s Certificate
Exhibit E
Borrowing Base Certificate
   
Schedule 1.1
Revolver Commitments of Lenders
Schedule 1.1E(1)
Existing Bank Products
Schedule 1.1E(2)
Existing Letters of Credit
Schedule 1.1L
Leasehold Mortgages
Schedule 7.1(j)
Equity Interests
Schedule 7.3
Real Estate
Schedule 8.5
Deposit Accounts
Schedule 8.6.1
Credit Card Agreements
Schedule 8.7.1
Business Locations
Schedule 9.1.4
Names and Capital Structure
Schedule 9.1.5
Former Names and Companies
Schedule 9.1.11
Patents, Trademarks, Copyrights and Licenses
Schedule 9.1.14
Environmental Matters
Schedule 9.1.15
Restrictive Agreements
Schedule 9.1.16
Litigation
Schedule 9.1.18
Pension Plans
Schedule 9.1.20
Labor Contracts
Schedule 10.2.2
Existing Liens
Schedule 10.2.17
Existing Affiliate Transactions

 
 
 
iv 

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AMENDED AND RESTATED
 
LOAN AND SECURITY AGREEMENT
 
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is dated as of November
30, 2010, among CONN’S, INC., a Delaware corporation, as parent and guarantor
(“Parent”), CONN APPLIANCES, INC., a Texas corporation (“CAI”), CONN CREDIT I,
LP, a Texas limited partnership (“CCI”), and CONN CREDIT CORPORATION, INC., a
Texas corporation (“CCCI”, and together with CAI and CCI, collectively,
“Borrowers”), the financial institutions party to this Agreement from time to
time as lenders (collectively, “Lenders”), BANK OF AMERICA, N.A., a national
banking association, as Administrative Agent and Collateral Agent for the
Lenders (“Agent”) JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as Co-Syndication
Agent, Joint Book Runner and Co-Lead Arranger for the Lenders (“JPMorgan”),
WELLS FARGO PREFERRED CAPITAL, INC., as Co-Syndication Agent for the Lenders
(“WFPC”), MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as Joint Book
Runner and Co-Lead Arranger for the Lenders (“BAS”), CAPITAL ONE, N.A., as
Co-Documentation Agent for the Lenders (“Capital One”), and REGIONS BUSINESS
CAPITAL, a division of REGIONS BANK, as Co-Documentation Agent for the Lenders
(“Regions Bank”).
 
R E C I T A L S:
 
WHEREAS, Borrowers, Agent and various other lenders have previously entered into
a Loan and Security Agreement, dated as of August 14, 2008 (as amended, the
“Original Loan Agreement”);
 
WHEREAS, Borrowers have requested that Agent and Lenders amend and restate the
Original Loan Agreement to, among other things, make available to Borrowers a
revolving line of credit for loans and letters of credit in an aggregate amount
not to exceed $375,000,000, which extensions of credit Borrowers will use for
the purposes permitted hereunder;
 
WHEREAS, Agent and Lenders have agreed to make available to Borrowers, a
revolving credit facility upon the terms and conditions set forth in this
Agreement.
 
NOW, THEREFORE, in consideration of the mutual conditions and agreements set
forth in this Agreement, and for good and valuable consideration, the receipt of
which is hereby acknowledged, Lenders, Agent, Parent and Borrowers hereby agree
to amend and restate the Original Loan Agreement as follows:
 
SECTION 1.     DEFINITIONS; RULES OF CONSTRUCTION
 
1.1           Definitions.  As used herein, the following terms have the
meanings set forth below:
 
Account: as defined in the UCC, including all rights to payment for goods sold
or leased, or for services rendered.
 
Adjusted Borrowing Base:  the Borrowing Base minus the Availability Covenant
Amount.
 
Adjusted Tangible Assets: all assets of Parent and Borrowers on a consolidated
basis, except (a) patents, copyrights, trademarks, trade names, franchises,
goodwill, and other similar intangibles; (b) assets constituting intercompany
Accounts; (c) assets located and notes and receivables due from obligors
domiciled outside the United States of America or Canada; and (d) fixed assets
to the extent of any write-up in the book value thereof.
 
 
 
1

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Affiliate: with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.  “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise.  “Controlling” and
“Controlled” have correlative meanings.
 
Agent Indemnitees: Agent and its officers, directors, employees, Affiliates,
agents and attorneys.
 
Agent Professionals: attorneys, accountants, appraisers, auditors, business
valuation experts, environmental engineers or consultants, turnaround
consultants, and other professionals and experts retained by Agent.
 
Allocable Amount: as defined in Section 5.11.3(b).
 
Anti-Terrorism Laws: any laws relating to terrorism or money laundering,
including the Patriot Act.
 
Applicable Law: all laws, rules, regulations and governmental guidelines
applicable to the Person, conduct, transaction, agreement or matter in question,
including all applicable statutory law, common law and equitable principles, and
all provisions of constitutions, treaties, statutes, rules, regulations, orders
and decrees of Governmental Authorities.
 
Applicable Margin: with respect to any Type of Revolver Loan, the margin set
forth in the chart below, as determined by the Leverage Ratio for the last
Fiscal Quarter:
 

Level
Leverage
Ratio
Base Rate
Revolver Loans
LIBOR
Revolver Loans
       
I
< 1.25:1.00
2.75%
3.75%
II
> 1.25:1.00
3.00%
4.00%
       

Until March 31, 2011, margins shall be determined as if Level II were
applicable.  Thereafter, the margins shall be subject to increase or decrease
upon receipt by Agent of the financial statements and corresponding Compliance
Certificate for the most recently ended Fiscal Quarter delivered pursuant to
Section 10.1.2(d), which change shall be effective on the first day of the
calendar month following receipt.  If any financial statements and Compliance
Certificate due in the preceding Fiscal Quarter have not been received on the
due dates thereof, then the margins shall be determined as if Level II were
applicable, from such day until the first day of the calendar month following
actual receipt.
 
Approved Fund: any Person (other than a natural person) that is engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in its ordinary course of activities, and is
administered or managed by a Lender, an entity that administers or manages a
Lender, or an Affiliate of either.
 
 
 
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Asset Disposition: a sale, lease, license, consignment, transfer or other
disposition of Property of an Obligor, including a disposition of Property in
connection with a sale-leaseback transaction or synthetic lease.
 
Assignment and Acceptance: an assignment agreement between a Lender and Eligible
Assignee, in the form of Exhibit B.
 
Availability: the Borrowing Base minus the principal balance of all Revolver
Loans.
 
Availability Covenant Amount: $25,000,000 so long as any obligations under the
Term Loan Facility remain outstanding, and $0 at all times thereafter.
 
Bank of America: Bank of America, N.A., a national banking association, and its
successors and assigns.
 
Bank of America Indemnitees: Bank of America and its officers, directors,
employees, Affiliates, agents and attorneys.
 
Bank Product: any of the following products, services or facilities extended to
any Borrower or its Subsidiary by a Lender or any of its Affiliates: (a) Cash
Management Services; (b) products under Hedging Agreements; (c) commercial
credit card and merchant card services; and (d) leases and other banking
products or services as may be requested by any Borrower or its Subsidiary,
other than Letters of Credit.
 
Bank Product Debt: Debt and other obligations of an Obligor relating to Bank
Products.
 
Bank Product Reserve: the aggregate amount of reserves established by Agent from
time to time in its reasonable discretion in respect of Secured Bank Product
Obligations.
 
Bankruptcy Code: Title 11 of the United States Code.
 
Base Rate: for any day, a per annum rate equal to the greater of (a) the Prime
Rate for such day; (b) the Federal Funds Rate for such day, plus 0.50%; or (c)
LIBOR for a 30-day interest period as determined on such day, plus 1.0%.
 
Base Rate Revolver Loan: a Revolver Loan that bears interest based on the Base
Rate.
 
Board of Governors: the Board of Governors of the Federal Reserve System.
 
Borrowed Money: with respect to any Obligor, without duplication, its (a) Debt
that (i) arises from the lending of money by any Person to such Obligor, (ii) is
evidenced by notes, drafts, bonds, debentures, credit documents or similar
instruments, (iii) accrues interest or is a type upon which interest charges are
customarily paid (excluding trade payables owing in the Ordinary Course of
Business and obligations owing to Flooring Lenders), or (iv) was issued or
assumed as full or partial payment for Property; (b) Capital Leases; (c)
reimbursement obligations with respect to letters of credit; and (d) guaranties
of any Debt of the foregoing types owing by another Person.
 
 
 
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Borrower: as defined in the preamble of this Agreement.
 
Borrower Agent: as defined in Section 4.4.
 
Borrowing: a group of Revolver Loans of one Type that are made on the same day
or are converted into Revolver Loans of one Type on the same day.
 
Borrowing Availability: the Adjusted Borrowing Base minus the principal balance
of all Revolver Loans.
 
Borrowing Base: on any date of determination, an amount equal to the lesser of
(a) the aggregate amount of Revolver Commitments, minus the LC Reserve, minus
the Term Loan Borrowing Base Reserve; or (b) (i) the sum of the CCI Borrowing
Base, plus the CAI Borrowing Base, minus the Term Loan Borrowing Base Reserve.
 
Borrowing Base Certificate: a certificate, in form and substance satisfactory to
Agent (a form acceptable as of the Closing Date is attached as Exhibit E) by
which Borrowers certify calculation of the Borrowing Base, Adjusted Borrowing
Base and the Term Loan Borrowing Base.
 
Business Day: any day other than a Saturday, Sunday or any other day on which
commercial banks are authorized to close under the laws of, or are in fact
closed in, North Carolina, Texas and California, and if such day relates to a
LIBOR Revolver Loan, any such day on which dealings in Dollar deposits are
conducted between banks in the London interbank Eurodollar market.
 
CAI Availability Reserve:  the sum of (without duplication when taken into
account with the CCI Availability Reserve) (a) the Inventory Reserve; (b) the
Rent and Charges Reserve; (c) the LC Reserve; (d) the Bank Product Reserve;
(e) the Sales Tax Reserve; (f) the Gift Card Reserve; (g) the Customer Deposit
Reserve; (h) the aggregate amount of liabilities secured by Liens upon
Collateral that are senior to Agent’s Liens, other than the Liens of Term Agent
upon the Real Estate listed on Schedule 7.3 (but imposition of any such reserve
shall not waive an Event of Default arising therefrom); and (i) such additional
reserves, in such amounts and with respect to such matters, as Agent in its
reasonable judgment may elect to impose from time to time.
 
CAI Borrowing Base:  the sum of the Credit Card Account Formula Amount, plus the
Inventory Formula Amount, minus any CAI Availability Reserve.
 
CAIC: CAI Credit Insurance Agency, Inc., a Louisiana corporation.
 
CAIH: CAI Holding Co., a Delaware corporation.
 
Capital Expenditures: all liabilities incurred, expenditures made or payments
due (whether or not made) by any Borrower or any of its Subsidiaries for the
acquisition of any fixed assets, or any improvements, replacements,
substitutions or additions thereto with a useful life of more than one year,
including the principal portion of Capital Leases.
 
Capital Lease: any lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, except those Leases existing as of
the date of any change in GAAP that requires all leases to be capitalized for
financial statement purposes.
 
 
 
4

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Cash Collateral: cash, and any interest or other income earned thereon, that is
delivered to Agent to Cash Collateralize any Obligations.
 
Cash Collateral Account: a demand deposit, money market or other account
established by Agent at such financial institution as Agent may select in its
discretion, which account shall be subject to Agent’s Liens for the benefit of
Secured Parties.
 
Cash Collateralize: the delivery of cash to Agent, as security for the payment
of Obligations, in an amount equal to (a) with respect to LC Obligations, 105%
of the aggregate LC Obligations, and (b) with respect to other Obligations
(including Secured Bank Product Obligations), Agent’s good faith estimate of the
amount due or to become due, including all fees and other amounts relating to
such Obligations.  “Cash Collateralization” has a correlative meaning.
 
Cash Equivalents: (a) marketable obligations issued or unconditionally
guaranteed by, and backed by the full faith and credit of, the United States
government, maturing within 12 months of the date of acquisition; (b)
certificates of deposit, time deposits and bankers’ acceptances maturing within
12 months of the date of acquisition, and overnight bank deposits, in each case
which are issued by Bank of America or a commercial bank organized under the
laws of the United States or any state or district thereof, rated A-1 (or
better) by S&P or P-1 (or better) by Moody’s at the time of acquisition, and
(unless issued by a Lender) not subject to offset rights; (c) repurchase
obligations with a term of not more than 30 days for underlying investments of
the types described in clauses (a) and (b) entered into with any bank meeting
the qualifications specified in clause (b); (d) commercial paper issued by Bank
of America or rated A-1 (or better) by S&P or P-1 (or better) by Moody’s, and
maturing within nine months of the date of acquisition; and (e) shares of any
money market fund that has substantially all of its assets invested continuously
in the types of investments referred to above, has net assets of at least
$500,000,000 and has the highest rating obtainable from either Moody’s or S&P.
 
Cash Management Services: any services provided from time to time by any Lender
or any of its Affiliates to any Borrower or any its Subsidiaries in connection
with operating, collections, payroll, trust, or other depository or disbursement
accounts, including automated clearinghouse, e-payable, electronic funds
transfer, wire transfer, controlled disbursement, overdraft, depository,
information reporting, lockbox and stop payment services.
 
Cash Recovery Percent: the percent, calculated as of the end of the last day of
each month, equal to the amount determined by dividing (i) the actual Gross Cash
Collections received by Borrowers from payments made by Contract Debtors during
the previous three (3) months by (ii) the sum of the Gross Contract Payments
outstanding as of the beginning of the first day of each of the previous three
(3) months.
 
CCI Availability Reserve:  the sum of (without duplication when taken into
account with the CAI Availability Reserve) (a) the Rent and Charges Reserve; (b)
the LC Reserve; (c) the Bank Product Reserve; (d) the Sales Tax Reserve; (e) the
Service Maintenance Program Reserve; (f) the aggregate amount of liabilities
secured by Liens upon Collateral that are senior to Agent’s Liens, other than
the Liens of Term Agent upon the Real Estate listed on Schedule 7.3 (but
imposition of any such reserve shall not waive an Event of Default arising
therefrom); and (g) such additional reserves, in such amounts and with respect
to such matters, as Agent in its reasonable judgment may elect to impose from
time to time.
 
 
 
5

--------------------------------------------------------------------------------

 
 
 
CCI Borrowing Base:  the sum of the Contract Formula Amount, minus any CCI
Availability Reserve.
 
CCI Originator Notes:  the revolving subordinated promissory notes made by CCI
in favor of CAI evidencing that portion of the purchase price represented by
Debt incurred by CCI in connection with its purchase of contracts from CAI
pursuant to the CCI Receivables Purchase Agreement.
 
CCI Receivables Purchase Agreement: that certain Contract Receivables Purchase
Agreement entered into as of the Closing Date between CCI, as purchaser, CAI, as
originator and seller, together with all amendments, modifications and
supplements thereto, which agreement shall be in form and substance
substantially similar to the CCCI Receivables Purchase Agreement.
 
CCCI Originator Notes:  the revolving subordinated promissory notes made by CCI
in favor of CCCI evidencing that portion of the purchase price represented by
Debt incurred by CCI in connection with its purchase of contracts from CCCI
pursuant to the CCCI Receivables Purchase Agreement.
 
CCCI Receivables Purchase Agreement: that certain Contract Receivables Purchase
Agreement dated as of August 14, 2008 between CCI, as purchaser, CCCI, as
originator and seller, together with all amendments, modifications and
supplements thereto.
 
CERCLA: the Comprehensive Environmental Response Compensation and Liability Act
(42 U.S.C. § 9601 et seq.).
 
CFII Originator Note: the subordinated promissory note made by CCI in favor of
Conn Funding II, L.P., and transferred to CAI, evidencing that portion of the
purchase price represented by Debt incurred by CCI in connection with its
purchase of Contracts from Conn Funding II, L.P. pursuant to the CFII
Receivables Purchase Agreement.
 
CFII Receivables Purchase Agreement: that certain Receivables Purchase Agreement
dated as of the Closing Date between CCI, as purchaser, and Conn Funding II,
L.P., as seller, together with all amendments, modifications and supplements
thereto.
 
Change in Law: the occurrence, after the date hereof, of (a) the adoption or
taking effect of any law, rule, regulation or treaty; (b) any change in any law,
rule, regulation or treaty or in the administration, interpretation or
application thereof by any Governmental Authority; or (c) the making or issuance
of any request, guideline or directive (whether or not having the force of law)
by any Governmental Authority.
 
Change of Control: (a) Parent ceases to own and control, beneficially and of
record, directly or indirectly, all Equity Interests in CAI; (b) CAI ceases to
own and control, beneficially and of record, directly or indirectly, all Equity
Interests of CAIH, CCCI, CAIC, CCI and CLL; (c) a change in the majority of
directors of Parent, CAI, CAI Holding Co. or CCCI, unless approved by the then
majority of directors of such entity; or (d) all or substantially all of a
Borrower’s assets are sold or transferred, other than a sale or transfer to
another Borrower.
 
 
 
6

--------------------------------------------------------------------------------

 
 
 
Claims: all claims, liabilities, obligations, losses, damages, penalties,
judgments, proceedings, interest, costs and expenses of any kind (including
remedial response costs, reasonable attorneys’ fees and Extraordinary Expenses)
at any time (including after Full Payment of the Obligations, resignation or
replacement of Agent, or replacement of any Lender) incurred by or asserted
against any Indemnitee in any way relating to (a) any Revolver Loans, Letters of
Credit, Loan Documents, or the use thereof or transactions relating thereto, (b)
any action taken or omitted to be taken by any Indemnitee in connection with any
Loan Documents, (c) the existence or perfection of any Liens, or realization
upon any Collateral, (d) the exercise of any rights or remedies under any Loan
Documents or Applicable Law, or (e) the failure by any Obligor to perform or
observe any terms of any Loan Document, in each case including all costs and
expenses relating to any investigation, litigation, arbitration or other
proceeding (including an Insolvency Proceeding or appellate proceedings),
whether or not the applicable Indemnitee is a party thereto.
 
CLL: Conn Lending, LLC, a Delaware limited liability company.
 
Closing Date: as defined in Section 6.1.
 
Code: the Internal Revenue Code of 1986.
 
Collateral: all Property described in Section 7.1, all Property described in any
Security Documents as security for any Obligations, and all other Property that
now or hereafter secures (or is intended to secure) any Obligations.
 
Collateral Adjustment Percentage:  calculated as of the first day of each month,
the sum of the Past Due Percent and the Net Charge-Off Percent.
 
Compliance Certificate: a certificate, in form and substance satisfactory to
Agent, by which Borrowers certify compliance with Sections 10.2.3 and 10.3 and
calculate the applicable level for the Applicable Margin.
 
Contingent Obligation: any obligation of a Person (without duplication) arising
from a guaranty, indemnity or other assurance of payment or performance of any
Debt, lease, dividend or other obligation (“primary obligations”) of another
obligor (“primary obligor”) in any manner, whether directly or indirectly,
including any obligation of such Person under any (a) guaranty, endorsement,
co-making or sale with recourse of an obligation of a primary obligor; (b)
obligation to make take-or-pay or similar payments regardless of nonperformance
by any other party to an agreement; and (c) arrangement (i) to purchase any
primary obligation or security therefor, (ii) to supply funds for the purchase
or payment of any primary obligation, (iii) to maintain or assure working
capital, equity capital, net worth or solvency of the primary obligor, (iv) to
purchase Property or services for the purpose of assuring the ability of the
primary obligor to perform a primary obligation, or (v) otherwise to assure or
hold harmless the holder of any primary obligation against loss in respect
thereof.  The amount of any Contingent Obligation shall be deemed to be the
stated or determinable amount of the primary obligation (or, if less, the
maximum amount for which such Person may be liable under the instrument
evidencing the Contingent Obligation) or, if not stated or determinable, the
maximum reasonably anticipated liability with respect thereto.
 
Contract Advance Rate Amount:  75% of Net Eligible Contract Payments; provided,
that the Contract Advance Rate Amount shall be subject to reduction as of the
first day of each month, based on the then existing Collateral Adjustment
Percentage and Cash Recovery Percent (whichever results in the lower Contract
Advance Rate Amount), as follows:
 
 
 
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(a)           the Contract Advance Rate Amount shall be reduced by 1% for each
whole percentage or fraction thereof that the Collateral Adjustment Percentage
exceeds 15%; and
 
(b)           the Contract Advance Rate Amount shall be reduced based on the
Cash Recovery Percentage as set forth below:
 
Cash Recovery Percent
Contract Advance Rate Amount
< 4.99% > 4.94%
74% of Net Eligible Contract Payments
< 4.94% > 4.89%
73% of Net Eligible Contract Payments
< 4.89% > 4.84%
72% of Net Eligible Contract Payments
< 4.84% > 4.79%
71% of Net Eligible Contract Payments
< 4.79% > 4.74%
70% of Net Eligible Contract Payments

 
Contract Allocation Agreement: an agreement in form and substance satisfactory
to Agent between a Borrower and the Securitization Subsidiary, pursuant to which
certain Contracts are randomly designated as Securitized Contracts and are
allocated to the Securitization Subsidiary.
 
Contract Debtor: each Person who is obligated to a Borrower to perform any duty
under or to make any payment pursuant to the terms of a Contract.
 
Contract Formula Amounts: the lesser of (i) the Contract Advance Rate Amount,
and (ii) 85% of the appraised value of Gross Contract Payments as set forth in
the most recent appraisal of Borrowers’ Contracts performed by an appraiser and
on terms satisfactory to Agent; provided, that the limitation set forth in
clause (ii) hereof shall be applicable only so long as any obligations under the
Term Loan Facility remain outstanding.  Notwithstanding the above, the portion
of the Contract Formula Amount supported by Eligible Revolving Contracts shall
at no time exceed 10% of the CCI Borrowing Base.
 
Contracts: all of each Borrower’s now owned and hereafter acquired loan
agreements, accounts, revolving credit agreements, installment sale contracts,
Instruments, notes, documents, chattel paper, and all other forms of obligations
owing to such Borrower, including any collateral for any of the foregoing,
including all rights under any and all security documents and merchandise
returned to or repossessed by such Borrower. For the avoidance of doubt, all
Contracts shall include the Contracts assigned to a Borrower pursuant to the
Intercompany Assignment Agreement.
 
Credit Card Account: Accounts together with all income, payments and proceeds
thereof, owed by a Credit Card Issuer or Credit Card Processor to a Borrower
resulting from charges by a retail customer of a Borrower on credit or debit
cards in connection with the sale of goods by a Borrower, or services performed
by a Borrower, in each case in the Ordinary Course of Business.
 
Credit Card Account Formula Amount: 75% of the Value of Eligible Credit Card
Accounts.
 
Credit Card Agreements: with respect to each Borrower, all agreements now or
hereafter entered into by such Borrower with any Credit Card Issuer or any
Credit Card Processor, as the same now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
 
 
 
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Credit Card Issuers: any person (other than a Borrower) who issues or whose
members issue credit cards, including, MasterCard or VISA bank credit or debit
cards or other bank credit or debit cards issued through MasterCard
International, Inc., VISA, U.S.A., Inc. or Visa International and American
Express, Discover, Diners Club, Carte Blanche and other non-bank credit or debit
cards.
 
Credit Card Processor Notifications: with respect to each Borrower, individually
and collectively, the letter agreements executed by such Borrower and delivered
to such Borrower’s Credit Card Issuers or Credit Card Processors who are parties
to Credit Card Agreements, acknowledging Agent’s first priority Lien and the
Term Agent’s second priority Lien in the monies due and to become due to such
Borrower under the Credit Card Agreements of such Borrower, and instructing such
Credit Card Issuers or Credit Card Processors to transfer all such amounts to
the Dominion Accounts, as the same now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
 
Credit Card Processors: with respect to each Borrower, any servicing or
processing agent or any financial intermediary who facilitates, services,
processes or manages the credit authorization, billing transfer and/or payment
procedures with respect to any of such Borrower’s sales transactions involving
credit card or debit card purchases by customers using credit cards or debit
cards issued by any Credit Card Issuer.
 
Credit and Collection Guidelines: Borrowers’ guidelines (which have previously
been reviewed and approved by the Agent) which state in detail the credit
criteria used by Borrowers in determining the creditworthiness of Contract
Debtors and the collection criteria used by Borrowers in collection of amounts
due from Contract Debtors.
 
Curative Equity: common equity contributions made to Parent which Parent
contributes as additional common equity contributions to any Borrower and which
is designated “Curative Equity” by Borrower Agent under Section 10.4 at the time
it is contributed.
 
Customer Deposit Reserve:  as of any measurement date, a reserve equal to the
aggregate amount of deposits paid by the customers of any Borrower for the
purchase of goods.
 
CWA: the Clean Water Act (33 U.S.C. §§ 1251 et seq.).
 
Debt: as applied to any Person, without duplication, (a) all items that would be
included as liabilities on a balance sheet in accordance with GAAP, including
Capital Leases, but excluding trade payables, accrued expenses and deferred
revenues incurred and being paid in the Ordinary Course of Business and amounts
owed to Flooring Lenders on account of flooring arrangements paid in the
Ordinary Course of Business; (b) all Contingent Obligations; (c) all
reimbursement obligations in connection with letters of credit issued for the
account of such Person; and (d) in the case of a Borrower, the Obligations.  The
Debt of a Person shall include any recourse Debt of any partnership in which
such Person is a general partner or joint venturer.
 
Default: an event or condition that, with the lapse of time or giving of notice,
would constitute an Event of Default.
 
Default Rate: for any Obligation (including, to the extent permitted by law,
interest not paid when due), 2% plus the interest rate otherwise applicable
thereto.
 
 
 
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Defaulting Lender: any Lender that, as determined by Agent, (a) has failed to
perform any funding obligations hereunder, and such failure is not cured within
three Business Days; (b) has notified Agent or any Borrower that such Lender
does not intend to comply with its funding obligations hereunder or has made a
public statement to the effect that it does not intend to comply with its
funding obligations hereunder or under any other credit facility; (c) has
failed, within three Business Days following request by Agent, to confirm in a
manner satisfactory to Agent that such Lender will comply with its funding
obligations hereunder; or (d) has, or has a direct or indirect parent company
that has, become the subject of an Insolvency Proceeding or taken any action in
furtherance thereof.
 
Deposit Account Control Agreements:  the Deposit Account control agreements to
be executed by each institution maintaining a Deposit Account for a Borrower, in
favor of Agent and Term Agent, as security for the Obligations.
 
Distribution: any declaration or payment of a distribution, interest or dividend
on any Equity Interest (other than payment-in-kind); any distribution, advance
or repayment of Debt to a holder of Equity Interests; or any purchase,
redemption, or other acquisition or retirement for value of any Equity Interest.
 
Dollars: lawful money of the United States.
 
Dominion Accounts: special accounts established by Borrowers at Bank of America
or other banks acceptable to Agent, over which Agent has exclusive control for
withdrawal purposes.
 
Dominion Trigger Period: the period (a) commencing on the day that (i) an Event
of Default occurs; (ii) average Availability during a month (as reflected in the
Loan Account) is less than 15% of the amount of aggregate outstanding Revolver
Loans and stated amount of Letters of Credit; or (iii) Availability is at any
time less than 10% amount of aggregate outstanding Revolver Loans and stated
amount of Letters of Credit, and (b) ending on the day (i) on which, during the
preceding 90 consecutive days, (x) no Event of Default has existed, (y)
Availability has at all times been greater than 10% of the amount of aggregate
outstanding Revolver Loans and stated amount of Letters of Credit, and (z)
average Availability has at all times been greater than 15% of the amount of
aggregate outstanding Revolver Loans and stated amount of Letters of Credit;
provided, that this clause (b)(i) shall only be applicable to the first
commencement of such period hereunder, and (ii) determined by Agent in its sole
discretion for any subsequent commencement of such period; provided, that with
respect to any subsequent commencement of such period in order for the period to
end the requirements in clause (b)(i) shall be satisfied.
 
EBITDAR: as of any date of determination, on a trailing 12-month basis and
determined on a consolidated basis for Parent and its Subsidiaries derived from
financial statements prepared in accordance with GAAP, net income, calculated
before interest expense, provision for income taxes, depreciation and
amortization expense, stock based compensation, book rent expense, gains or
losses arising from the sale of capital assets, any extraordinary gains or
losses (in each case, to the extent included in determining net income) (except
that net cash extraordinary gains or losses included in the determination of
EBITDAR will not exceed $5,000,000 in any trailing twelve month period;
provided, that this parenthetical shall be applicable only so long as any
obligations under the Term Loan Facility remain outstanding), and reduced on a
Fiscal Quarter basis or such other determination date by an amount equal to (if
a positive result) the sum of the EBITDAR Loss Reserve measured as of the end of
any Fiscal Quarter or such other determination date, minus Borrowers’ recorded
loss reserve measured as of the end of the same Fiscal Quarter or such other
determination date.
 
 
 
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EBITDAR Loss Reserve: at any date is the sum of (i) Net Charge-Offs for the
12-month period ending on the measurement date, plus (ii) the net change in Net
Balances over 180 days past due for the 12-month period ending on the
measurement date.
 
Eligible Assignee: a Person that is (a) a Lender, U.S.-based Affiliate of a
Lender or Approved Fund or a Term Lender under the Term Loan Agreement; (b) any
other financial institution approved by Agent and Borrower Agent (which approval
by Borrower Agent shall not be unreasonably withheld or delayed, and shall be
deemed given if no objection is made within two Business Days after notice of
the proposed assignment), that is organized under the laws of the United States
or any state or district thereof, has total assets in excess of $5 billion,
extends asset-based lending facilities in its ordinary course of business and
whose becoming an assignee would not constitute a prohibited transaction under
Section 4975 of the Code or any other Applicable Law; and (c) during any Event
of Default, any Person acceptable to Agent in its discretion; provided, that
none of Parent or its Subsidiaries may be an Eligible Assignee.
 
Eligible Contracts: those Contracts owned by a Borrower that Agent, in its
reasonable judgment, deems to be Eligible Contracts.  Without limiting the
foregoing, no Contract shall be an Eligible Contract unless:
 
(a)           Such Contract is owned by a Borrower and such Borrower has good
and marketable title to such Contract free and clear of any Lien of any Person
other than Agent and Term Agent;
 
(b)           the Contract complies in all material respects with all of
Borrowers’ warranties and representations contained herein;
 
(c)           no payment due under the Contract is more than 60 days
contractually delinquent;
 
(d)           neither a Borrower nor the Contract Debtor is in default under the
terms of the Contract;
 
(e)           no Borrower has within any 12-month period granted to the Contract
Debtor more than 2 extensions of time (each not longer than 1 month) for the
payment of any sum due under the Contract;
 
(f)           the Contract or payments due thereunder are not subject to any
defense, counterclaim, offset, discount, or allowance other than discounts
provided in connection with promotional credit, such as same as cash offerings
or deferred interest programs;
 
(g)           the terms of the Contract and all related documents and
Instruments comply in all respects with all Requirement of Law;
 
(h)           the Contract Debtor is not an Affiliate or an employee of an
Obligor;
 
(i)           the creditworthiness of the Contract Debtor is acceptable to Agent
and the Contract and Contract Debtor conform to the Credit and Collection
Guidelines in all material respects;
 
 
 
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(j)           the Contract Debtor is not subject to an active or pending
Insolvency Proceeding under Federal law or any similar proceeding under state
law and the applicable Borrower is able to bring suit or enforce remedies
against such Contract Debtor through judicial process;
 
(k)           the first scheduled payment pursuant to the terms of the Contract
is, or was, due within 45 days following the execution of the Contract and all
other payments are scheduled to be made on the same date of each month
thereafter;
 
(l)           the payment schedule for such Contract is fully amortizing on a
monthly basis;
 
(m)           with respect to installment Contracts only, the original term of
the Contract is not more than 48 months;
 
(n)           repayment of the Contract is secured by a first priority interest
in any merchandise sold in connection therewith;
 
(o)           to the extent that the balance of the Contract includes sums
representing the financing of “service maintenance plans,” such plans are in
compliance with all applicable consumer credit laws, including any and all
special insurance laws relating thereto;
 
(p)           the Contract is not a Modified Contract;
 
(q)           the Contract is originated or acquired in the Ordinary Course of
Business;
 
(r)           Agent has a first priority perfected Lien in the Contract; and
 
(s)           the merchandise, if any, which secures the Contract has been
delivered to the Contract Debtor and has not been repossessed by a Borrower or
returned by the Contract Debtor to a Borrower.
 
Eligible Credit Card Accounts: Credit Card Accounts that Agent, in its
discretion, deems to be Eligible Credit Card Accounts.  Without limiting the
foregoing, no Credit Card Account shall be an Eligible Credit Card Account
unless:
 
(a)           such Credit Card Account is owned by a Borrower and such Borrower
has good and marketable title to such Credit Card Account free and clear of any
Lien of any Person other than Agent and Term Agent;
 
(b)           such Credit Card Account constitutes an “Account” (as defined in
the UCC) and such Credit Card Account has not been outstanding for more than 5
Business Days;
 
(c)           the Credit Card Issuer or Credit Card Processor of the applicable
credit card with respect to such Credit Card Account is not the subject of any
bankruptcy or insolvency proceedings;
 
(d)           such Credit Card Account is a valid, legally enforceable
obligation of the applicable issuer with respect thereto;
 
(e)           such Credit Card Account is subject to a properly perfected first
priority Lien in favor of Agent;
 
 
 
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(f)           the Credit Card Account conforms to all representations,
warranties or other provisions in the Loan Documents relating to Credit Card
Account;
 
(g)           such Credit Card Account is owed by a Person that has executed a
Credit Card Processor Notification;
 
(h)           such Credit Card Account is not evidenced by “chattel paper” or an
“instrument” of any kind unless such “chattel paper” or “instrument” is in the
possession of Agent, and to the extent necessary or appropriate, endorsed to
Agent;
 
(i)           such Credit Card Account indicates no Person other than a Borrower
as payee or remittance party;
 
(j)           such Credit Card Account has been earned and represents the bona
fide amounts due to a Borrower from a Credit Card Processor and/or Credit Card
Issuer, and in each case originated in the Ordinary Course of Business; or
 
(k)           such Credit Card Account has not been disputed, is without
recourse, and with respect to which no claim, counterclaim, offset, or
chargeback has been asserted (to the extent of such claim, counterclaim, offset,
or chargeback).
 
Eligible Inventory: Inventory owned by a Borrower that Agent, in its reasonable
judgment, deems to be Eligible Inventory.  Without limiting the foregoing, no
Inventory shall be Eligible Inventory unless it (a) is finished goods and not
raw materials, work-in-process, packaging or shipping materials, labels,
samples, display items, bags, replacement parts or manufacturing supplies; (b)
is not held on consignment, nor subject to any deposit or downpayment; (c) is in
new and saleable condition and is not damaged, defective, shopworn or otherwise
unfit for sale; (d) is not slow-moving, obsolete or unmerchantable, and does not
constitute returned or repossessed goods; (e) meets all standards imposed by any
Governmental Authority, and does not constitute hazardous materials under any
Environmental Law; (f) conforms with the covenants and representations herein;
(g) is subject to Agent’s duly perfected, first priority Lien, and no other Lien
(including Liens in favor of Flooring Lenders) other than the Lien in favor of
Term Agent; (h) is within the continental United States, is not in transit
except between locations of Borrowers, is not consigned to any Person and is not
located in a clearance center or service center; (i) is not subject to any
warehouse receipt or negotiable Document; (j) is not subject to any License or
other arrangement that restricts such Borrower’s or Agent’s right to dispose of
such Inventory (other than the Term Loan Documents, with respect to the
Borrowers, and the Intercreditor Agreement, with respect to Agent), unless Agent
has received an appropriate Lien Waiver; (k) is not located on leased premises
or in the possession of a warehouseman, processor, repairman, mechanic, shipper,
freight forwarder or other Person, unless the lessor or such Person has
delivered a Lien Waiver or an appropriate Rent and Charges Reserve has been
established as set forth in Section 6.4.1; (l) is reported net of internal load
amount or shrinkage accrual; (m) is reflected in the details of a current
perpetual inventory report of Borrowers; and (n) is insured in compliance with
the provisions of Section 8.7.2 hereof.
 
Eligible Revolving Contract:  Eligible Contract under which the applicable
Contract Debtor may borrow, repay and re-borrow up to the credit limit
thereunder.
 
 
 
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Enforcement Action: any action to enforce any Obligations (other than Secured
Bank Product Obligations) or Loan Documents or to exercise any rights or
remedies relating to any Collateral (whether by judicial action, self-help,
notification of Contract Debtors, exercise of setoff or recoupment, exercise of
any right to vote or act in an Obligor’s Insolvency Proceeding or otherwise).
 
Environmental Agreement: each agreement of Borrowers with respect to any Real
Estate subject to a Mortgage, pursuant to which Borrowers agree to indemnify and
hold harmless Agent and Lenders from liability under any Environmental Laws.
 
Environmental Laws: all Applicable Laws (including all programs, permits and
guidance promulgated by regulatory agencies), relating to public health (but
excluding occupational safety and health, to the extent regulated by OSHA) or
the protection or pollution of the environment, including CERCLA, RCRA and CWA.
 
Environmental Notice: a notice (whether written or oral) from any Governmental
Authority or other Person of any possible noncompliance with, investigation of a
possible violation of, litigation relating to, or potential fine or liability
under any Environmental Law, or with respect to any Environmental Release,
environmental pollution or hazardous materials, including any complaint,
summons, citation, order, claim, demand or request for correction, remediation
or otherwise.
 
Environmental Release: a release as defined in CERCLA or under any other
Environmental Law.
 
Equity Interest: the interest of any (a) shareholder in a corporation; (b)
partner in a partnership (whether general, limited, limited liability or joint
venture); (c) member in a limited liability company; or (d) other Person having
any other form of equity security or ownership interest.
 
Equity Interest Pledge Agreement: a pledge agreement, in form and substance
satisfactory to Agent, executed by Parent, CAIH and CLL, granting a security
interest in the Equity Interests in each of such grantor’s Subsidiaries in favor
of Agent for the benefit of the Lenders.
 
ERISA: the Employee Retirement Income Security Act of 1974.
 
ERISA Affiliate: any trade or business (whether or not incorporated) under
common control with an Obligor within the meaning of Section 414(b) or (c) of
the Code (and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).
 
ERISA Event: (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by any Obligor or ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by any Obligor or ERISA Affiliate from a Multiemployer Plan
or notification that a Multiemployer Plan is in reorganization; (d) the filing
of a notice of intent to terminate, the treatment of a Plan amendment as a
termination under Section 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)
any Obligor or ERISA Affiliate fails to meet any funding obligations with
respect to any Pension Plan or Multiemployer Plan, or requests a minimum funding
waiver; (f) an event or condition which constitutes grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Pension Plan or Multiemployer Plan; or (g) the imposition of any liability
under Title IV of ERISA, other than for PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon any Obligor or ERISA Affiliate.
 
 
 
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Event of Default: as defined in Section 11.
 
Excluded Subsidiary: Conn Funding II, L.P., a Texas limited partnership, Conn
Appliances, LLC, a Delaware limited liability company, and Conn Funding GP II,
L.L.C., a Texas limited liability company.
 
Excluded Tax: with respect to Agent, any Lender, Issuing Bank or any other
recipient of a payment to be made by or on account of any Obligation, (a) taxes
imposed on or measured by its overall net income (however denominated), and
franchise taxes imposed on it (in lieu of net income taxes by the United States
or any State or political subdivision thereof), by the jurisdiction (or any
political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable Lending Office is located; (b) any branch
profits taxes imposed by the United States or any similar tax imposed by any
State or any other jurisdiction in which a Borrower is located, (c) any backup
withholding tax that is required by the Code to be withheld from amounts payable
to a Lender that has failed to comply with Section 5.10, and (d) in the case of
a Foreign Lender, any State or United States withholding tax that (i) is
required to be imposed on amounts payable to such Foreign Lender pursuant to the
laws in force at the time such Foreign Lender becomes a party hereto (or
designates a new Lending Office) hereunder or (ii) is attributable to such
Lender’s failure or inability (other than as a result of a Change in Law) to
comply with Section 5.10, except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new Lending
Office (or assignment), to receive additional amounts from the Borrower with
respect to such withholding tax pursuant to Section 5.9.1 or (iii) and which
withholding tax may not be eliminated or reduced by complying with Section 5.10.
 
Existing Bank Products: Bank Products provided under the Original Loan Agreement
and in existence on the Closing Date consisting of those listed on Schedule
1.1E(1).
 
Existing Letters of Credit: the issued and outstanding letters of credit set
forth in Schedule 1.1E(2).
 
Existing Securitization Facility:  the asset backed security facility
established pursuant to the Base Indenture dated September 1, 2002 between Conn
Funding II, L.P. and Wells Fargo Bank, National Association, together with all
amendments, modifications and supplements thereto.
 
Extraordinary Expenses: all costs, expenses or advances that Agent or any Lender
may incur during a Default or Event of Default, or during the pendency of an
Insolvency Proceeding of an Obligor, including those relating to (a) any audit,
inspection, repossession, storage, repair, appraisal, insurance, manufacture,
preparation or advertising for sale, sale, collection, or other preservation of
or realization upon any Collateral; (b) any action, arbitration or other
proceeding (whether instituted by or against Agent, any Lender, any Obligor, any
representative of creditors of an Obligor or any other Person) in any way
relating to any Collateral (including the validity, perfection, priority or
avoidability of Agent’s Liens with respect to any Collateral), Loan Documents,
Letters of Credit or Obligations, including any lender liability or other
Claims; (c) the exercise, protection or enforcement of any rights or remedies of
Agent in, or the monitoring of, any Insolvency Proceeding; (d) settlement or
satisfaction of any taxes, charges or Liens with respect to any Collateral; (e)
any Enforcement Action; (f) negotiation and documentation of any
 
 
 
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modification, waiver, workout, restructuring or forbearance with respect to any
Loan Documents or Obligations; and (g) Protective Advances.  Such costs,
expenses and advances include transfer fees, Other Taxes, storage fees,
insurance costs, permit fees, utility reservation and standby fees, legal fees,
appraisal fees, brokers’ fees and commissions, auctioneers’ fees and
commissions, accountants’ fees, environmental study fees, wages and salaries
paid to employees of any Obligor or independent contractors in liquidating any
Collateral, and travel expenses.
 
Federal Funds Rate: (a) the weighted average of interest rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers on the applicable Business Day (or on the preceding
Business Day, if the applicable day is not a Business Day), as published by the
Federal Reserve Bank of New York on the next Business Day; or (b) if no such
rate is published on the next Business Day, the average rate (rounded up, if
necessary, to the nearest 1/8 of 1%) charged to Bank of America on the
applicable day on such transactions, as determined by Agent.
 
Fee Letter: (a) the fee letter agreement between Agent, BAS and Borrowers dated
as of even date herewith, and (b) the fee letter agreement between JPMorgan,
J.P. Morgan Securities Inc. and Borrowers dated as of even date herewith.
 
Fiscal Quarter: each period of three months, commencing on the first day of a
Fiscal Year.
 
Fiscal Year: the fiscal year of Parent and its Subsidiaries for accounting and
tax purposes, ending on January 31 of each year.
 
Fixed Charge Coverage Ratio: the ratio, determined monthly on a consolidated
basis for Parent and its Subsidiaries for the most recently ended 12-month
period, of (a) EBITDAR minus unfinanced Net Capital Expenditures (but, as long
as any obligations under the Term Loan Facility remain outstanding, only to the
extent that a positive result would occur), to (b) Fixed Charges; provided, that
the Fixed Charge Coverage Ratio shall be determined quarterly on a consolidated
basis for Parent and its Subsidiaries for the most recently ended four Fiscal
Quarters after all obligations under the Term Loan Facility have been
terminated.
 
Fixed Charges: without double counting, the sum of interest expense (other than
payment-in-kind and original issue discount), scheduled/amortized principal
payments made on Borrowed Money, un-scheduled principal payments made on
Borrowed Money (other than payments on account of the Obligations or any other
revolving Debt permitted hereunder), book rent expense, cash income taxes paid,
and Distributions made, excluding amortization of closing costs and expenses
incurred in connection with the Loan Documents, Existing Securitization
Facility, Permitted ABS Facility and the Term Loan Facility.
 
Flooring Intercreditor Agreement: each intercreditor agreement entered into by
Agent and a Flooring Lender, in form and substance satisfactory to Agent.
 
Flooring Lender: any lender which provides financing for the purchase of
Inventory by a Borrower.
 
 
 
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FLSA: the Fair Labor Standards Act of 1938.
 
Foreign Lender: any Lender that is organized under the laws of a jurisdiction
other than the laws of the United States, or any state or district thereof.
 
Foreign Plan: any employee benefit plan or arrangement (a) maintained or
contributed to by any Obligor or its Subsidiary that is not subject to the laws
of the United States; or (b) mandated by a government other than the United
States for employees of any Obligor or its Subsidiary.
 
Foreign Subsidiary: a Subsidiary of Parent that is a “controlled foreign
corporation” under Section 957 of the Code, such that a guaranty by such
Subsidiary of the Obligations or a Lien on the assets of such Subsidiary to
secure the Obligations would result in material tax liability to Borrowers.
 
Full Payment: with respect to any Obligations, (a) the full and indefeasible
cash payment thereof, including any interest, fees and other charges accruing
during an Insolvency Proceeding (whether or not allowed in the proceeding); (b)
if such Obligations are LC Obligations or inchoate or contingent in nature, Cash
Collateralization thereof (or delivery of a standby letter of credit acceptable
to Agent in its discretion, in the amount of required Cash Collateral); and (c)
a release of any Claims of Obligors against Agent, Lenders and Issuing Bank
arising on or before the payment date.  No Revolver Loans shall be deemed to
have been paid in full until all Revolver Commitments related to such Revolver
Loans have expired or been terminated.
 
GAAP: generally accepted accounting principles in effect in the United States
from time to time.
 
Gift Card Reserve: a reserve equal to 50% of the face amount of gift cards which
are issued by a Borrower and are outstanding as of any measurement date.
 
Governmental Approvals: all authorizations, consents, approvals, licenses and
exemptions of, registrations and filings with, and required reports to, all
Governmental Authorities.
 
Governmental Authority: any federal, state, municipal, foreign or other
governmental department, agency, commission, board, bureau, court, tribunal,
instrumentality, political subdivision, or other entity or officer exercising
executive, legislative, judicial, regulatory or administrative functions for or
pertaining to any government or court, in each case whether associated with the
United States, a state, district or territory thereof, or a foreign entity or
government.
 
Gross Cash Collections:  total Contracts payments received from Contract Debtors
and applied to such Contracts during any applicable period.
 
Gross Contract Payments: as of the date of determination, (i) with respect to an
interest bearing Contract the outstanding balance thereof including all accrued
but unpaid interest, fees, and other charges, but excluding late charges, owing
by the Contract Debtor and (ii) with respect to a precomputed Contract the
outstanding balance thereof including all unearned interest, fees, and charges,
but excluding late charges, owing by the Contract Debtor.
 
Guarantor Payment: as defined in Section 5.11.3(b).
 
 
 
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Guarantors:  Parent, CAIH, CAIC, CLL, CAIAir, Inc., a Delaware corporation, and
each other Person who guarantees payment or performance of any Obligations.
 
Guaranty: each guaranty agreement executed by a Guarantor in favor of Agent.
 
Hedging Agreement: an agreement relating to any swap, cap, floor, collar,
option, forward, cross right or obligation, or combination thereof or similar
transaction, with respect to interest rate, foreign exchange, currency,
commodity, credit or equity risk.
 
Increased Reporting Period:  any time (i) a Default or Event of Default exists,
(ii) average Availability during any month (as reflected in the Loan Account) is
less than 20% of the amount of aggregate outstanding Revolver Loans and stated
amount of Letters of Credit, or (iii) Availability is at any time less than
$50,000,000; provided, that the limitation set forth in clause (iii) hereof
shall be applicable only so long as any obligations under the Term Loan Facility
remain outstanding.  When in place, such Increased Reporting Period shall be
deemed continuing so long as (a) such Event of Default has not been waived,
and/or (ii) if the Increased Reporting Period arises as a result of Borrowers’
failure to achieve Availability as required hereunder, until Availability has
exceeded $50,000,000 for ninety (90) consecutive days, in which case an
Increased Reporting Period shall no longer be deemed to be continuing for
purposes of this Agreement; provided, that an Increased Reporting Period shall
be deemed continuing (even if an Event of Default is no longer continuing and/or
Availability exceeds the required amount for ninety (90) consecutive days) at
all times after an Increased Reporting Period has occurred and been discontinued
on two (2) occasions after the Closing Date.
 
Indemnified Taxes: Taxes other than Excluded Taxes.
 
Indemnitees: Agent Indemnitees, Lender Indemnitees, Issuing Bank Indemnitees and
Bank of America Indemnitees.
 
Insolvency Proceeding: any case or proceeding commenced by or against a Person
under any state, federal or foreign law for, or any agreement of such Person to,
(a) the entry of an order for relief under the Bankruptcy Code, or any other
insolvency, debtor relief or debt adjustment law; (b) the appointment of a
receiver, trustee, liquidator, administrator, conservator or other custodian for
such Person or any part of its Property; or (c) an assignment or trust mortgage
for the benefit of creditors.
 
Intellectual Property: all intellectual and similar Property of a Person,
including inventions, designs, patents, copyrights, trademarks, service marks,
trade names, trade secrets, confidential or proprietary information, customer
lists, know-how, software and databases; all embodiments or fixations thereof
and all related documentation, applications, registrations and franchises; all
licenses or other rights to use any of the foregoing; and all books and records
relating to the foregoing.
 
Intellectual Property Claim: any claim or assertion (whether in writing, by suit
or otherwise) that a Borrower’s or its Subsidiary’s ownership, use, marketing,
sale or distribution of any Inventory, Equipment, Intellectual Property or other
Property violates another Person’s Intellectual Property.
 
 
 
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Intercompany Assignment Agreement:  (i) an assignment from each Excluded
Subsidiary to a Borrower, assigning to such Borrower all of the assets of such
Excluded Subsidiary free and clear of any Liens, which agreement shall be in
form and substance satisfactory to Agent, and (ii) an assignment pursuant to
which the assets transferred under clause (i) above are assigned to CCI free and
clear of any Liens, which agreement shall be in form and substance satisfactory
to Agent.
 
Intercreditor Agreement:  an intercreditor agreement entered into by Agent, Term
Agent, Parent, and Borrowers, in form and substance satisfactory to Agent.
 
Interest Period: as defined in Section 3.1.3.
 
Inventory: as defined in the UCC, including all goods intended for sale, lease,
display or demonstration; all work in process; and all raw materials, and other
materials and supplies of any kind that are or could be used in connection with
the manufacture, printing, packing, shipping, advertising, sale, lease or
furnishing of such goods, or otherwise used or consumed in a Borrower’s business
(but excluding Equipment).
 
Inventory Formula Amount: the lesser of (i) $80,000,000; (ii) 75% of the Value
of Eligible Inventory; or (iii) 85% of the NOLV Percentage of the Value of
Eligible Inventory.
 
Inventory Reserve: reserves established by Agent to reflect factors that may
negatively impact the Value of Inventory, including change in salability,
obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or
mix, markdowns and vendor chargebacks.
 
Investment: any acquisition of all or substantially all assets of a Person; any
acquisition of record or beneficial ownership of any Equity Interests of a
Person; or any advance or capital contribution to or other investment in a
Person.
 
IRS: the United States Internal Revenue Service.
 
Issuing Bank: Bank of America or an Affiliate of Bank of America and any other
Lender which has issued an Existing Letter of Credit but only with respect to
such Existing Letter of Credit.
 
Issuing Bank Indemnitees: Issuing Bank and its officers, directors, employees,
Affiliates, agents and attorneys.
 
LC Application: an application by Borrower Agent to Issuing Bank for issuance of
a Letter of Credit, in form and substance satisfactory to Issuing Bank.
 
LC Conditions: the following conditions, the satisfaction of which is necessary
for issuance of a Letter of Credit by Issuing Bank: (a) each of the conditions
set forth in Section 6; (b) after giving effect to such issuance, total LC
Obligations do not exceed the Letter of Credit Subline, no Overadvance exists
and, if no Revolver Loans are outstanding, the LC Obligations do not exceed the
Adjusted Borrowing Base (without giving effect to the LC Reserve for purposes of
this calculation); (c) the expiration date of such Letter of Credit is (i) no
more than 365 days from issuance, in the case of standby Letters of Credit, (ii)
no more than 120 days from issuance, in the case of documentary Letters of
Credit, and (iii) at least 30 Business Days prior to the Revolver Termination
Date; (d) the Letter of Credit and payments thereunder are denominated in
Dollars; and (e) the purpose and form of the proposed Letter of Credit is
satisfactory to Agent and Issuing Bank in their discretion.
 
 
 
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LC Documents: all documents, instruments and agreements (including LC Requests
and LC Applications) delivered by Borrowers or any other Person to Issuing Bank
or Agent in connection with issuance, amendment or renewal of, or payment under,
any Letter of Credit.
 
LC Obligations: the sum (without duplication) of (a) all amounts owing by
Borrowers for any drawings under Letters of Credit; (b) the stated amount of all
outstanding Letters of Credit; and (c) all fees and other amounts owing with
respect to Letters of Credit.
 
LC Request: a request for issuance of a Letter of Credit, to be provided by
Borrower Agent to Issuing Bank, in form satisfactory to Agent and Issuing Bank.
 
LC Reserve: the aggregate of all LC Obligations, other than (a) those that have
been Cash Collateralized; and (b) if no Default or Event of Default exists,
those constituting charges owing to the Issuing Bank.
 
Leasehold Mortgages: each of the mortgages and deeds of trust, in form and
substance reasonably acceptable to Agent, executed by a Borrower in favor of
Agent, for the benefit of the Lenders, with respect to the leasehold interests
of Borrowers in the Real Estate identified on Schedule 1.1L.
 
Leasehold Mortgage Consent: each consent signed by the land owner for each Real
Estate subject to a Leasehold Mortgage, in form and substance reasonably
acceptable to Agent.
 
Lender Indemnitees: Lenders and their officers, directors, employees,
Affiliates, agents and attorneys.
 
Lenders: as defined in the preamble to this Agreement, including Agent in its
capacity as a provider of Swingline Loans and any other Person who hereafter
becomes a “Lender” pursuant to an Assignment and Acceptance.
 
Lending Office: the office designated as such by the applicable Lender at the
time it becomes party to this Agreement or thereafter by notice to Agent and
Borrower Agent.
 
Letter of Credit: any standby or documentary letter of credit issued by Issuing
Bank for the account of a Borrower, including the Existing Letters of Credit, or
any indemnity, guarantee, exposure transmittal memorandum or similar form of
credit support issued by Agent or Issuing Bank for the benefit of a Borrower.
 
Letter of Credit Subline:  $40,000,000.
 
Leverage Ratio: the ratio, determined as of the end of any Fiscal Quarter for
the Parent and its Subsidiaries, on a consolidated basis, of (a) all items that
would be included as liabilities on a balance sheet in accordance with GAAP as
of the last day of such Fiscal Quarter, to (b) Tangible Net Worth as of the last
day of such Fiscal Quarter.
 
LIBOR: for any Interest Period with respect to a LIBOR Revolver Loan, the per
annum rate of interest (rounded up, if necessary, to the nearest 1/100th of 1%),
determined by Agent at approximately 11:00 a.m. (London time) two Business Days
prior to commencement of such Interest Period, for a term comparable to such
Interest Period, equal to (a) the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other
 
 
 
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commercially available source designated by Agent); or (b) if BBA LIBOR is not
available for any reason, the interest rate at which Dollar deposits in the
approximate amount of the LIBOR Revolver Loan would be offered by Bank of
America’s London branch to major banks in the London interbank Eurodollar
market.  If the Board of Governors imposes a Reserve Percentage with respect to
LIBOR deposits, then LIBOR shall be the foregoing rate, divided by 1 minus the
Reserve Percentage.
 
LIBOR Revolver Loan: a Revolver Loan that bears interest based on LIBOR.
 
License: any license or agreement under which an Obligor is authorized to use
Intellectual Property in connection with any manufacture, marketing,
distribution or disposition of Collateral, any use of Property or any other
conduct of its business.
 
Licensor: any Person from whom an Obligor obtains the right to use any
Intellectual Property.
 
Lien: any Person’s interest in Property securing an obligation owed to, or a
claim by, such Person, whether such interest is based on common law, statute or
contract, including liens, security interests, pledges, hypothecations,
statutory trusts, reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Property.
 
Lien Waiver: an agreement, in form and substance satisfactory to Agent, by which
(a) for any material Collateral located on leased premises, the lessor waives or
subordinates any Lien it may have on the Collateral, and agrees to permit Agent
and Term Agent to enter upon the premises and remove the Collateral or to use
the premises to store or dispose of the Collateral; (b) for any Collateral held
by a warehouseman, processor, shipper, customs broker or freight forwarder, such
Person waives or subordinates any Lien it may have on the Collateral, agrees to
hold any Documents in its possession relating to the Collateral as agent for
Agent and Term Agent, and agrees to deliver the Collateral to Agent and Term
Agent upon request; (c) for any Collateral held by a repairman, mechanic or
bailee, such Person acknowledges Agent’s and Term Agent’s Lien, waives or
subordinates any Lien it may have on the Collateral, and agrees to deliver the
Collateral to Agent and Term Agent upon request; and (d) for any Collateral
subject to a Licensor’s Intellectual Property rights, the Licensor grants to
Agent and Term Agent the right, vis-à-vis such Licensor, to enforce Agent’s and
Term Agent’s Liens with respect to the Collateral, including the right to
dispose of it with the benefit of the Intellectual Property, whether or not a
default exists under any applicable License.
 
Loan Account: the loan account established by each Lender on its books pursuant
to Section 5.8.
 
Loan Documents: this Agreement, Other Agreements, Security Documents, the
Intercreditor Agreement and the Flooring Intercreditor Agreements.
 
Loan Year: each 12-month period commencing on the Closing Date and on each
anniversary of the Closing Date.
 
Margin Stock: as defined in Regulation U of the Board of Governors.
 
 
 
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Material Adverse Effect: the effect of any event or circumstance that, taken
alone or in conjunction with other events or circumstances, (a) has or could be
reasonably expected to have a material adverse effect on the business,
operations, Properties, prospects or condition (financial or otherwise) of
Obligors, on the value of any material Collateral, on the enforceability of any
Loan Documents, or on the validity or priority of Agent’s Liens on any
Collateral; (b) impairs the ability of the Obligors, collectively, to perform
any obligations under the Loan Documents, including repayment of any
Obligations; or (c) otherwise materially impairs the ability of Agent or any
Lender to enforce or collect any Obligations or to realize upon any Collateral.
 
Material Contract: any agreement or arrangement to which a Borrower or any of
its Subsidiaries are a party (other than the Loan Documents) (a) that is deemed
to be a material contract under any securities law applicable to such Obligor,
including the Securities Act of 1933; (b) for which breach, termination,
nonperformance or failure to renew could reasonably be expected to have a
Material Adverse Effect; or (c) that relates to Subordinated Debt, or Debt in an
aggregate amount of $5,000,000 or more.
 
Modified Contract: a Contract which, at any time, was in payment default for
more than 60 days and such payment default was cured by execution of a new
Contract in order to adjust, amend, or reduce the payment terms of the original
Contract.
 
Moody’s: Moody’s Investors Service, Inc., and its successors.
 
Mortgage: each mortgage, deed of trust or deed to secure debt pursuant to which
a Borrower grants to Agent, for the benefit of Secured Parties, Liens upon the
Real Estate owned by such Borrower, as security for the Obligations.
 
Multiemployer Plan: any employee benefit plan of the type described in Section
4001(a)(3) of ERISA, to which any Obligor or ERISA Affiliate makes or is
obligated to make contributions, or during the preceding five plan years, has
made or been obligated to make contributions.
 
Net Balance: means, as of the date of determination, the Gross Contract Payments
of a Contract less all unearned interest owing by the Contract Debtor.
 
Net Capital Expenditures:  Capital Expenditures less: (i) net proceeds received
from the sale of any fixed assets in the ordinary course of business and (ii)
net proceeds from the sale of Real Estate to the extent constituting a Capital
Expenditure, not to exceed $10,000,000, and only to the extent such Real Estate
was acquired in the applicable trailing twelve month period; provided, that
after all obligations under the Term Loan Facility have been terminated, Net
Capital Expenditures shall mean Capital Expenditures less net proceeds received
from the sale of any fixed assets.
 
Net Charge-Off: for any period, the aggregate amount of all unpaid payments due
under Contracts which have been charged off by a Borrower during such period, as
reduced by the amount of unearned interest, unearned insurance, accrued but
unpaid interest, unpaid late charges, repossession recoveries, cash recoveries
and amounts recovered in cash from other third parties, with respect to
Contracts which had been charged off during previous periods or during such
period.
 
 
 
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Net Charge-Off Percent: the percent, calculated on the first day of each month,
equal to (a) 4 times the aggregate amount of Net Charge-Offs for the 3 preceding
months, divided by (b) the sum of the Net Balance owing under all Contracts
outstanding at the end of such month, divided by (c) 3.
 
Net Eligible Contract Payments: means, as of the date of determination, the
remainder of (a) the Gross Contract Payments owing under all Eligible Contracts,
minus (b) the sum of (i) the aggregate amount, to the extent included within the
definition of Gross Contract Payments, all unearned interest, fees, and charges
applicable to the Eligible Contracts and (ii) the unearned insurance commissions
as presented on the books and records of Borrowers.
 
Net Proceeds: with respect to an Asset Disposition, proceeds (including, when
received, any deferred or escrowed payments) received by a Borrower or any of
its Subsidiaries in cash from such disposition, net of (a) reasonable and
customary costs and expenses actually incurred in connection therewith,
including legal fees and sales commissions; (b) amounts applied to repayment of
Debt secured by a Permitted Lien senior to Agent’s Liens on Collateral sold; (c)
transfer or similar taxes; and (d) reserves for indemnities, until such reserves
are no longer needed.
 
NOLV Percentage: the net orderly liquidation value of Inventory, expressed as a
percentage, expected to be realized at an orderly, negotiated sale held within a
reasonable period of time, net of all liquidation expenses, as determined from
the most recent appraisal of Borrowers’ Inventory performed by an appraiser and
on terms satisfactory to Agent.
 
Non-Exempt Foreign Lender: as defined in Section 3.8.2(a).
 
Notes: each Revolver Note or other promissory note executed by a Borrower to
evidence any Obligations.
 
Notice of Borrowing: a Notice of Borrowing to be provided by Borrower Agent to
request a Borrowing of Revolver Loans, in form satisfactory to Agent or through
electronic means acceptable to Agent.
 
Notice of Conversion/Continuation: a Notice of Conversion/Continuation to be
provided by Borrower Agent to request a conversion or continuation of any
Revolver Loans as LIBOR Revolver Loans, in form satisfactory to Agent or through
electronic means acceptable to Agent.
 
Noticed Hedge: Secured Bank Product Obligations arising under a Hedging
Agreement.
 
Obligations: all (a) principal of and premium, if any, on the Revolver Loans,
(b) LC Obligations and other obligations of Obligors with respect to Letters of
Credit, (c) interest, expenses, fees and other sums payable by Obligors under
Loan Documents, (d) obligations of Obligors under any indemnity for Claims, (e)
Extraordinary Expenses, (f) Secured Bank Product Obligations, and (g) other
Debts, obligations and liabilities of any kind owing by Obligors pursuant to the
Loan Documents, whether now existing or hereafter arising, whether evidenced by
a note or other writing, whether allowed in any Insolvency Proceeding, whether
arising from an extension of credit, issuance of a letter of credit, acceptance,
loan, guaranty, indemnification or otherwise, and whether direct or indirect,
absolute or contingent, due or to become due, primary or secondary, or joint or
several.
 
 
 
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Obligor: each Borrower, Guarantor, or other Person that is liable for payment of
any Obligations or that has granted a Lien in favor of Agent on its assets to
secure any Obligations.
 
Ordinary Course of Business: the ordinary course of business of any Borrower or
its Subsidiary, consistent with past practices and undertaken in good faith.
 
Organic Documents: with respect to any Person, its charter, certificate or
articles of incorporation, bylaws, articles of organization, limited liability
agreement, operating agreement, members agreement, shareholders agreement,
partnership agreement, certificate of partnership, certificate of formation,
voting trust agreement, or similar agreement or instrument governing the
formation or operation of such Person.
 
Original Loan Agreement:  as defined in the recitals hereto.
 
OSHA: the Occupational Safety and Hazard Act of 1970.
 
Other Agreement: each Note; LC Document; Fee Letter; Lien Waiver; Borrowing Base
Certificate, Compliance Certificate, Permitted ABS Intercreditor Agreement,
financial statement or report delivered hereunder; or other document, instrument
or agreement (other than this Agreement or a Security Document) now or hereafter
delivered by an Obligor or other Person to Agent or a Lender in connection with
any transactions relating hereto.
 
Other Taxes: all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment
made under any Loan Document or from the execution, delivery or enforcement of,
or otherwise with respect to, any Loan Document.
 
Overadvance: as defined in Section 2.1.5.
 
Overadvance Loan: a Base Rate Revolver Loan made when an Overadvance exists or
is caused by the funding thereof.
 
Parent: as defined in the Preamble to this Agreement.
 
Participant: as defined in Section 13.2.
 
Past Due Percent: the percent, calculated as of the beginning of the first day
of each month, equal to (a) the Gross Contract Payments owing under all
Contracts (excluding Contracts charged-off), as to which any portion of an
installment due thereunder is more than 30 days past due as determined on a
contractual basis as of the last day of the month immediately preceding the date
of calculation, divided by (b) the Gross Contract Payments owing under all
Contracts (excluding Contracts charged-off) as of the last day of the month
immediately preceding the date of calculation.
 
Patriot Act: the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No.
107-56, 115 Stat. 272 (2001).
 
Payment Item: each check, draft or other item of payment payable to a Borrower,
including those constituting proceeds of any Collateral.
 
PBGC: the Pension Benefit Guaranty Corporation.
 
 
 
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Pension Plan: any employee pension benefit plan (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to
Title IV of ERISA and is sponsored or maintained by any Obligor or ERISA
Affiliate or to which the Obligor or ERISA Affiliate contributes or has an
obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any time during
the preceding five plan years.
 
Permitted ABS Agent: the entity acting as trustee of the Permitted ABS Facility.
 
Permitted ABS Documents: the Permitted ABS Financing Agreement, the Permitted
ABS Purchase Agreement and all documents, instruments and agreements executed in
connection therewith, as the same may be amended, modified, restated or extended
from time to time.
 
Permitted ABS Facility: means a securitization facility, pursuant to which any
Borrower will, from time to time, sell and transfer certain Securitized
Contracts and related security to a Securitization Subsidiary, pursuant to the
Permitted ABS Purchase Agreement, which in turn such Securitization Subsidiary
has granted a security interest on such Securitized Contracts and related
security to Permitted ABS Agent, for the benefit of certain secured parties,
pursuant to the Permitted ABS Financing Agreement.
 
Permitted ABS Financing Agreement: a Securitized Contracts financing agreement
by and between a Securitization Subsidiary and the Permitted ABS Agent, as the
same may be amended, modified or supplemented from time to time and which prior
to its execution by such Securitization Subsidiary, shall be in form and
substance approved by Agent and Required Lenders, which approval will not be
unreasonably withheld, delayed or conditioned; provided, that the Securitized
Contracts financed by such Permitted ABS Financing Agreement shall (A) include
no lesser percentage of receivables, the original final maturity date of which
has been extended in accordance with the policies of Parent and its Subsidiaries
in existence on the Closing Date than in the absence of such Permitted ABS
Facility, (B) include no lesser percentage of receivables as to which all or any
part of a scheduled payment remains unpaid for 60 days or more from its due date
than in the absence of such Permitted ABS Facility and (C) have a weighted
average FICO score (based on the relevant obligors on such receivables) that is
not greater than the weighted average FICO score of the portfolio in the absence
of such Permitted ABS Facility.
 
Permitted ABS Intercreditor Agreement: an intercreditor agreement by and among
Permitted ABS Agent and Agent, as may be amended, modified or otherwise restated
from time to time and shall be in form and substance reasonably acceptable to
Agent and Required Lenders.
 
Permitted ABS Originator Notes:  the subordinated promissory notes, in form and
substance reasonably acceptable to Agent, made by Securitization Subsidiary in
favor of a Borrower evidencing that portion of the purchase price represented by
Debt incurred by Securitization Subsidiary in connection with its purchase of
Securitization Contracts and related assets from a Borrower pursuant to the
Permitted ABS Purchase Agreement.
 
Permitted ABS Purchase Agreement: a purchase and sale agreement by and between a
Borrower and a Securitization Subsidiary, which agreement shall be in form and
substance reasonably acceptable to Agent and Required Lenders.
 
 
 
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Permitted Asset Disposition: (i) as long as no Default or Event of Default
exists and all Net Proceeds are remitted to the Dominion Account or to Term
Agent to prepay the Term Loan if required pursuant to the terms of the Term Loan
Agreement, an Asset Disposition that is (a) a sale of Inventory in the Ordinary
Course of Business; (b) a disposition of Equipment (other than those set forth
in subsection (e) below), that, in the aggregate during any 12-month period, has
a fair market or book value (whichever is more) of $5,000,000 or less; (c) a
disposition of Inventory that is obsolete, unmerchantable or otherwise unsalable
in the Ordinary Course of Business; (d) termination of a lease of real or
personal Property that is not necessary for the Ordinary Course of Business,
could not reasonably be expected to have a Material Adverse Effect and does not
result from an Obligor’s default; (e) a disposition of any Borrower’s Real
Estate and related Equipment affixed thereto in connection with a sale or
sale-leaseback transaction so long as (x) the Net Proceeds received from the
sale of (A) any Real Estate listed on Schedule 7.3 pursuant to such transaction
are not less than the liquidation value of such Real Estate, as determined by
the most recent appraisal of such Real Estate received by Agent using an
appraiser and methodology reasonably acceptable to Agent and (B) any other Real
Estate pursuant to such transaction are not less than the amount for which
Borrowers purchased such Real Estate, (y) the Net Proceeds received from the
sale of such Real Estate listed on Schedule 7.3 (less any amount applied to
repay any Debt secured by a Lien on such Real Estate incurred pursuant to a
refinancing of such Real Estate listed on Schedule 7.3 permitted pursuant to
Section 10.2.1(i) hereof) shall be applied to prepay the Term Loan in accordance
with Section 5.2.2 of the Term Loan Agreement (together with any prepayment fee
then due, if any, under Section 5.2.3 of the Term Loan Agreement), and (z) the
terms of such transaction are otherwise reasonably acceptable to Agent; (ii) a
Permitted Contract Transfer, (iii) granting of Liens (subject to the
Intercreditor Agreement) to secure the obligations under the Term Loan
Documents, or (iv) approved in writing by Agent and Required Lenders, such
approval not to be unreasonably withheld, delayed or conditioned; provided, that
the limitations in subclauses (i)(x) and (i)(y) shall be applicable only so long
as any obligations under the Term Loan Facility remain outstanding.
 
Permitted Contingent Obligations: Contingent Obligations (a) arising from
endorsements of Payment Items for collection or deposit in the Ordinary Course
of Business; (b) arising from Hedging Agreements permitted hereunder; (c)
existing on the Closing Date, and any extension or renewal thereof that does not
increase the amount of such Contingent Obligation when extended or renewed; (d)
incurred in the Ordinary Course of Business with respect to surety, appeal or
performance bonds, or other similar obligations; (e) arising from customary
indemnification obligations in favor of purchasers in connection with
dispositions of Equipment permitted hereunder; (f) arising under the Loan
Documents; or (g) all other Contingent Obligations in an aggregate amount of
$10,000,000 or less at any time.
 
Permitted Contract Transfer: (i) a sale by a Borrower to a Securitization
Subsidiary of Securitized Contracts pursuant to the Permitted ABS Purchase
Agreement, so long as the net proceeds of each such sale of such Contracts
exceed the Contract Advance Rate Amount with respect to such Contracts and,
unless remitted to the Term Agent to repay the Term Loan as set forth in the
Term Loan Agreement, if requested by Agent and the Lenders, remitted directly to
Agent from such Securitization Subsidiary or Borrower to be applied to the
outstanding Revolver Loans (subject to Section 5.6.1) as set forth hereunder
(which application shall not result in a reduction of the Commitments except as
permitted by Section 2.1.4), and (ii) the granting by a Securitization
Subsidiary to Permitted ABS Agent of a security interest in such Securitized
Contracts pursuant to the Permitted ABS Financing Agreement.
 
 
 
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Permitted Distribution: so long as immediately before and after giving effect
thereto, (i) no Default or Event of Default exists, (ii) Availability is not
less than 20% of the amount of aggregate outstanding Revolver Loans and stated
amount of Letters of Credit, (iii) projected Availability for the succeeding
6-month period is greater than 20% of the amount of aggregate outstanding
Revolver Loans and stated amount of Letters of Credit, and (iv) Supermajority
Lenders have provided written consent thereto, Parent or any Borrower may
declare and make Distributions which are approved by Parent’s board of directors
so long as the aggregate amount of Distributions made shall at no time exceed
$50,000,000.
 
Permitted Lien: as defined in Section 10.2.2.
 
Permitted Purchase Money Debt: Purchase Money Debt of Borrowers and its
Subsidiaries that is unsecured or secured only by a Purchase Money Lien, as long
as the aggregate amount does not exceed $15,000,000 at any time and its
incurrence does not violate Section 10.2.3.
 
Person: any individual, corporation, limited liability company, partnership,
joint venture, joint stock company, land trust, business trust, unincorporated
organization, Governmental Authority or other entity.
 
Plan: any employee benefit plan (as such term is defined in Section 3(3) of
ERISA) established by an Obligor or, with respect to any such plan that is
subject to Section 412 of the Code or Title IV of ERISA, an ERISA Affiliate.
 
Prime Rate: the rate of interest announced by Bank of America from time to time
as its prime rate.  Such rate is set by Bank of America on the basis of various
factors, including its costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which
may be priced at, above or below such rate.  Any change in such rate announced
by Bank of America shall take effect at the opening of business on the day
specified in the public announcement of such change.
 
Pro Rata: with respect to any Lender, a percentage (carried out to the ninth
decimal place) determined (a) while Revolver Commitments are outstanding, by
dividing the amount of such Lender’s Revolver Commitment by the aggregate amount
of all Revolver Commitments; and (b) at any other time, by dividing the amount
of such Lender’s Revolver Loans and LC Obligations by the aggregate amount of
all outstanding Revolver Loans and LC Obligations.
 
Properly Contested: with respect to any obligation of an Obligor, (a) the
obligation is subject to a bona fide dispute regarding amount or the Obligor’s
liability to pay; (b) the obligation is being properly contested in good faith
by appropriate proceedings promptly instituted and diligently pursued; (c)
appropriate reserves have been established in accordance with GAAP; (d)
non-payment could not have a Material Adverse Effect, nor result in forfeiture
or sale of any material portion of the assets of the Obligor valued greater than
$5,000,000 in the aggregate; (e) no Lien is imposed on assets of the Obligor,
unless bonded and stayed to the satisfaction of Agent; and (f) if the obligation
results from entry of a judgment or other order, such judgment or order is
stayed pending appeal or other judicial review.
 
Property: any interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible.
 
 
 
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Protective Advances: as defined in Section 2.1.6.
 
Purchase Money Debt: (a) Debt (other than the Obligations) for payment of any of
the purchase price of fixed assets; (b) Debt (other than the Obligations)
incurred within 10 days before or after acquisition of any fixed assets, for the
purpose of financing any of the purchase price thereof; and (c) any renewals,
extensions or refinancings (but not increases) thereof.
 
Purchase Money Lien: a Lien that secures Purchase Money Debt, encumbering only
the fixed assets acquired with such Debt and constituting a Capital Lease or a
purchase money security interest under the UCC.
 
RCRA: the Resource Conservation and Recovery Act (42 U.S.C. §§ 6991-6991i).
 
Real Estate: all right, title and interest (whether as owner, lessor or lessee)
in any real Property and any buildings, structures, parking areas or other
improvements thereon.
 
Related Real Estate Documents: with respect to any Real Estate subject to a
Mortgage, the following, in form and substance satisfactory to Agent and
received by Agent for review at least 15 days prior to the effective date of the
Mortgage:  (a) a mortgagee title policy (or binder therefor) covering Agent’s
interest under the Mortgage, in a form and amount and by an insurer acceptable
to Agent, which must be fully paid on such effective date; (b) such assignments
of leases, estoppel letters, attornment agreements, consents, waivers and
releases as Agent may require with respect to other Persons having an interest
in the Real Estate; (c) a current, as-built survey of the Real Estate,
containing a metes-and-bounds property description and flood plain
certification, and certified by a licensed surveyor acceptable to Agent; (d)
flood insurance in an amount, with endorsements and by an insurer acceptable to
Agent, if the Real Estate is within a flood plain; (e) a current appraisal of
the Real Estate, prepared by an appraiser acceptable to Agent, and in form and
substance satisfactory to Required Lenders; (f) an environmental assessment,
prepared by environmental engineers acceptable to Agent, and accompanied by such
reports, certificates, studies or data as Agent may reasonably require, which
shall all be in form and substance satisfactory to Required Lenders; and (g) an
Environmental Agreement and such other documents, instruments or agreements as
Agent may reasonably require with respect to any environmental risks regarding
the Real Estate.
 
Refinancing Conditions: the following conditions for Refinancing Debt:  (a) it
is in an aggregate principal amount that does not exceed the principal amount of
the Debt being extended, renewed or refinanced unless the excess is used to
repay the outstanding Revolver Loans and at the election of Agent or Required
Lenders the Revolver Commitments are reduced by the amount of the repayment (and
if no Revolver Loans are outstanding, at the election of Agent or Required
Lenders, the Revolver Commitments are reduced by the excess); (b) it has a final
maturity no sooner than, a weighted average life no less than, and an interest
rate no greater than, the Debt being extended, renewed or refinanced; (c) it is
subordinated to the Obligations at least to the same extent as the Debt being
extended, renewed or refinanced; (d) the representations, covenants and defaults
applicable to it are no less favorable to Borrowers than those applicable to the
Debt being extended, renewed or refinanced; (e) no additional Lien is granted to
secure it; (f) no additional Person is obligated on such Debt; (g) with respect
to Refinancing Debt related to the Term Loan, it is subject to an intercreditor
agreement in form and substance reasonably satisfactory to Agent and Required
Lenders; and (h) upon giving effect to it, no Default or Event of Default
exists.
 
 
 
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Refinancing Debt: Borrowed Money that is the result of an extension, renewal or
refinancing of Debt permitted under Section 10.2.1(b), (d), (f) or (j).
 
Reimbursement Date: as defined in Section 2.3.2.
 
Rent and Charges Reserve: the aggregate of (a) all past due rent and other
amounts owing by an Obligor to any landlord, warehouseman, processor, repairman,
mechanic, shipper, freight forwarder, broker or other Person who possesses any
Collateral or could assert a Lien on any Collateral; and (b) a reserve at least
equal to three months rent and other charges that could be payable to any such
Person (if any), unless it has executed a Lien Waiver.
 
Report: as defined in Section 12.2.3.
 
Reportable Event: any of the events set forth in Section 4043(c) of ERISA, other
than events for which the 30-day notice period has been waived.
 
Required Lenders: Lenders (subject to Section 4.2) having (a) Revolver
Commitments in excess of 66⅔% of the aggregate Revolver Commitments; and (b) if
the Revolver Commitments have terminated, Revolver Loans in excess of 66⅔% of
all outstanding Revolver Loans.
 
Requirement of Law: as to any Person, any law (statutory or common), treaty,
rule or regulation or determination of an arbitrator or of a Governmental
Authority, in each case applicable to or binding upon the Person or any of its
property or to which the Person or any of its property is subject.
 
Reserve Percentage: the reserve percentage (expressed as a decimal, rounded up
to the nearest 1/100th of 1%) applicable to member banks under regulations
issued from time to time by the Board of Governors for determining the maximum
reserve requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently referred to
as “Eurocurrency liabilities”).
 
Restricted Investment: any Investment by a Borrower or any of its Subsidiaries,
other than (a) Investments in its Subsidiaries to the extent existing on the
Closing Date; (b) Cash Equivalents that are subject to Agent’s Lien and control,
pursuant to documentation in form and substance satisfactory to Agent; (c) loans
and advances permitted under Section 10.2.7;  (d) CCI Originator Notes and CCCI
Originator Notes; (e) Permitted ABS Originator Notes; (f) Investments by CAI
which are consistent with the corporate investment policy of CAI from time to
time in effect, as approved by Agent (such approval not to be unreasonably
withheld); (g) Investments in and by a Securitization Subsidiary permitted under
the Permitted ABS Facility; and (h) assignment of assets under the Intercompany
Assignment Agreement.
 
Restrictive Agreement: an agreement (other than a Loan Document or a Term Loan
Document) that conditions or restricts the right of any Borrower, its Subsidiary
or other Obligor to incur or repay Borrowed Money, to grant Liens on any assets,
to declare or make Distributions, to modify, extend or renew any agreement
evidencing Borrowed Money, or to repay any intercompany Debt.
 
 
 
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Revolver Commitment: for any Lender, its obligation to make Revolver Loans and
to participate in LC Obligations up to the maximum principal amount shown on
Schedule 1.1, or as hereafter determined pursuant to each Assignment and
Acceptance to which it is a party.  “Revolver Commitments” means the aggregate
amount of such commitments of all Lenders.
 
Revolver Commitment Termination Date: the earliest to occur of (a) the Revolver
Termination Date; (b) the date on which Borrowers terminate the Revolver
Commitments pursuant to Section 2.1.4; or (c) the date on which the Revolver
Commitments are terminated pursuant to Section 11.2.
 
Revolver Loan: a loan made pursuant to Section 2.1, and any Swingline Loan,
Overadvance Loan or Protective Advance.
 
Revolver Note: a promissory note to be executed by Borrowers in favor of a
Lender in the form of Exhibit A, which shall be in the amount of such Lender’s
Revolver Commitment and shall evidence the Revolver Loans made by such Lender.
 
Revolver Termination Date:  November 30, 2013.
 
Royalties: all royalties, fees, expense reimbursement and other amounts payable
by a Borrower under a License.
 
S&P: Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., and its successors.
 
Sales Tax Reserve:  a reserve equal to 100% of the aggregate sales tax
obligations of Borrowers as set forth in Borrowers’ books and records as of any
measurement date which have not been prepaid by Borrowers.
 
Secured Bank Product Obligations: Bank Product Debt owing to a Secured Bank
Product Provider, up to the maximum amount (in the case of any Secured Bank
Product Provider other than Bank of America and its Affiliates) specified by
such provider in writing to Agent, which amount may be established or increased
(by further written notice to Agent from time to time) as long as no Default or
Event of Default exists and establishment of a Bank Product Reserve for such
amount and all other Secured Bank Product Obligations would not result in an
Overadvance.
 
Secured Bank Product Provider: (a) Bank of America or any of its Affiliates; and
(b) any Lender or Affiliate of a Lender that is providing a Bank Product,
provided the provider delivers written notice to Agent, in form and substance
satisfactory to Agent, by the later of the Closing Date or 10 Business Days
following creation of the Bank Product, (i) describing the Bank Product and
setting forth the maximum amount to be secured by the Collateral and the
methodology to be used in calculating such amount, and (ii) agreeing to be bound
by Section 12.14.
 
Secured Parties: Agent, Issuing Bank, Lenders and Secured Bank Product
Providers.
 
Security Agreement:  a security agreement, in form and substance satisfactory to
Agent, executed by each Guarantor pursuant to which Guarantor shall grant to
Agent a Lien (for the benefit of the Lenders) in all of such Guarantor’s assets.
 
 
 
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Security Documents: the Guaranties, each Security Agreement, each Leasehold
Mortgage, each Leasehold Mortgage Consent, each Mortgage, Deposit Account
Control Agreements, Credit Card Processor Notification, Equity Interest Pledge
Agreement, and all other documents, instruments and agreements now or hereafter
securing (or given with the intent to secure) any Obligations.
 
Securitized Contracts: the Contracts and related security which have been
allocated to the Securitization Subsidiary under the Contract Allocation
Agreement and sold by a Borrower to a Securitization Subsidiary pursuant to the
Permitted ABS Purchase Agreement.
 
Securitization Subsidiary: one or more direct or indirect Subsidiaries of Parent
formed for the purposes of entering into a Permitted ABS Facility.
 
Senior Officer: the chairman of the board, president, chief executive officer or
chief financial officer of a Borrower or, if the context requires, an Obligor.
 
Service Maintenance Program Reserve: as of any measurement date, a reserve equal
to the aggregate in-house service maintenance costs incurred by Borrowers for
the previous 12-month period.
 
Settlement Report: a report delivered by Agent to Lenders summarizing the
Revolver Loans and participations in LC Obligations outstanding as of a given
settlement date, allocated to Lenders on a Pro Rata basis in accordance with
their Revolver Commitments.
 
Solvent: as to any Person, such Person (a) owns Property whose fair salable
value is greater than the amount required to pay all of its debts (including
contingent, subordinated, unmatured and unliquidated liabilities); (b) owns
Property whose present fair salable value (as defined below) is greater than the
probable total liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of such Person as they become absolute and matured;
(c) is able to pay all of its debts as they mature; (d) has capital that is not
unreasonably small for its business and is sufficient to carry on its business
and transactions and all business and transactions in which it is about to
engage; (e) is not “insolvent” within the meaning of Section 101(32) of the
Bankruptcy Code; and (f) has not incurred (by way of assumption or otherwise)
any obligations or liabilities (contingent or otherwise) under any Loan
Documents, or made any conveyance in connection therewith, with actual intent to
hinder, delay or defraud either present or future creditors of such Person or
any of its Affiliates.  “Fair salable value” means the amount that could be
obtained for assets within a reasonable time, either through collection or
through sale under ordinary selling conditions by a capable and diligent seller
to an interested buyer who is willing (but under no compulsion) to purchase.
 
Subordinated Debt: Debt incurred by a Borrower that is expressly subordinate and
junior in right of payment to Full Payment of all Obligations, and is on terms
(including maturity, interest, fees, repayment, covenants and subordination)
reasonably satisfactory to Agent.
 
Subsidiary: any entity at least 50% of whose voting securities or Equity
Interests is owned by a Person (including indirect ownership by such Person
through other entities in which the Person directly or indirectly owns 50% of
the voting securities or Equity Interests).
 
Substitute Lender: as defined in Section 3.8.2(a).
 
 
 
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Supermajority Lenders: Lenders (subject to Section 4.2) having (a) Revolver
Commitments in excess of 90% of the aggregate Revolver Commitments; and (b) if
the Revolver Commitments have been terminated, Revolver Loans in excess of 90%
of all outstanding Revolver Loans.
 
Swingline Loan: any Borrowing of Base Rate Revolver Loans funded with Agent’s
funds, until such Borrowing is settled among Lenders or repaid by Borrowers.
 
Tangible Net Worth: at any date means an amount equal to: (i) the net book value
(after deducting related depreciation, obsolescence, amortization, valuation and
other proper reserves) at which the Adjusted Tangible Assets of a Person would
be shown on a balance sheet at such date in accordance with GAAP, less (ii) the
amount at which such Person’s liabilities would be shown on such balance sheet
in accordance with GAAP, and including as liabilities all reserves for
contingencies and other potential liabilities.
 
Taxes: all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.
 
Term Agent: GA Capital, LLC.
 
Term Loan: as defined in the Term Loan Agreement.
 
Term Loan Agreement: the Term Loan and Security Agreement dated as of November
30, 2010 between Parent and Borrowers, on the one hand, and Term Agent and the
Term Lenders party thereto, on the other hand.
 
Term Loan Borrowing Base: has the meaning given in the Term Loan Agreement.
 
Term Loan Borrowing Base Reserve: an amount equal to the result, if a positive
number, of (x) the outstanding amount of the Term Loan, minus (y) the amount by
which the Term Loan Borrowing Base exceeds the Borrowing Base (without giving
effect to the Term Loan Borrowing Base Reserve).
 
Term Loan Documents: the Term Loan Agreement and each other document related to
or evidencing the Term Loan Facility including the Loan Documents, as defined in
the Term Loan Agreement.
 
Term Loan Facility: the senior secured term loan facility pursuant to the Term
Loan Agreement and other Term Loan Documents.
 
Transferee: any actual or potential Eligible Assignee, Participant or other
Person acquiring an interest in any Obligations.
 
Type: any type of a Revolver Loan (i.e., Base Rate Revolver Loan or LIBOR
Revolver Loan) that has the same interest option and, in the case of LIBOR
Revolver Loans, the same Interest Period.
 
UCC: the Uniform Commercial Code as in effect in the State of California or,
when the laws of any other jurisdiction govern the perfection or enforcement of
any Lien, the Uniform Commercial Code of such jurisdiction.
 
 
 
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Unfunded Pension Liability: the excess of a Pension Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Pension
Plan’s assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.
 
Unused Line Fee Percentage: a percentage equal to (i) 0.75% per annum if the
average daily balance of Revolver Loans and stated amount of Letters of Credit
during the immediately preceeding quarter is less than 50% of the Revolver
Commitments, and (b) 0.50% per annum if the average daily balance of Revolver
Loans and stated amount of Letters of Credit during the immediately preceeding
quarter is equal to or greater than 50% of the Revolver Commitments.
 
Upstream Payment: a Distribution by a Subsidiary of a Borrower to such Borrower.
 
Value: (a) for Inventory, its value determined on the basis of the lower of cost
or market, calculated on a moving weighted average cost basis, and excluding any
portion of cost attributable to intercompany profit among Borrowers and their
Affiliates; and (b) for a Credit Card Account, its face amount, reduced by, to
the extent not reflected in such face amount, (i) the amount of all accrued and
actual discounts, claims, credits or credits pending, promotional program
allowances, price adjustments, finance charges or other allowances (including
any amount that a Borrower may be obligated to rebate to a customer, a Credit
Card Processor, or Credit Card Issuer pursuant to the terms of any Credit Card
Agreement or understanding (written or oral)), (ii) the aggregate amount of all
cash received in respect of such Credit Card Account but not yet applied by a
Borrower to reduce the amount of such Credit Card Account, and (iii) the amount
of all accrued and unpaid fees owed to Credit Card Processors or Credit Card
Issuers.
 
1.2           Accounting Terms.  Under the Loan Documents (except as otherwise
specified herein), all accounting terms shall be interpreted, all accounting
determinations shall be made, and all financial statements shall be prepared, in
accordance with GAAP applied on a basis consistent with the most recent audited
financial statements of Borrowers delivered to Agent before the Closing Date and
using the same inventory valuation method as used in such financial statements,
except for any change required or permitted by GAAP if Borrowers’ certified
public accountants concur in such change, the change is disclosed to Agent, and
Section 10.3 is amended in a manner satisfactory to Required Lenders to take
into account the effects of the change.
 
1.3           Uniform Commercial Code.  As used herein, the following terms are
defined in accordance with the UCC in effect in the State of California from
time to time:  “Chattel Paper”, “Commercial Tort Claim”, “Deposit Account”,
“Document”, “Equipment”, “General Intangibles”, “Goods”, “Instrument”,
“Investment Property”, “Letter-of-Credit Right” and “Supporting Obligation”.
 
1.4           Certain Matters of Construction.  The terms “herein”, “hereof”,
“hereunder” and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision.  Any pronoun used
shall be deemed to cover all genders.  In the computation of periods of time
from a specified date to a later specified date, “from” means “from and
including”, and “to” and “until” each mean “to but excluding”.  The terms
“including” and “include” shall mean “including, without limitation” and, for
purposes of each Loan Document, the parties agree that the rule of ejusdem
generis shall not be applicable to limit any provision.  Section titles appear
as a matter of convenience only and shall not affect the interpretation of any
Loan Document.  All references to (a) laws or statutes include all related
rules, regulations, interpretations, amendments and successor provisions;
 
 
 
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(b) any document, instrument or agreement includes any amendments, waivers and
other modifications, extensions or renewals (to the extent permitted by the Loan
Documents); (c) any section means, unless the context otherwise requires, a
section of this Agreement; (d) any exhibits or schedules mean, unless the
context otherwise requires, exhibits and schedules attached hereto, which are
hereby incorporated by reference; (e) any Person includes successors and
assigns; (f) time of day means time of day in the Pacific Time Zone; or (g)
except as otherwise set forth herein, discretion of Agent, Issuing Bank or any
Lender means the reasonable discretion of such Person.  All calculations of
Value, fundings of Revolver Loans, issuances of Letters of Credit and payments
of Obligations shall be in Dollars and, unless the context otherwise requires,
all determinations (including calculations of Borrowing Base and financial
covenants) made from time to time under the Loan Documents shall be made in
light of the circumstances existing at such time.  Borrowing Base calculations
shall be consistent with historical methods of valuation and calculation, and
otherwise satisfactory to Agent (and not necessarily calculated in accordance
with GAAP).  Borrowers shall have the burden of establishing any alleged
negligence, misconduct or lack of good faith by Agent, Issuing Bank or any
Lender under any Loan Documents.  No provision of any Loan Documents shall be
construed against any party by reason of such party having, or being deemed to
have, drafted the provision.  Whenever the phrase “to the best of Borrowers’
knowledge” or words of similar import are used in any Loan Documents, it means
actual knowledge of a Senior Officer, or knowledge that a Senior Officer would
have obtained if he or she had engaged in good faith and diligent performance of
his or her duties, including reasonably specific inquiries of employees or
agents and a good faith attempt to ascertain the matter to which such phrase
relates.
 
SECTION 2.     CREDIT FACILITIES
 
2.1           Revolver Commitment.
 
2.1.1           Revolver Loans.  Each Lender agrees, severally on a Pro Rata
basis up to its Revolver Commitment, on the terms set forth herein, to make
Revolver Loans to Borrowers from time to time through the Revolver Commitment
Termination Date.  The Revolver Loans may be repaid and reborrowed as provided
herein.  In no event shall Lenders have any obligation to honor a request for a
Revolver Loan (x) by CAI if the unpaid balance of Revolver Loans made to CAI
outstanding at such time (including the requested Revolver Loan) would exceed
the CAI Borrowing Base, (y) by CCI or CCCI if the unpaid balance of Revolver
Loans made to CCI and CCCI outstanding at such time (including the requested
Revolver Loan) would exceed the CCI Borrowing Base, or (z) by any Borrower if
the unpaid balance of Revolver Loans outstanding at such time (including the
requested Revolver Loan) would exceed the Adjusted Borrowing Base.
 
2.1.2           Revolver Notes.  The Revolver Loans made by each Lender and
interest accruing thereon shall be evidenced by the records of Agent and such
Lender.  At the request of any Lender, Borrowers shall deliver a Revolver Note
to such Lender.
 
2.1.3           Use of Proceeds.  The proceeds of Revolver Loans shall be used
by Borrowers solely (a) to satisfy all obligations under the Existing
Securitization Facility; (b) to pay fees and transaction expenses associated
with the closing of this credit facility; (c) to pay Obligations in accordance
with this Agreement; and (d) for working capital and other lawful corporate
purposes of Borrowers.
 
 
 
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2.1.4           Voluntary Reduction or Termination of Revolver Commitments.
 
(a)           The Revolver Commitments shall terminate on the Revolver
Termination Date, unless sooner terminated in accordance with this
Agreement.  Upon at least 30 days prior written notice to Agent, Borrowers may,
at their option, terminate the Revolver Commitments and this Agreement.  Any
notice of termination given by Borrowers shall be irrevocable.  On the
termination date, Borrowers shall make Full Payment of all Obligations.
 
(b)           Borrowers may permanently reduce the Revolver Commitments, on a
Pro Rata basis for each Lender, upon at least 30 days prior written notice to
Agent, which notice shall specify the amount of the reduction and shall be
irrevocable once given; provided, that Borrowers may not permanently reduce the
Revolver Commitments to an amount less than $125,000,000.  Each reduction shall
be in a minimum amount of $10,000,000, or an increment of $1,000,000 in excess
thereof.
 
(c)           Concurrently with any reduction in or termination of the Revolver
Commitments, for whatever reason (including an Event of Default), Borrowers
shall pay to Agent, for the Pro Rata benefit of Lenders and as liquidated
damages for loss of bargain (and not as a penalty), an amount equal to (i) if
the reduction or termination occurs during the first Loan Year, 0.50% of the
Revolver Commitments being reduced or terminated; and (ii) if it occurs
thereafter, 0.25% of the Revolver Commitments being reduced or terminated.  No
termination charge shall be payable if termination occurs on the Revolver
Termination Date or in connection with a refinancing of this credit facility by
Bank of America or any of its Affiliates.
 
2.1.5           Overadvances.  If the aggregate Revolver Loans made to CAI
exceed the CAI Borrowing Base or the aggregate Revolver Loans made to CCI and
CCCI exceed the CCI Borrowing Base, (in each case, an “Overadvance”) or the
aggregate Revolver Loans made to all Borrowers exceed the lesser of the
aggregate Revolver Commitments and the Adjusted Borrowing Base at any time, the
excess amount shall be payable by Borrowers immediately, but all such Revolver
Loans shall nevertheless constitute Obligations secured by the Collateral and
entitled to all benefits of the Loan Documents.  Unless its authority has been
revoked in writing by Required Lenders, Agent may require Lenders to honor
requests for Overadvance Loans and to forbear from requiring Borrowers to cure
an Overadvance, (a) when no other Event of Default is known to Agent, as long as
(i) the Overadvance does not continue for more than 30 consecutive days (and no
Overadvance may exist for at least five consecutive days thereafter before
further Overadvance Loans are required), and (ii) the Overadvance is not known
by Agent to exceed $10,000,000 in the aggregate; and (b) regardless of whether
an Event of Default exists, if Agent discovers an Overadvance not previously
known by it to exist, as long as from the date of such discovery the Overadvance
(i) is not increased by more than $500,000, and (ii) does not continue for more
than 30 consecutive days.  In no event shall Overadvance Loans be made that
would cause the outstanding Revolver Loans and LC Obligations to exceed the
aggregate Revolver Commitments.  Any funding of an Overadvance Loan or
sufferance of an Overadvance shall not constitute a waiver by Agent or Lenders
of the Event of Default caused thereby.  In no event shall any Borrower or other
Obligor be deemed a beneficiary of this Section nor authorized to enforce any of
its terms.
 
2.1.6           Protective Advances.  Agent shall be authorized, in its sole
discretion, at any time that any conditions in Section 6 are not satisfied, to
make Base Rate Revolver Loans (a) up to an aggregate amount not to exceed at any
time the lesser of (i) the aggregate Revolver Commitments, and (ii) the
outstanding amount of $5,000,000, if Agent deems such Revolver Loans necessary
or desirable to preserve or protect Collateral, or to enhance the
 
 
 
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collectability or repayment of Obligations; or (b) to pay any other amounts
chargeable to Obligors under any Loan Documents, including costs, fees and
expenses (such Revolver Loans are referred to herein as “Protective
Advances”).  Each Lender shall participate in each Protective Advance on a Pro
Rata basis.  Required Lenders may at any time revoke Agent’s authority to make
further Protective Advances by written notice to Agent.  Absent such revocation,
Agent’s determination that funding of a Protective Advance is appropriate shall
be conclusive.
 
2.2           Increase in Revolver Commitments.
 
(a)           Subject to the terms and conditions hereof, at any time after the
Closing Date and up to the Revolver Commitment Termination Date, provided that
no Default or Event of Default has occurred and is continuing, Borrowers may
request that the Lenders increase the Revolver Commitments up to an aggregate
amount of $500,000,000 (each such commitment increase, a “Revolver Commitment
Increase”) by notifying Agent and each Lender of the amount of the proposed
Revolver Commitment Increase.  Notwithstanding anything in this Agreement to the
contrary, no Revolver Commitment Increase shall require the approval of any
Lender other than any Lender (if any) providing all or part of the Revolver
Commitment Increase, no Lender shall be required to provide all or part of any
Revolver Commitment Increase unless it agrees to do so in its sole discretion,
and no Revolver Commitment Increase shall be in an amount less than $10,000,000.
 
(b)           Any Revolver Commitment Increase shall be offered by Borrowers to
the Lenders on a Pro Rata basis on the date that the Revolver Commitment
Increase is requested.  The Lenders shall have 15 Business Days to respond to
any request for a Revolver Commitment Increase (by notice to Borrowers and
Agent) and may elect to accept all, a portion or none of their respective Pro
Rata shares of the proposed Revolver Commitment Increase.  Any Lender which
fails to respond to a request for a Revolver Commitment Increase by the end of
such 15 Business Day period will be deemed to have declined the request for its
Pro Rata share of the requested Revolver Commitment Increase.  If any portion of
a requested Revolver Commitment Increase is not provided by the Lenders, then
Borrowers may request that the other Lenders (without regard to their Pro Rata
percentage) or one or more Eligible Assignees provide such Revolver Commitment
Increase.  In any such case, each Person providing a portion of the requested
Revolver Commitment Increase shall execute and deliver to Agent and Borrowers
all such documentation as may be reasonably required by Agent to evidence such
Revolver Commitment Increase.
 
(c)           If any requested Revolver Commitment Increase is agreed to in
accordance with this Section 2.2, Agent and Borrowers shall determine the
effective date of such Revolver Commitment Increase (the “Commitment Increase
Effective Date”).  Agent, with the consent and approval of Borrowers, shall
promptly confirm in writing to the Lenders the final allocation of such Revolver
Commitment Increase and the Commitment Increase Effective Date.  On the
Commitment Increase Effective Date:  (i) the Pro Rata shares of the Lenders
shall be amended to reflect the reallocated Revolver Commitments; (ii) each
Person added as a new Lender pursuant to a Revolver Commitment Increase (a “New
Lender”) shall become a Lender hereunder and under the other Loan Documents with
a Revolver Commitment as set forth on the Assignment and Acceptance executed by
such Lender; (iii) the Revolver Commitment of each existing Lender that
increases its Revolver Commitment pursuant to a Revolver Commitment Increase (an
“Increasing Lender”) shall be increased as reflected on such Assignment and
Acceptance; (iv) Borrowers shall pay (which may be funded with Revolver Loans
made under the Revolver Commitment Increase) the principal amount of, and
accrued and unpaid interest on, Revolver Loans of the Lenders other than the New
Lenders in an
 
 
 
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amount sufficient (as determined by Agent) to permit the New Lenders and the
Increasing Lenders to fund Revolver Loans in an amount equal to the New Lenders’
and the Increasing Lenders’ respective Pro Rata shares of the then outstanding
Revolver Loans, and in connection with such payment shall also pay funding
losses, if any, on such repayment in accordance with Section 3.9; (v) each New
Lender shall fund Revolver Loans in an amount equal to its Pro Rata share of the
then outstanding Revolver Loans; and (vi) each Increasing Lender shall fund
Revolver Loans in an amount necessary such that, after giving effect to such
funding, it shall have funded its Pro Rata share of the entire amount of the
then outstanding Revolver Loans.  Any New Lender shall be required to have a
Revolver Commitment of not less than $10,000,000.
 
(d)           As a condition precedent to the effectiveness of any such Revolver
Commitment Increase, Borrowers shall deliver to Agent a certificate signed by a
Senior Officer, dated as of the Commitment Increase Effective Date, that as of
the Commitment Increase Effective Date no Default or Event of Default has
occurred and is continuing.
 
(e)           In no event shall the Revolver Commitments exceed $500,000,000
without the consent of each Lender.
 
2.3           Letter of Credit Facility.
 
2.3.1           Issuance of Letters of Credit.  Issuing Bank agrees to issue
Letters of Credit from time to time until 30 days prior to the Revolver
Termination Date (or until the Revolver Commitment Termination Date, if
earlier), on the terms set forth herein, including the following:
 
(a)           Each Borrower acknowledges that Issuing Bank’s willingness to
issue any Letter of Credit is conditioned upon Issuing Bank’s receipt of a LC
Application with respect to the requested Letter of Credit, as well as such
other instruments and agreements as Issuing Bank may customarily require for
issuance of a letter of credit of similar type and amount.  Issuing Bank shall
have no obligation to issue any Letter of Credit unless (i) Issuing Bank
receives a LC Request and LC Application at least three Business Days prior to
the requested date of issuance; (ii) each LC Condition is satisfied; and (iii)
if a Defaulting Lender exists, such Lender or Borrowers have entered into
arrangements satisfactory to Agent and Issuing Bank to eliminate any funding
risk associated with the Defaulting Lender.  If, in sufficient time to act,
Issuing Bank receives written notice from a Lender that any LC Condition has not
been satisfied, Issuing Bank shall have no obligation to issue the requested
Letter of Credit (or any other) until such notice is withdrawn in writing by the
Required Lenders or until Required Lenders have waived such condition in
accordance with this Agreement.  Prior to receipt of any such notice, Issuing
Bank shall not be deemed to have knowledge of any failure of LC Conditions.
 
(b)           Letters of Credit may be requested by a Borrower only (i) to
support obligations of such Borrower incurred in the Ordinary Course of
Business; or (ii) for other purposes as Agent and Lenders may approve from time
to time in writing.  The renewal or extension of any Letter of Credit shall be
treated as the issuance of a new Letter of Credit, except that delivery of a new
LC Application shall be required at the discretion of Issuing Bank.
 
 
 
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(c)           Borrowers assume all risks of the acts, omissions or misuses of
any Letter of Credit by the beneficiary.  In connection with issuance of any
Letter of Credit, none of Agent, Issuing Bank or any Lender shall be responsible
for the existence, character, quality, quantity, condition, packing, value or
delivery of any goods purported to be represented by any Documents; any
differences or variation in the character, quality, quantity, condition,
packing, value or delivery of any goods from that expressed in any Documents;
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
Documents or of any endorsements thereon; the time, place, manner or order in
which shipment of goods is made; partial or incomplete shipment of, or failure
to ship, any goods referred to in a Letter of Credit or Documents; any deviation
from instructions, delay, default or fraud by any shipper or other Person in
connection with any goods, shipment or delivery; any breach of contract between
a shipper or vendor and a Borrower; errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable, telegraph, telex,
telecopy, e-mail, telephone or otherwise; errors in interpretation of technical
terms; the misapplication by a beneficiary of any Letter of Credit or the
proceeds thereof; or any consequences arising from causes beyond the control of
Issuing Bank, Agent or any Lender, including any act or omission of a
Governmental Authority.  The rights and remedies of Issuing Bank under the Loan
Documents shall be cumulative.  Issuing Bank shall be fully subrogated to the
rights and remedies of each beneficiary whose claims against Borrowers are
discharged with proceeds of any Letter of Credit.
 
(d)           In connection with its administration of and enforcement of rights
or remedies under any Letters of Credit or LC Documents, Issuing Bank shall be
entitled to act, and shall be fully protected in acting, upon any certification,
documentation or communication in whatever form believed by Issuing Bank, in
good faith, to be genuine and correct and to have been signed, sent or made by a
proper Person.  Issuing Bank may consult with and employ legal counsel,
accountants and other experts to advise it concerning its obligations, rights
and remedies, and shall be entitled to act upon, and shall be fully protected in
any action taken in good faith reliance upon, any advice given by such
experts.  Issuing Bank may employ agents and attorneys-in-fact in connection
with any matter relating to Letters of Credit or LC Documents, and shall not be
liable for the negligence or misconduct of agents and attorneys-in-fact selected
with reasonable care.
 
(e)           All Existing Letters of Credit shall be deemed to have been issued
pursuant to this Agreement, and from and after the Closing Date shall be subject
to and governed by the terms and conditions set forth herein.
 
2.3.2           Reimbursement; Participations.
 
(a)           If Issuing Bank honors any request for payment under a Letter of
Credit, Borrowers shall pay to Issuing Bank, on the same day (“Reimbursement
Date”), the amount paid by Issuing Bank under such Letter of Credit, together
with interest at the interest rate for Base Rate Revolver Loans from the
Reimbursement Date until payment by Borrowers.  The obligation of Borrowers to
reimburse Issuing Bank for any payment made under a Letter of Credit shall be
absolute, unconditional, irrevocable, and joint and several, and shall be paid
without regard to any lack of validity or enforceability of any Letter of Credit
or the existence of any claim, setoff, defense or other right that Borrowers may
have at any time against the beneficiary.  Whether or not Borrower Agent submits
a Notice of Borrowing, Borrowers shall be deemed to have requested a Borrowing
of Base Rate Revolver Loans in an amount necessary to pay all amounts due
Issuing Bank on any Reimbursement Date and each Lender agrees to fund its Pro
Rata share of such Borrowing whether or not the Revolver Commitments have
terminated, an Overadvance exists or is created thereby, or the conditions in
Section 6 are satisfied.
 
 
 
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(b)           Upon issuance of a Letter of Credit, each Lender shall be deemed
to have irrevocably and unconditionally purchased from Issuing Bank, without
recourse or warranty, an undivided Pro Rata interest and participation in all LC
Obligations relating to the Letter of Credit.  If Issuing Bank makes any payment
under a Letter of Credit and Borrowers do not reimburse such payment on the
Reimbursement Date, Agent shall promptly notify Lenders and each Lender shall
promptly (within one Business Day) and unconditionally pay to Agent, for the
benefit of Issuing Bank, the Lender’s Pro Rata share of such payment.  Upon
request by a Lender, Issuing Bank shall furnish copies of any Letters of Credit
and LC Documents in its possession at such time.
 
(c)           The obligation of each Lender to make payments to Agent for the
account of Issuing Bank in connection with Issuing Bank’s payment under a Letter
of Credit shall be absolute, unconditional and irrevocable, not subject to any
counterclaim, setoff, qualification or exception whatsoever, and shall be made
in accordance with this Agreement under all circumstances, irrespective of any
lack of validity or unenforceability of any Loan Documents; any draft,
certificate or other document presented under a Letter of Credit having been
determined to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect; or the
existence of any setoff or defense that any Obligor may have with respect to any
Obligations.  Issuing Bank does not assume any responsibility for any failure or
delay in performance or any breach by any Borrower or other Person of any
obligations under any LC Documents.  Issuing Bank does not make to Lenders any
express or implied warranty, representation or guaranty with respect to the
Collateral, LC Documents or any Obligor.  Issuing Bank shall not be responsible
to any Lender for any recitals, statements, information, representations or
warranties contained in, or for the execution, validity, genuineness,
effectiveness or enforceability of any LC Documents; the validity, genuineness,
enforceability, collectability, value or sufficiency of any Collateral or the
perfection of any Lien therein; or the assets, liabilities, financial condition,
results of operations, business, creditworthiness or legal status of any
Obligor.
 
(d)           No Issuing Bank Indemnitee shall be liable to any Lender or other
Person for any action taken or omitted to be taken in connection with any LC
Documents except as a result of its actual gross negligence or willful
misconduct.  Issuing Bank shall not have any liability to any Lender if Issuing
Bank refrains from any action under any Letter of Credit or LC Documents until
it receives written instructions from Required Lenders.
 
2.3.3           Cash Collateral.  If any LC Obligations, whether or not then due
or payable, shall for any reason be outstanding at any time (a) that an Event of
Default exists, (b) that Borrowing Availability is less than zero, (c) after the
Revolver Commitment Termination Date, or (d) within 20 Business Days prior to
the Revolver Termination Date, then Borrowers shall, at Issuing Bank’s or
Agent’s request, Cash Collateralize the stated amount of all outstanding Letters
of Credit and pay to Issuing Bank the amount of all other LC
Obligations.  Borrowers shall, on demand by Issuing Bank or Agent from time to
time, Cash Collateralize the LC Obligations of any Defaulting Lender.  If
Borrowers fail to provide any Cash Collateral as required hereunder, Lenders may
(and shall upon direction of Agent) advance, as Revolver Loans, the amount of
the Cash Collateral required (whether or not the Revolver Commitments have
terminated, an Overadvance exists or the conditions in Section 6 are satisfied).
 
 
 
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2.3.4           Resignation of Issuing Bank.  Issuing Bank may resign at any
time upon notice to Agent and Borrowers.  On the effective date of such
resignation, Issuing Bank shall have no further obligation to issue, amend,
renew, extend or otherwise modify any Letter of Credit, but shall continue to
have the benefits of Sections 2.3, 12.6 and 14.2 with respect to any Letters of
Credit issued or other actions taken while Issuing Bank.  Agent shall promptly
appoint a replacement Issuing Bank and, as long as no Default or Event of
Default exists, such replacement shall be reasonably acceptable to Borrowers.
 
SECTION 3.     INTEREST, FEES AND CHARGES
 
3.1           Interest.
 
3.1.1           Rates and Payment of Interest.
 
(a)           The Obligations shall bear interest (i) if a Base Rate Revolver
Loan, at the Base Rate in effect from time to time, plus the Applicable Margin;
(ii) if a LIBOR Revolver Loan, at LIBOR for the applicable Interest Period, plus
the Applicable Margin; and (iii) if any other Obligation (including, to the
extent permitted by law, interest not paid when due), at the Base Rate in effect
from time to time, plus the Applicable Margin for Base Rate Revolver
Loans.  Interest shall accrue from the date the Revolver Loan is advanced or the
Obligation is incurred or payable, until paid by Borrowers.  If a Revolver Loan
is repaid on the same day made, one day’s interest shall accrue.
 
(b)           During an Insolvency Proceeding with respect to any Borrower, or
during any other Event of Default if Agent or Required Lenders in their
discretion so elect, Obligations shall bear interest at the Default Rate
(whether before or after any judgment).  Each Borrower acknowledges that the
cost and expense to Agent and Lenders due to an Event of Default are difficult
to ascertain and that the Default Rate is a fair and reasonable estimate to
compensate Agent and Lenders for this.
 
(c)           Interest accrued on the Revolver Loans shall be due and payable in
arrears, (i) on the first day of each month; (ii) on any date of prepayment,
with respect to the principal amount of Revolver Loans being prepaid; and (iii)
on the Revolver Commitment Termination Date.  Interest accrued on any other
Obligations shall be due and payable as provided in the Loan Documents and, if
no payment date is specified, shall be due and payable on
demand.  Notwithstanding the foregoing, interest accrued at the Default Rate
shall be due and payable on demand.
 
3.1.2           Application of LIBOR to Outstanding Revolver Loans.
 
(a)           Borrowers may on any Business Day, subject to delivery of a Notice
of Conversion/Continuation, elect to convert any portion of the Base Rate
Revolver Loans to, or to continue any LIBOR Revolver Loan at the end of its
Interest Period as, a LIBOR Revolver Loan.  During any Default or Event of
Default, Agent may (and shall at the direction of Required Lenders) declare that
no Revolver Loan may be made, converted or continued as a LIBOR Revolver Loan.
 
(b)           Whenever Borrowers desire to convert or continue Revolver Loans as
LIBOR Revolver Loans, Borrower Agent shall give Agent a Notice of
Conversion/Continuation, no later than 11:00 a.m. at least three Business Days
before the requested conversion or continuation date.  Promptly after receiving
any such notice, Agent shall notify each Lender thereof.  Each Notice of
Conversion/Continuation shall be irrevocable, and shall specify the amount of
Revolver Loans to be converted or continued, the conversion or continuation date
(which shall be a Business Day), and the duration of the Interest Period (which
shall be deemed to be 30 days if not specified).  If, upon
 
 
 
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the expiration of any Interest Period in respect of any LIBOR Revolver Loans,
Borrowers shall have failed to deliver a Notice of Conversion/Continuation, they
shall be deemed to have elected to convert such Revolver Loans into Base Rate
Revolver Loans.
 
3.1.3           Interest Periods.  In connection with the making, conversion or
continuation of any LIBOR Revolver Loans, Borrowers shall select an interest
period (“Interest Period”) to apply, which interest period shall be one, two or
three months; provided, however, that:
 
(a)           the Interest Period shall commence on the date the Revolver Loan
is made or continued as, or converted into, a LIBOR Revolver Loan, and shall
expire on the numerically corresponding day in the calendar month at its end;
 
(b)           if any Interest Period commences on a day for which there is no
corresponding day in the calendar month at its end or if such corresponding day
falls after the last Business Day of such month, then the Interest Period shall
expire on the last Business Day of such month; and if any Interest Period would
expire on a day that is not a Business Day, the period shall expire on the next
Business Day; and
 
(c)           no Interest Period shall extend beyond the Revolver Termination
Date.
 
3.1.4           Interest Rate Not Ascertainable.  If Agent shall determine that
on any date for determining LIBOR, due to any circumstance affecting the London
interbank market, adequate and fair means do not exist for ascertaining such
rate on the basis provided herein, then Agent shall immediately notify Borrowers
of such determination.  Until Agent notifies Borrowers that such circumstance no
longer exists, the obligation of Lenders to make LIBOR Revolver Loans shall be
suspended, and no further Revolver Loans may be converted into or continued as
LIBOR Revolver Loans.
 
3.2           Fees.
 
3.2.1           Unused Line Fee.  Borrowers shall pay to Agent, for the Pro Rata
benefit of Lenders, a fee equal to the Unused Line Fee Percentage times the
amount by which the Revolver Commitments exceed the average daily balance of
Revolver Loans and stated amount of Letters of Credit during the immediately
preceding month.  Such fee shall be payable in arrears, on the first day of each
month and on the Revolver Commitment Termination Date.
 
3.2.2           LC Facility Fees.  Borrowers shall pay (a) to Agent, for the Pro
Rata benefit of Lenders, a fee equal to the Applicable Margin in effect for
LIBOR Revolver Loans times the average daily stated amount of Letters of Credit,
which fee shall be payable monthly in arrears, on the first day of each month;
(b) to Agent, for its own account, a fronting fee equal to 0.125% per annum on
the stated amount of each Letter of Credit, which fee shall be payable monthly
in arrears, on the first day of each month; and (c) to Issuing Bank, for its own
account, all customary charges associated with the issuance, amending,
negotiating, payment, processing, transfer and administration of Letters of
Credit, which charges shall be paid as and when incurred.  During an Event of
Default, the fee payable under clause (a) shall be increased by 2% per annum.
 
 
 
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3.2.3           Agent Fees.  In consideration of arrangement and syndication of
the Revolver Commitments and other services provided hereunder, Borrowers shall
pay to Agent the fees described in the Fee Letter.
 
3.3           Computation of Interest, Fees, Yield Protection.  All interest, as
well as fees and other charges calculated on a per annum basis, shall be
computed for the actual days elapsed, based on a year of 360 days.  Each
determination by Agent of any interest, fees or interest rate hereunder shall be
final, conclusive and binding for all purposes, absent manifest error.  All fees
shall be fully earned when due and shall not be subject to rebate, refund or
proration.  All fees payable under Section 3.2 are compensation for services and
are not, and shall not be deemed to be, interest or any other charge for the
use, forbearance or detention of money.  A certificate as to amounts payable by
Borrowers under Section 3.4, 3.6, 3.7, 3.9 or 5.9, submitted to Borrower Agent
by Agent or the affected Lender, as applicable, shall be final, conclusive and
binding for all purposes, absent manifest error, and Borrowers shall pay such
amounts to the appropriate party within 10 days following receipt of the
certificate.
 
3.4           Reimbursement Obligations.  Borrowers shall reimburse Agent and
Lenders for all Extraordinary Expenses.  Borrowers shall also reimburse Agent
for all legal, accounting, appraisal, consulting, and other reasonable fees,
costs and expenses incurred by it in connection with (a) negotiation and
preparation of any Loan Documents, including any amendment or other modification
thereof; (b) administration of and actions relating to any Collateral, Loan
Documents and transactions contemplated thereby, including any actions taken to
perfect or maintain priority of Agent’s Liens on any Collateral, to maintain any
insurance required hereunder or to verify Collateral; and (c) subject to the
limits of Section 10.1.1(b), each inspection, audit or appraisal with respect to
any Obligor or Collateral, whether prepared by Agent’s personnel or a third
party.  All reasonable legal, accounting and consulting fees shall be charged to
Borrowers by Agent’s professionals.  If, for any reason (including inaccurate
reporting on financial statements or a Compliance Certificate), it is determined
that a higher Applicable Margin should have applied to a period than was
actually applied, then the proper margin shall be applied retroactively and
Borrowers shall immediately pay to Agent, for the Pro Rata benefit of Lenders,
an amount equal to the difference between the amount of interest and fees that
would have accrued using the proper margin and the amount actually paid.  All
amounts payable by Borrowers under this Section shall be due on demand.
 
3.5           Illegality.  If any Lender determines that any Applicable Law has
made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to make, maintain or
fund LIBOR Revolver Loans, or to determine or charge interest rates based upon
LIBOR, or any Governmental Authority has imposed material restrictions on the
authority of such Lender to purchase or sell, or to take deposits of, Dollars in
the London interbank market, then, on notice thereof by such Lender to Agent,
any obligation of such Lender to make or continue LIBOR Revolver Loans or to
convert Base Rate Revolver Loans to LIBOR Revolver Loans shall be suspended
until such Lender notifies Agent that the circumstances giving rise to such
determination no longer exist.  Upon delivery of such notice, Borrowers shall
prepay or, if applicable, convert all LIBOR Revolver Loans of such Lender to
Base Rate Revolver Loans, either on the last day of the Interest Period
therefor, if such Lender may lawfully continue to maintain such LIBOR Revolver
Loans to such day, or immediately, if such Lender may not lawfully continue to
maintain such LIBOR Revolver Loans.  Upon any such prepayment or conversion,
Borrowers shall also pay accrued interest on the amount so prepaid or converted.
 
 
 
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3.6           Inability to Determine Rates.  If Required Lenders notify Agent
for any reason in connection with a request for a Borrowing of, or conversion to
or continuation of, a LIBOR Revolver Loan that (a) Dollar deposits are not being
offered to banks in the London interbank Eurodollar market for the applicable
amount and Interest Period of such Revolver Loan, (b) adequate and reasonable
means do not exist for determining LIBOR for the requested Interest Period, or
(c) LIBOR for the requested Interest Period does not adequately and fairly
reflect the cost to such Lenders of funding such Revolver Loan, then Agent will
promptly so notify Borrower Agent and each Lender.  Thereafter, the obligation
of Lenders to make or maintain LIBOR Revolver Loans shall be suspended until
Agent (upon instruction by Required Lenders) revokes such notice.  Upon receipt
of such notice, Borrower Agent may revoke any pending request for a Borrowing
of, conversion to or continuation of a LIBOR Revolver Loan or, failing that,
will be deemed to have submitted a request for a Base Rate Revolver Loan.
 
3.7           Increased Costs; Capital Adequacy.
 
3.7.1           Change in Law.  If any Change in Law shall:
 
(a)           impose modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in by,
any Lender (except any reserve requirement reflected in LIBOR) or Issuing Bank;
 
(b)           subject any Lender or Issuing Bank to any Tax with respect to any
Revolver Loan, Loan Document, Letter of Credit or participation in LC
Obligations, or change the basis of taxation of payments to such Lender or
Issuing Bank in respect thereof (except for Indemnified Taxes or Other Taxes
covered by Section 5.9 and the imposition of, or any change in the rate of, any
Excluded Tax payable by such Lender or Issuing Bank); or
 
(c)           impose on any Lender or Issuing Bank or the London interbank
market any other condition, cost or expense affecting any Revolver Loan, Loan
Document, Letter of Credit or participation in LC Obligations;
 
and the result thereof shall be to increase the cost to such Lender of making or
maintaining any LIBOR Revolver Loan (or of maintaining its obligation to make
any such Revolver Loan), or to increase the cost to such Lender or Issuing Bank
of participating in, issuing or maintaining any Letter of Credit (or of
maintaining its obligation to participate in or to issue any Letter of Credit),
or to reduce the amount of any sum received or receivable by such Lender or
Issuing Bank hereunder (whether of principal, interest or any other amount)
then, upon request of such Lender or Issuing Bank, Borrowers will pay to such
Lender or Issuing Bank, as applicable, such additional amount or amounts as will
compensate such Lender or Issuing Bank, as applicable, for such additional costs
incurred or reduction suffered.
 
3.7.2           Capital Adequacy.  If any Lender or Issuing Bank determines that
any Change in Law affecting such Lender or Issuing Bank or any Lending Office of
such Lender or such Lender’s or Issuing Bank’s holding company, if any,
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender’s, Issuing Bank’s or holding company’s capital as a
consequence of this Agreement, or such Lender’s or Issuing Bank’s Revolver
Commitments, Revolver Loans, Letters of Credit or participations in LC
Obligations, to a level below that which such Lender, Issuing Bank or holding
company could have achieved but for such
 
 
 
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Change in Law (taking into consideration such Lender’s, Issuing Bank’s and
holding company’s policies with respect to capital adequacy), then from time to
time Borrowers will pay to such Lender or Issuing Bank, as the case may be, such
additional amount or amounts as will compensate it or its holding company for
any such reduction suffered.
 
3.7.3           Compensation.  Failure or delay on the part of any Lender or
Issuing Bank to demand compensation pursuant to this Section shall not
constitute a waiver of its right to demand such compensation, but Borrowers
shall not be required to compensate a Lender or Issuing Bank for any increased
costs incurred or reductions suffered more than nine months prior to the date
that the Lender or Issuing Bank notifies Borrower Agent of the Change in Law
giving rise to such increased costs or reductions and of such Lender’s or
Issuing Bank’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the nine-month period referred to above shall be extended to include the
period of retroactive effect thereof).
 
3.8           Mitigation; Replacement of Foreign Lender.
 
3.8.1           Mitigation.  If any Lender gives a notice under Section 3.5 or
requests compensation under Section 3.7, or if Borrowers are required to pay
additional amounts with respect to a Lender under Section 5.9, then such Lender
shall use reasonable efforts to designate a different Lending Office or to
assign its rights and obligations hereunder to another of its offices, branches
or Affiliates, if, in the judgment of such Lender, such designation or
assignment (a) would eliminate the need for such notice or reduce amounts
payable or to be withheld in the future, as applicable; and (b) would not
subject the Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to it.  Borrowers shall pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
 
3.8.2           Replacement of Foreign Lender.
 
(a)           If Borrowers are obligated to make any material payments under
Section 5.9 to any Foreign Lender (a “Non-Exempt Foreign Lender”), then Borrower
Agent, upon at least 5 Business Days prior irrevocable notice to Agent and the
Non-Exempt Foreign Lender, may permanently replace the Non-Exempt Foreign Lender
with one or more Eligible Assignees with the consent of Agent (which shall not
be unreasonably withheld or delayed) (each, a “Substitute Lender”), and the
Non-Exempt Foreign Lender shall have no right to refuse to be replaced
hereunder.  Such notice to replace the Non-Exempt Foreign Lender shall specify
an effective date for such replacement, which date shall not be later than 15
Business Days after the date such notice is given.
 
(b)           Prior to the effective date of such replacement, the Non-Exempt
Foreign Lender and each Substitute Lender shall execute and deliver an
Assignment and Acceptance, subject only to the Non-Exempt Foreign Lender being
repaid its Pro Rata share of the outstanding Obligations without any premium or
penalty of any kind whatsoever.  If the Non-Exempt Foreign Lender shall refuse
or fail to execute and deliver any such Assignment and Acceptance prior to the
effective date of such replacement, the Non-Exempt Foreign Lender shall be
deemed to have executed and delivered such Assignment and Acceptance.  The
replacement of any Non-Exempt Foreign Lender
 
 
 
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shall be made in accordance with the terms of Section 13.3.  Until such time as
the Substitute Lender shall have acquired all of the Obligations, the
Commitments, and the other rights and obligations of the Non-Exempt Foreign
Lender hereunder and under the other Loan Documents, the Non-Exempt Foreign
Lender shall remain obligated to make the Non-Exempt Foreign Lender’s Pro Rata
share of Revolver Loans and to purchase a participation in each Letter of
Credit, according to its Pro Rata share.
 
3.9           Funding Losses.  If for any reason (other than default by a
Lender) (a) any Borrowing of, or conversion to or continuation of, a LIBOR
Revolver Loan does not occur on the date specified therefor in a Notice of
Borrowing or Notice of Conversion/Continuation (whether or not withdrawn), (b)
any repayment or conversion of a LIBOR Revolver Loan occurs on a day other than
the end of its Interest Period, or (c) Borrowers fail to repay a LIBOR Revolver
Loan when required hereunder, then Borrowers shall pay to Agent its customary
administrative charge and to each Lender all losses and expenses that it
sustains as a consequence thereof, including loss of anticipated profits and any
loss or expense actually incurred arising from liquidation or redeployment of
funds or from fees payable to terminate deposits of matching funds.  Lenders
shall not be required to purchase Dollar deposits in the London interbank market
or any other offshore Dollar market to fund any LIBOR Revolver Loan, but the
provisions hereof shall be deemed to apply as if each Lender had purchased such
deposits to fund its LIBOR Revolver Loans.
 
3.10           Maximum Interest.  Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by Applicable Law (“maximum rate”).  If Agent or any Lender shall
receive interest in an amount that exceeds the maximum rate, the excess interest
shall be applied to the principal of the Obligations or, if it exceeds such
unpaid principal, refunded to Borrowers.  In determining whether the interest
contracted for, charged or received by Agent or a Lender exceeds the maximum
rate, such Person may, to the extent permitted by Applicable Law, (a)
characterize any payment that is not principal as an expense, fee or premium
rather than interest; (b) exclude voluntary prepayments and the effects thereof;
and (c) amortize, prorate, allocate and spread in equal or unequal parts the
total amount of interest throughout the contemplated term of the Obligations
hereunder.
 
SECTION 4.      LOAN ADMINISTRATION
 
4.1           Manner of Borrowing and Funding Revolver Loans.
 
4.1.1           Notice of Borrowing.
 
(a)           Whenever a Borrower desires funding of a Borrowing of Revolver
Loans, Borrower Agent shall give Agent a Notice of Borrowing.  Such notice must
be received by Agent no later than 11:00 a.m. (i) on the Business Day of the
requested funding date, in the case of Base Rate Revolver Loans, and (ii) at
least three Business Days prior to the requested funding date, in the case of
LIBOR Revolver Loans.  Notices received after 11:00 a.m. shall be deemed
received on the next Business Day.  Each Notice of Borrowing shall be
irrevocable and shall specify (A) which Borrower is requesting a Revolver Loan,
(B) the amount of the Borrowing, (C) the requested funding date (which must be a
Business Day), (D) whether the Borrowing is to be made as Base Rate Revolver
Loans or LIBOR Revolver Loans, and (E) in the case of LIBOR Revolver Loans, the
duration of the applicable Interest Period (which shall be deemed to be 30 days
if not specified).
 
 
 
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(b)           Unless payment is otherwise timely made by Borrowers, the becoming
due of any Obligations (whether principal, interest, fees or other charges,
including Extraordinary Expenses, LC Obligations, Cash Collateral and Secured
Bank Product Obligations) shall be deemed to be a request for Base Rate Revolver
Loans on the due date, in the amount of such Obligations.  The proceeds of such
Revolver Loans shall be disbursed as direct payment of the relevant
Obligation.  In addition, Agent may, at its option, charge such Obligations
against any operating, investment or other account of a Borrower maintained with
Agent or any of its Affiliates.
 
(c)           If Borrowers establish a controlled disbursement account with
Agent or any Affiliate of Agent, then the presentation for payment of any check
or other item of payment drawn on such account at a time when there are
insufficient funds to cover it shall be deemed to be a request for Base Rate
Revolver Loans on the date of such presentation, in the amount of the check and
items presented for payment.  The proceeds of such Revolver Loans may be
disbursed directly to the controlled disbursement account or other appropriate
account.
 
4.1.2           Fundings by Lenders.  Each Lender shall timely honor its
Revolver Commitment by funding its Pro Rata share of each Borrowing of Revolver
Loans that is properly requested hereunder.  Except for Borrowings to be made as
Swingline Loans, Agent shall endeavor to notify Lenders of each Notice of
Borrowing (or deemed request for a Borrowing) by 12:00 noon on the proposed
funding date for Base Rate Revolver Loans or by 3:00 p.m. at least two Business
Days before any proposed funding of LIBOR Revolver Loans.  Each Lender shall
fund to Agent such Lender’s Pro Rata share of the Borrowing to the account
specified by Agent in immediately available funds not later than 2:00 p.m. on
the requested funding date, unless Agent’s notice is received after the times
provided above, in which event Lender shall fund its Pro Rata share by 11:00
a.m. on the next Business Day.  Subject to its receipt of such amounts from
Lenders, Agent shall disburse the proceeds of the Revolver Loans as directed by
Borrower Agent.  Unless Agent shall have received (in sufficient time to act)
written notice from a Lender that it does not intend to fund its Pro Rata share
of a Borrowing, Agent may assume that such Lender has deposited or promptly will
deposit its share with Agent, and Agent may disburse a corresponding amount to
Borrowers.  If a Lender’s share of any Borrowing or of any settlement pursuant
to Section 4.1.3(b) is not received by Agent, then Borrowers agree to repay to
Agent on demand the amount of such share, together with interest thereon from
the date disbursed until repaid, at the rate applicable to such Borrowing.
 
4.1.3           Swingline Loans; Settlement.
 
(a)           Agent may, but shall not be obligated to, advance Swingline Loans
to Borrowers, up to an aggregate outstanding amount not to exceed 10% of the
Revolving Commitments, unless the funding is specifically required to be made by
all Lenders hereunder.  Each Swingline Loan shall constitute a Revolver Loan for
all purposes, except that payments thereon shall be made to Agent for its own
account.  The obligation of Borrowers to repay Swingline Loans shall be
evidenced by the records of Agent and need not be evidenced by any promissory
note.
 
(b)           To facilitate administration of the Revolver Loans, Lenders and
Agent agree (which agreement is solely among them, and not for the benefit of or
enforceable by any Borrower) that settlement among them with respect to
Swingline Loans and other Revolver Loans may take place periodically on a date
determined from time to time by Agent, which shall occur at least twice each
month.  On each settlement date, settlement shall be made with each Lender in
accordance with the Settlement Report delivered by Agent to Lenders.  Between
settlement dates, Agent may in its discretion apply payments on Revolver Loans
to Swingline Loans, regardless of any designation
 
 
 
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by Borrower or any provision herein to the contrary.  Each Lender’s obligation
to make settlements with Agent is absolute and unconditional, without offset,
counterclaim or other defense, and whether or not the Revolver Commitments have
terminated, an Overadvance exists or the conditions in Section 6 are
satisfied.  If, due to an Insolvency Proceeding with respect to a Borrower or
otherwise, any Swingline Loan may not be settled among Lenders hereunder, then
each Lender shall be deemed to have purchased from Agent a Pro Rata
participation in each unpaid Swingline Loan and shall transfer the amount of
such participation to Agent, in immediately available funds, within one Business
Day after Agent’s request therefor.
 
4.1.4           Notices.  Each Borrower authorizes Agent and Lenders to extend,
convert or continue Revolver Loans, effect selections of interest rates, and
transfer funds to or on behalf of Borrowers based on telephonic or e-mailed
instructions.  Borrowers shall confirm each such request by prompt delivery to
Agent of a Notice of Borrowing or Notice of Conversion/Continuation, if
applicable, but if it differs in any material respect from the action taken by
Agent or Lenders, the records of Agent and Lenders shall govern.  Neither Agent
nor any Lender shall have any liability for any loss suffered by a Borrower as a
result of Agent or any Lender acting upon its understanding of telephonic or
e-mailed instructions from a person believed in good faith by Agent or any
Lender to be a person authorized to give such instructions on a Borrower’s
behalf.
 
4.2           Defaulting Lender.  Agent may (but shall not be required to), in
its discretion, retain any payments or other funds received by Agent that are to
be provided to a Defaulting Lender hereunder, and may apply such funds to such
Lender’s defaulted obligations or readvance the funds to Borrowers in accordance
with this Agreement.  The failure of any Lender to fund a Revolver Loan, to make
any payment in respect of LC Obligations or to otherwise perform its obligations
hereunder shall not relieve any other Lender of its obligations, and no Lender
shall be responsible for default by another Lender.  Lenders and Agent agree
(which agreement is solely among them, and not for the benefit of or enforceable
by any Borrower) that, solely for purposes of determining a Defaulting Lender’s
right to vote on matters relating to the Loan Documents and to share in
payments, fees and Collateral proceeds thereunder, a Defaulting Lender shall not
be deemed to be a “Lender” until all its defaulted obligations have been cured.
 
4.3           Number and Amount of LIBOR Revolver Loans; Determination of
Rate.  Each Borrowing of LIBOR Revolver Loans when made shall be in a minimum
amount of $5,000,000, or an increment of $1,000,000 in excess thereof.  No more
than 8 Borrowings of LIBOR Revolver Loans may be outstanding at any time, and
all LIBOR Revolver Loans having the same length and beginning date of their
Interest Periods shall be aggregated together and considered one Borrowing for
this purpose.  Upon determining LIBOR for any Interest Period requested by
Borrowers, Agent shall promptly notify Borrowers thereof by telephone or
electronically and, if requested by Borrowers, shall confirm any telephonic
notice in writing.
 
4.4           Borrower Agent.  Each Borrower hereby designates CAI (“Borrower
Agent”) as its representative and agent for all purposes under the Loan
Documents, including requests for Revolver Loans and Letters of Credit,
designation of interest rates, delivery or receipt of communications,
preparation and delivery of Borrowing Base Certificates and financial reports,
receipt and payment of Obligations, requests for waivers, amendments or other
accommodations, actions under the Loan Documents (including in respect of
compliance with covenants), and all other dealings with Agent, Issuing Bank or
any Lender.  Borrower Agent hereby accepts such appointment.  Agent
 
 
 
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and Lenders shall be entitled to rely upon, and shall be fully protected in
relying upon, any notice or communication (including any notice of borrowing)
delivered by Borrower Agent on behalf of any Borrower.  Agent and Lenders may
give any notice or communication with a Borrower hereunder to Borrower Agent on
behalf of such Borrower.  Each of Agent, Issuing Bank and Lenders shall have the
right, in its discretion, to deal exclusively with Borrower Agent for any or all
purposes under the Loan Documents.  Each Borrower agrees that any notice,
election, communication, representation, agreement or undertaking made on its
behalf by Borrower Agent shall be binding upon and enforceable against it.
 
4.5           One Obligation.  The Revolver Loans, LC Obligations and other
Obligations shall constitute one general obligation of Borrowers and (unless
otherwise expressly provided in any Loan Document) shall be secured by Agent’s
Lien upon all Collateral; provided, however, that Agent and each Lender shall be
deemed to be a creditor of, and the holder of a separate claim against, each
Borrower to the extent of any Obligations jointly or severally owed by such
Borrower.
 
4.6           Effect of Termination.  On the effective date of the full
termination of the Revolver Commitments, all Obligations shall be immediately
due and payable, and any Lender may terminate its and its Affiliates’ Bank
Products (including, only with the consent of Agent, any Cash Management
Services).  All undertakings of Borrowers contained in the Loan Documents shall
survive any termination, and Agent shall retain its Liens in the Collateral and
all of its rights and remedies under the Loan Documents until Full Payment of
the Obligations.  Notwithstanding Full Payment of the Obligations, Agent shall
not be required to terminate its Liens in any Collateral unless, with respect to
any damages Agent may incur as a result of the dishonor or return of Payment
Items applied to Obligations, Agent receives (a) a written agreement, executed
by Borrowers and any Person whose advances are used in whole or in part to
satisfy the Obligations, indemnifying Agent and Lenders from any such damages;
or (b) such Cash Collateral as Agent, in its discretion, deems necessary to
protect against any such damages.  The provisions of Sections 2.3, 3.4, 3.6,
3.7, 3.9, 5.5, 5.9, 5.10, 12, 14.2 and this Section, and the obligation of each
Obligor and Lender with respect to each indemnity given by it in any Loan
Document, shall survive Full Payment of the Obligations and any release relating
to this credit facility.
 
SECTION 5.      PAYMENTS
 
5.1           General Payment Provisions.  All payments of Obligations shall be
made in Dollars, without offset, counterclaim or defense of any kind, free of
(and without deduction for) any Taxes, and in immediately available funds, not
later than 12:00 noon on the due date and shall be made (except as otherwise
instructed by Agent after the Closing Date) at Agent’s office identified under
Agent’s signature hereto.  Any payment after such time shall be deemed made on
the next Business Day.  If any payment under the Loan Documents shall be stated
to be due on a day other than a Business Day, the due date shall be extended to
the next Business Day and such extension of time shall be included in any
computation of interest and fees.  Any payment of a LIBOR Revolver Loan prior to
the end of its Interest Period shall be accompanied by all amounts due under
Section 3.9.  Any prepayment of Revolver Loans shall be applied first to Base
Rate Revolver Loans and then to LIBOR Revolver Loans; provided, however, that as
long as no Event of Default exists, prepayments of LIBOR Revolver Loans may, at
the option of Borrowers and Agent, be held by Agent as Cash Collateral and
applied to such Revolver Loans at the end  of their Interest Periods.
 
 
 
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5.2           Repayment of Revolver Loans.  Revolver Loans shall be due and
payable in full on the Revolver Termination Date, unless payment is sooner
required hereunder.  Revolver Loans may be prepaid from time to time, without
penalty or premium.  If any Asset Disposition includes the disposition of
Contracts or Inventory, then Net Proceeds equal to the greater of (a) the net
book value of such Contracts and Inventory, or (b) the reduction in the
Borrowing Base upon giving effect to such disposition, shall be applied to the
Revolver Loans.  Notwithstanding anything herein to the contrary, if an
Overadvance exists, Borrowers shall, on the sooner of Agent’s demand or the
first Business Day after any Borrower has knowledge thereof, repay the
outstanding Revolver Loans in an amount sufficient to reduce the principal
balance of Revolver Loans so that aggregate Revolver Loans made to CAI do not
exceed the CAI Borrowing Base, the aggregate Revolver Loans made to CCI and CCCI
do not exceed the CCI Borrowing Base and the aggregate Revolver Loans made to
all Borrowers do not exceed the Adjusted Borrowing Base.
 
5.3           Curative Equity.  Within 1 Business Day of the date of receipt by
any Borrower of the proceeds of any Curative Equity pursuant to Section 10.4,
such Borrower shall prepay the outstanding principal of the Obligations in
accordance with Section 5.1 in an amount equal to 100% of such proceeds, net of
any reasonable out-of-pocket expenses incurred in connection with the issuance
of such Curative Equity.
 
5.4           Payment of Other Obligations.  Obligations other than Revolver
Loans, including LC Obligations and Extraordinary Expenses, shall be paid by
Borrowers as provided in the Loan Documents or, if no payment date is specified,
on demand.
 
5.5           Marshaling; Payments Set Aside.  None of Agent or Lenders shall be
under any obligation to marshal any assets in favor of any Obligor or against
any Obligations.  If any payment by or on behalf of Borrowers is made to Agent,
Issuing Bank or any Lender, or Agent, Issuing Bank or any Lender exercises a
right of setoff, and such payment or the proceeds of such setoff or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by
Agent, Issuing Bank or such Lender in its discretion) to be repaid to a trustee,
receiver or any other Person, then to the extent of such recovery, the
Obligation originally intended to be satisfied, and all Liens, rights and
remedies relating thereto, shall be revived and continued in full force and
effect as if such payment had not been made or such setoff had not occurred.
 
5.6           Post-Default Allocation of Payments.
 
5.6.1           Allocation.  Notwithstanding anything herein to the contrary,
during an Event of Default, monies to be applied to the Obligations, whether
arising from payments by Obligors, realization on Collateral, setoff or
otherwise, shall be allocated as follows:
 
(a)           FIRST, to all costs and expenses, including Extraordinary
Expenses, owing to Agent;
 
(b)           SECOND, to all amounts owing to Agent on Swingline Loans and
Protective Advances;
 
 
 
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(c)           THIRD, to all costs and expenses, including Extraordinary
Expenses, owing to any Lender;
 
(d)           FOURTH, to all amounts owing to Issuing Bank on LC Obligations;
 
(e)           FIFTH, to all Obligations constituting fees (other than Secured
Bank Product Obligations);
 
(f)           SIXTH, to all Obligations constituting interest (other than
Secured Bank Product Obligations);
 
(g)           SEVENTH, to provide Cash Collateral for outstanding Letters of
Credit;
 
(h)           EIGHTH, to all Revolver Loans and Noticed Hedges, including Cash
Collateralization of outstanding Noticed Hedges;
 
(i)           NINTH, to all other Obligations (including Secured Bank Product
Obligations); and
 
(j)           LAST, to the Borrowers.
 
Amounts shall be applied to each category of Obligations set forth above until
Full Payment thereof and then to the next category.  If amounts are insufficient
to satisfy a category, they shall be applied on a pro rata basis among the
Obligations in the category.  Amounts distributed with respect to any Secured
Bank Product Obligations shall be the lesser of the maximum Secured Bank Product
Obligations last reported to Agent or the actual Secured Bank Product
Obligations as calculated by the methodology reported to Agent for determining
the amount due.  Agent shall have no obligation to calculate the amount to be
distributed with respect to any Secured Bank Product Obligations, and may
request a reasonably detailed calculation of such amount from the applicable
Secured Party.  If a Secured Party fails to deliver such calculation within 5
Business Days following request by Agent, Agent may assume the amount to be
distributed is zero. The allocations set forth in this Section are solely to
determine the rights and priorities of Agent and Secured Parties as among
themselves, and may be changed by agreement among them without the consent of
any Obligor.  This Section is not for the benefit of or enforceable by any
Borrower.
 
5.6.2           Erroneous Application.  Agent shall not be liable for any
application of amounts made by it in good faith and, if any such application is
subsequently determined to have been made in error, the sole recourse of any
Lender or other Person to which such amount should have been made shall be to
recover the amount from the Person that actually received it (and, if such
amount was received by any Lender, such Lender hereby agrees to return it).
 
5.7           Application of Payments.  The ledger balance in the main Dominion
Account as of the end of a Business Day shall be applied to the Obligations at
the beginning of the next Business Day, during any Dominion Trigger Period.  If,
as a result of such application, a credit balance exists, the balance shall not
accrue interest in favor of Borrowers and shall be made available to Borrowers
as long as no Default or Event of Default exists.  Each Borrower irrevocably
waives the right to direct the application of any payments or Collateral
proceeds, and agrees that Agent shall have the continuing, exclusive right to
apply and reapply same against the Obligations, in such manner as Agent deems
advisable.
 
 
 
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5.8           Loan Account; Account Stated.
 
5.8.1           Loan Account.  Agent shall maintain in accordance with its usual
and customary practices an account or accounts (“Loan Account”) evidencing the
Debt of Borrowers resulting from each Revolver Loan or issuance of a Letter of
Credit from time to time.  Any failure of Agent to record anything in the Loan
Account, or any error in doing so, shall not limit or otherwise affect the
obligation of Borrowers to pay any amount owing hereunder.  Agent may maintain a
single Loan Account in the name of Borrower Agent, and each Borrower confirms
that such arrangement shall have no effect on the joint and several character of
its liability for the Obligations.
 
5.8.2           Entries Binding.  Entries made in the Loan Account shall
constitute presumptive evidence of the information contained therein.  If any
information contained in the Loan Account is provided to or inspected by any
Person, then such information shall be conclusive and binding on such Person for
all purposes absent manifest error, except to the extent such Person notifies
Agent in writing within 30 days after receipt or inspection that specific
information is subject to dispute; provided, that payment by Borrowers to Agent
of any amounts owed hereunder which are under dispute by Borrowers shall not be
deemed a waiver of Borrowers’ right to continue such dispute.
 
5.9           Taxes.
 
5.9.1           Payments Free of Taxes.  All payments by Obligors of Obligations
shall be free and clear of and without reduction for any Taxes.  If Applicable
Law requires any Obligor or Agent to withhold or deduct any Tax (including
backup withholding or withholding Tax), the withholding or deduction shall be
based on information provided pursuant to Section 5.10 and Agent shall pay the
amount withheld or deducted to the relevant Governmental Authority.  If the
withholding or deduction is made on account of Indemnified Taxes or Other Taxes,
the sum payable by Borrowers shall be increased so that Agent, Lender or Issuing
Bank, as applicable, receives an amount equal to the sum it would have received
if no such withholding or deduction (including deductions applicable to
additional sums payable under this Section) had been made.  Without limiting the
foregoing, Borrowers shall timely pay all Other Taxes to the relevant
Governmental Authorities.
 
5.9.2           Payment.  Borrowers shall indemnify, hold harmless and reimburse
(within 10 days after demand therefor) Agent, Lenders and Issuing Bank for any
Indemnified Taxes or Other Taxes (including those attributable to amounts
payable under this Section) withheld or deducted by any Obligor or Agent, or
paid by Agent, any Lender or Issuing Bank, with respect to any Obligations,
Letters of Credit or Loan Documents, whether or not such Taxes were properly
asserted by the relevant Governmental Authority (provided, that payment by
Borrowers to Agent of any amounts owed hereunder which are under dispute by
Borrowers shall not be deemed a waiver of Borrower’s right to continue such
dispute), and including all penalties, interest and reasonable expenses relating
thereto which arise as a result of any action or inaction by Borrowers, as well
as any amount that a Lender or Issuing Bank fails to pay indefeasibly to Agent
under Section 5.10.  A certificate as to the amount of any such payment or
liability delivered to Borrower Agent by Agent, or by a Lender or Issuing Bank
(with a copy to Agent), shall be conclusive, absent manifest error.  As soon as
practicable after any payment of Taxes by a Borrower, Borrower Agent shall
deliver to Agent a receipt from the Governmental Authority or other evidence of
payment satisfactory to Agent.
 
 
 
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5.10           Lender Tax Information.
 
5.10.1           Status of Lenders.  Each Lender shall deliver documentation and
information to Agent and Borrower Agent, at the times and in the form required
by Applicable Law or reasonably requested by Agent or Borrower Agent, sufficient
to permit Agent or Borrowers to determine (a) whether or not payments made with
respect to Obligations are subject to Taxes, (b) if applicable, the required
rate of withholding or deduction, and (c) such Lender’s entitlement to any
available exemption from, or reduction of, applicable Taxes for such payments or
otherwise to establish such Lender’s status for withholding tax purposes in the
applicable jurisdiction.
 
5.10.2           Documentation.  If a Borrower is resident for tax purposes in
the United States, any Lender that is a “United States person” within the
meaning of section 7701(a)(30) of the Code shall deliver to Agent and Borrower
Agent IRS Form W-9 or such other documentation or information prescribed by
Applicable Law or reasonably requested by Agent or Borrower Agent to determine
whether such Lender is subject to backup withholding or information reporting
requirements.  If any Foreign Lender is entitled to any exemption from or
reduction of withholding tax for payments with respect to the Obligations, it
shall deliver to Agent and Borrower Agent, on or prior to the date on which it
becomes a Lender hereunder (and from time to time thereafter upon request by
Agent or Borrower Agent, but only if such Foreign Lender is legally entitled to
do so), (a) IRS Form W-8BEN claiming eligibility for benefits of an income tax
treaty to which the United States is a party; (b) IRS Form W-8ECI; (c) IRS Form
W-8IMY and all required supporting documentation; (d) in the case of a Foreign
Lender claiming the benefits of the exemption for portfolio interest under
section 881(c) of the Code, IRS Form W-8BEN and a certificate showing such
Foreign Lender is not (i) a “bank” within the meaning of section 881(c)(3)(A) of
the Code, (ii) a “10 percent shareholder” of any Obligor within the meaning of
section 881(c)(3)(B) of the Code, or (iii) a “controlled foreign corporation”
described in section 881(c)(3)(C) of the Code; or (e) any other form prescribed
by Applicable Law as a basis for claiming exemption from or a reduction in
withholding tax, together with such supplementary documentation necessary to
allow Agent and Borrowers to determine the withholding or deduction required to
be made.
 
5.10.3           Lender Obligations.  Each Lender and Issuing Bank shall
promptly notify Borrowers and Agent of any change in circumstances that would
change any claimed Tax exemption or reduction.  Each Lender and Issuing Bank
shall indemnify, hold harmless and reimburse (within 10 days after demand
therefor) Borrowers and Agent for any Taxes, losses, claims, liabilities,
penalties, interest and expenses (including reasonable attorneys’ fees) incurred
by or asserted against a Borrower or Agent by any Governmental Authority due to
such Lender’s or Issuing Bank’s failure to deliver, or inaccuracy or deficiency
in, any documentation required to be delivered by it pursuant to this
Section.  Each Lender and Issuing Bank authorizes Agent to set off any amounts
due to Agent under this Section against any amounts payable to such Lender or
Issuing Bank under any Loan Document.
 
5.11           Nature and Extent of Each Borrower’s Liability.
 
5.11.1           Joint and Several Liability.  Each Borrower agrees that it is
jointly and severally liable for, and absolutely and unconditionally guarantees
to Agent and Lenders the prompt payment and performance of, all Obligations and
all agreements under the Loan Documents.  Each Borrower agrees that its guaranty
obligations hereunder constitute a continuing guaranty of payment and not of
collection, that such obligations shall not be discharged until Full Payment of
the Obligations, and that such obligations are absolute and unconditional,
irrespective of (a) the genuineness, validity, regularity, enforceability,
subordination or any future modification of, or change
 
 
 
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in, any Obligations or Loan Document, or any other document, instrument or
agreement to which any Obligor is or may become a party or be bound; (b) the
absence of any action to enforce this Agreement (including this Section) or any
other Loan Document, or any waiver, consent or indulgence of any kind by Agent
or any Lender with respect thereto; (c) the existence, value or condition of, or
failure to perfect a Lien or to preserve rights against, any security or
guaranty for the Obligations or any action, or the absence of any action, by
Agent or any Lender in respect thereof (including the release of any security or
guaranty); (d) the insolvency of any Obligor; (e) any election by Agent or any
Lender in an Insolvency Proceeding for the application of Section 1111(b)(2) of
the Bankruptcy Code; (f) any borrowing or grant of a Lien by any other Borrower,
as debtor-in-possession under Section 364 of the Bankruptcy Code or otherwise;
(g) the disallowance of any claims of Agent or any Lender against any Obligor
for the repayment of any Obligations under Section 502 of the Bankruptcy Code or
otherwise; or (h) any other action or circumstances that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
except Full Payment of all Obligations.
 
5.11.2           Waivers.
 
(a)           Each Borrower expressly waives all rights that it may have now or
in the future under any statute, at common law, in equity or otherwise, to
compel Agent or Lenders to marshal assets or to proceed against any Obligor,
other Person or security for the payment or performance of any Obligations
before, or as a condition to, proceeding against such Borrower.  Each Borrower
waives all defenses available to a surety, guarantor or accommodation co-obligor
other than Full Payment of all Obligations.  It is agreed among each Borrower,
Agent and Lenders that the provisions of this Section 5.11 are the essence of
the transaction contemplated by the Loan Documents and that, but for such
provisions, Agent and Lenders would decline to make Loans and issue Letters of
Credit.  Each Borrower acknowledges that its guaranty pursuant to this Section
is necessary to the conduct and promotion of its business, and can be expected
to benefit such business.
 
(b)           Agent and Lenders may, in their sole discretion, pursue such
rights and remedies as they deem appropriate, including realization upon
Collateral or any Real Estate by judicial foreclosure or non-judicial sale or
enforcement, without affecting any rights and remedies under this Section
5.11.  If, in taking any action in connection with the exercise of any rights or
remedies, Agent or any Lender shall forfeit any other rights or remedies,
including the right to enter a deficiency judgment against any Borrower or other
Person, whether because of any Applicable Laws pertaining to “election of
remedies” or otherwise, each Borrower consents to such action and waives any
claim based upon it, even if the action may result in loss of any rights of
subrogation that any Borrower might otherwise have had.  Any election of
remedies that results in denial or impairment of the right of Agent or any
Lender to seek a deficiency judgment against any Borrower shall not impair any
other Borrower’s obligation to pay the full amount of the Obligations.  Each
Borrower waives all rights and defenses arising out of an election of remedies,
such as nonjudicial foreclosure with respect to any security for the
Obligations, even though that election of remedies destroys such Borrower’s
rights of subrogation against any other Person.  Agent may bid all or a portion
of the Obligations at any foreclosure or trustee’s sale or at any private sale,
and the amount of such bid need not be paid by Agent but shall be credited
against the Obligations.  The amount of the successful bid at any such sale,
whether
 
 
 
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Agent or any other Person is the successful bidder, shall be conclusively deemed
to be the fair market value of the Collateral, and the difference between such
bid amount and the remaining balance of the Obligations shall be conclusively
deemed to be the amount of the Obligations guaranteed under this Section 5.11,
notwithstanding that any present or future law or court decision may have the
effect of reducing the amount of any deficiency claim to which Agent or any
Lender might otherwise be entitled but for such bidding at any such sale.
 
5.11.3           Extent of Liability; Contribution.
 
(a)           Notwithstanding anything herein to the contrary, each Borrower’s
liability under this Section 5.11 shall be limited to the greater of (i) all
amounts for which such Borrower is primarily liable, as described below, and
(ii) such Borrower’s Allocable Amount.
 
(b)           If any Borrower makes a payment under this Section 5.11 of any
Obligations (other than amounts for which such Borrower is primarily liable) (a
“Guarantor Payment”) that, taking into account all other Guarantor Payments
previously or concurrently made by any other Borrower, exceeds the amount that
such Borrower would otherwise have paid if each Borrower had paid the aggregate
Obligations satisfied by such Guarantor Payments in the same proportion that
such Borrower’s Allocable Amount bore to the total Allocable Amounts of all
Borrowers, then such Borrower shall be entitled to receive contribution and
indemnification payments from, and to be reimbursed by, each other Borrower for
the amount of such excess, pro rata based upon their respective Allocable
Amounts in effect immediately prior to such Guarantor Payment.  The “Allocable
Amount” for any Borrower shall be the maximum amount that could then be
recovered from such Borrower under this Section 5.11 without rendering such
payment voidable under Section 548 of the Bankruptcy Code or under any
applicable state fraudulent transfer or conveyance act, or similar statute or
common law.
 
(c)           Nothing contained in this Section 5.11 shall limit the liability
of any Borrower to pay Revolver Loans made directly or indirectly to that
Borrower (including Revolver Loans advanced to any other Borrower and then
re-loaned or otherwise transferred to, or for the benefit of, such Borrower), LC
Obligations relating to Letters of Credit issued to support such Borrower’s
business, and all accrued interest, fees, expenses and other related Obligations
with respect thereto, for which such Borrower shall be primarily liable for all
purposes hereunder.  Agent and Lenders shall have the right, at any time in
their discretion, to condition Revolver Loans and Letters of Credit upon a
separate calculation of borrowing availability for each Borrower and to restrict
the disbursement and use of such Revolver Loans and Letters of Credit to such
Borrower.
 
5.11.4           Joint Enterprise.  Each Borrower has requested that Agent and
Lenders make this credit facility available to Borrowers on a combined basis, in
order to finance Borrowers’ business most efficiently and
economically.  Borrowers’ business is a mutual and collective enterprise, and
the successful operation of each Borrower is dependent upon the successful
performance of the integrated group.  Borrowers believe that consolidation of
their credit facility will enhance the borrowing power of each Borrower and ease
administration of the facility, all to their mutual advantage.  Borrowers
acknowledge that Agent’s and Lenders’ willingness to extend credit and to
administer the Collateral on a combined basis hereunder is done solely as an
accommodation to Borrowers and at Borrowers’ request.
 
 
 
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5.11.5           Subordination.  Each Borrower hereby subordinates any claims,
including any rights at law or in equity to payment, subrogation, reimbursement,
exoneration, contribution, indemnification or set off, that it may have at any
time against any other Obligor, howsoever arising, to the Full Payment of all
Obligations.
 
SECTION 6.     CONDITIONS PRECEDENT/SUBSEQUENT
 
6.1           Conditions Precedent to Initial Revolver Loans.  In addition to
the conditions set forth in Section 6.2, Lenders shall not be required to fund
any requested Revolver Loan, issue any Letter of Credit, or otherwise extend
credit to Borrowers hereunder, until the date (“Closing Date”) that each of the
following conditions has been satisfied:
 
(a)           Notes shall have been executed by Borrowers and delivered to each
Lender that requests issuance of a Note.  Each other Loan Document (other than a
Compliance Certificate) shall have been duly executed and delivered to Agent by
each of the signatories thereto, and each Obligor (to the extent a party
thereto) shall be in compliance with all terms thereof.
 
(b)           Agent shall have received acknowledgments of all filings or
recordations necessary to perfect its Liens in the Collateral, as well as UCC
and Lien searches and other evidence satisfactory to Agent that such Liens are
the only Liens upon the Collateral, except Permitted Liens.
 
(c)           Agent shall have received certificates, in the form of Exhibit D,
from a knowledgeable Senior Officer of Parent and each Borrower certifying that,
after giving effect to the initial Revolver Loans and transactions hereunder,
(i) it is Solvent; (ii) no Default or Event of Default exists; (iii) the
representations and warranties set forth in Section 9 are true and correct; and
(iv) it has complied with all agreements and conditions to be satisfied by it
under the Loan Documents.
 
(d)           Agent shall have received a certificate of a duly authorized
officer of each Obligor, certifying (i) that attached copies of such Obligor’s
Organic Documents are true and complete, and in full force and effect, without
amendment except as shown; (ii) that an attached copy of resolutions authorizing
execution and delivery of the Loan Documents is true and complete, and that such
resolutions are in full force and effect, were duly adopted, have not been
amended, modified or revoked, and constitute all resolutions adopted with
respect to this credit facility; and (iii) to the title, name and signature of
each Person authorized to sign the Loan Documents.  Agent may conclusively rely
on this certificate until it is otherwise notified by the applicable Obligor in
writing.
 
(e)           Agent shall have received a written opinion of Andrews Kurth, LLP,
as well as any local counsel to Borrowers or Agent, with respect to the Loan
Documents.
 
(f)           Agent shall have received a written opinion from Parent’s
Corporate General Counsel with respect to existence and authority of each
Obligor, and with respect to each Obligor there has been no violation of laws
and there exists no litigation regarding each Obligor.
 
(g)           Agent shall have received a written opinion of Hughes Watters
Askanase L.L.P. regarding the enforceability of Borrowers’ form of Contract and
its compliance with any Requirement of Law with respect to the laws of the State
of Texas  and relevant federal laws.
 
 
 
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(h)           Agent shall have received a written opinion of Hughes Watters
Askanase L.L.P. regarding the enforceability of Borrowers’ form of Contract and
its compliance with any Requirement of Law with respect to the laws of the State
of Oklahoma and relevant federal laws.
 
(i)           Agent shall have received a written opinion of McGlinchey Stafford
PLLC regarding the enforceability of Borrowers’ form of Contract and its
compliance with any Requirement of Law with respect to the laws of the State of
Louisiana and relevant federal laws.
 
(j)           Agent shall have received copies of the charter documents of each
Obligor, certified by the Secretary of State or other appropriate official of
such Obligor’s jurisdiction of organization.  Agent shall have received good
standing certificates for each Obligor, issued by the Secretary of State or
other appropriate official of such Obligor’s jurisdiction of organization and
each jurisdiction where such Obligor’s conduct of business or ownership of
Property necessitates qualification.
 
(k)           Agent shall have completed its business, financial and legal due
diligence of Obligors, including a roll-forward of its previous field
examination, with results satisfactory to Agent.  No material adverse change in
the financial condition of any Obligor or in the quality, quantity or value of
any Collateral shall have occurred since July 31, 2010.
 
(l)           Borrowers shall have paid all fees and expenses due and payable to
Agent and Lenders on the Closing Date.
 
(m)           Agent shall have received a Borrowing Base Certificate prepared as
of November 12, 2010.  Upon giving effect to the initial funding of Revolver
Loans and issuance of Letters of Credit, the making of the Term Loan under the
Term Loan Facility, and the payment by Borrowers of all fees and expenses
incurred in connection herewith, the Term Loan Facility and the assignment of
assets pursuant to the Intercompany Assignment Agreement, the completion of an
equity rights offering, the redemption of Borrowers’ Existing Securitization
Facility, as well as any payables stretched beyond their customary payment
practices, Availability shall be at least $60,000,000.
 
(n)           Agent shall have received copies of the Term Loan Agreement and
the Term Loan Documents.
 
(o)           Agent shall have received a letter from each third party service
maintenance providers acknowledging that any refunds owed to a Borrower as a
result of the cancellation of a third party service maintenance plan purchased
under a Contract shall be paid directly to the Dominion Account, which letter
shall be in form and substance satisfactory to Agent.
 
(p)           Agent shall have received a letter from each third party credit
insurance provider acknowledging that any refunds owed to a Borrower as a result
of the cancellation of a credit insurance policy shall be paid directly to the
Dominion Account, which letter shall be in form and substance satisfactory to
Agent.
 
(q)           Agent shall have received a fully signed Intercreditor Agreement.
 
 
 
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(r)           Agent shall have received evidence that the Existing
Securitization Facility (as defined in the Original Loan Agreement) will be paid
in full and terminated on the Closing Date.
 
(s)           Agent shall have received each fully executed Intercompany
Assignment Agreement together with evidence that on the Closing Date all of the
assignments set forth therein shall be consummated.
 
6.2           Conditions Precedent to All Credit Extensions.  Agent, Issuing
Bank and Lenders shall not be required to fund any Revolver Loans, arrange for
issuance of any Letters of Credit or grant any other accommodation to or for the
benefit of Borrowers, unless the following conditions are satisfied:
 
(a)           No Default or Event of Default shall exist at the time of, or
result from, such funding, issuance or grant;
 
(b)           The representations and warranties of each Obligor in the Loan
Documents shall be true and correct on the date of, and upon giving effect to,
such funding, issuance or grant (except for representations and warranties that
expressly relate to an earlier date);
 
(c)           All conditions precedent in any other Loan Document shall be
satisfied;
 
(d)           No event shall have occurred or circumstance exist that has or
could reasonably be expected to have a Material Adverse Effect;
 
(e)           With respect to issuance of a Letter of Credit, the LC Conditions
shall be satisfied; and
 
(f)           After giving effect to the funding of any Revolver Loan, issuance
of any Letters of Credit or granting of any other accommodation to or for the
benefit of the Borrowers, Borrowing Availability shall be in an amount greater
than zero.
 
Each request (or deemed request) by Borrowers for funding of a Revolver Loan,
issuance of a Letter of Credit or grant of an accommodation shall constitute a
representation by Borrowers that the foregoing conditions are satisfied on the
date of such request and on the date of such funding, issuance or grant.  As an
additional condition to any funding, issuance or grant, Agent shall have
received such other information, documents, instruments and agreements as it
deems appropriate in connection therewith.
 
6.3           Conditions Subsequent.  Borrowers shall deliver each of the
following within the specified time period:
 
6.3.1           Within 60 days after the Closing Date, Borrowers shall deliver
to Agent the Related Real Estate Documents for all Real Estate listed on
Schedule 7.3.
 
SECTION 7.     COLLATERAL
 
7.1           Grant of Security Interest.  To secure the prompt payment and
performance of all Obligations, each Borrower hereby grants to Agent, for the
benefit of Secured Parties, a continuing security interest in and Lien upon all
Property of such Borrower, including all of the following Property, whether now
owned or hereafter acquired, and wherever located:
 
 
 
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(a)           all Contracts;
 
(b)           all Accounts including Credit Card Accounts;
 
(c)           all Chattel Paper, including electronic chattel paper;
 
(d)           all Commercial Tort Claims, including those shown on Schedule
9.1.16;
 
(e)           all Deposit Accounts;
 
(f)           all Documents;
 
(g)           all General Intangibles, including Intellectual Property;
 
(h)           all Goods, including Inventory, Equipment and fixtures;
 
(i)           all Instruments;
 
(j)           all Investment Property, including the Equity Interests of each
Borrower in its Subsidiaries set forth on Schedule 7.1(j);
 
(k)           all Letter-of-Credit Rights;
 
(l)           all Supporting Obligations;
 
(m)           all monies, whether or not in the possession or under the control
of Agent, a Lender, or a bailee or Affiliate of Agent or a Lender, including any
Cash Collateral;
 
(n)           all accessions to, substitutions for, and all replacements,
products, and cash and non-cash proceeds of the foregoing, including proceeds of
and unearned premiums with respect to insurance policies, and claims against any
Person for loss, damage or destruction of any Collateral; and
 
(o)           all books and records (including customer lists, files,
correspondence, tapes, computer programs, print-outs and computer records)
pertaining to the foregoing.
 
No Contracts or its related security shall be released from Agent’s security
interest to become a Securitized Contract unless and until Agent executes a
release releasing such Contract from Agent’s security interest.  If a
Securitized Contract is transferred from a Securitization Subsidiary back to a
Borrower, it shall cease being a Securitized Contract upon such transfer back
and, together with its related security shall again constitute Collateral
hereunder.
 
7.2           Lien on Deposit Accounts; Cash Collateral.
 
7.2.1           Deposit Accounts.  To further secure the prompt payment and
performance of all Obligations, each Borrower hereby grants to Agent, for the
benefit of Secured Parties, a continuing security interest in and Lien upon all
amounts credited to any Deposit Account of such Borrower, including any sums in
any blocked or lockbox accounts (if any) or in any accounts into which such sums
are swept.  Each Borrower authorizes and directs
 
 
 
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each bank or other depository to deliver to Agent, and each Deposit Account
Control Agreement shall require such bank or other depository to deliver to
Agent, on a daily basis during a Dominion Trigger Period, all balances in each
Deposit Account maintained by such Borrower with such depository for application
to the Obligations then outstanding.  Each Borrower irrevocably appoints Agent
as such Borrower’s attorney-in-fact to collect such balances to the extent any
such delivery is not so made.
 
7.2.2           Cash Collateral.  At the request of Borrower Agent, any Cash
Collateral shall be invested, at Agent’s discretion, in Cash Equivalents, but
Agent shall have no responsibility for any investment or loss.  Each Borrower
hereby grants to Agent, for the benefit of Secured Parties, a security interest
in all Cash Collateral held from time to time and all proceeds thereof, as
security for the Obligations, whether such Cash Collateral is held in a Cash
Collateral Account or elsewhere.  Agent may apply Cash Collateral to the payment
of any Obligations, in such order as Agent may elect, as they become due and
payable.  Each Cash Collateral Account and all Cash Collateral shall be under
the sole dominion and control of Agent.  No Borrower or other Person claiming
through or on behalf of any Borrower shall have any right to any Cash
Collateral, until Full Payment of all Obligations.
 
7.3           Real Estate Collateral.
 
7.3.1           Lien on Real Estate.  Subject to Section 6.3, the Obligations
shall also be secured by Mortgages upon the Real Estate listed on Schedule
7.3.  The Mortgages shall be duly recorded, at Borrowers’ expense, in each
office where such recording is required to constitute a valid, secured Lien on
the Real Estate covered thereby.  If any Borrower acquires Real Estate
hereafter, Borrowers shall, within 30 days, execute, deliver and record a
Mortgage sufficient to create a valid, secured Lien in favor of Agent on such
Real Estate, and shall deliver all Related Real Estate Documents.
 
7.3.2           Collateral Assignment of Leases.  To further secure the prompt
payment and performance of all Obligations, each Borrower hereby transfers and
assigns to Agent, for the benefit of Secured Parties, all of such Borrower’s
right, title and interest in, to and under all now or hereafter existing leases
of real Property to which such Borrower is a party, whether as lessor or lessee,
and all extensions, renewals, modifications and proceeds thereof.
 
7.3.3           Real Estate Collateral.  Borrowers have delivered to Agent fully
executed Leasehold Mortgages upon all leased Real Estate of Borrowers identified
in Schedule 1.1L.  Agent shall hold such Leasehold Mortgages, and Agent and each
Borrower agree that the Leasehold Mortgages will not create a valid Lien in
favor of Agent until the Leasehold Mortgage is recorded as set forth below.  If
any Borrower acquires a leasehold interest in Real Estate hereafter, Borrowers
shall, upon acquiring such interest and upon Agent’s request, agree to use
commercially reasonable efforts to obtain a Leasehold Mortgage Consent from each
landlord for each such new leased Real Estate, and if such consent is obtained,
execute and deliver a Leasehold Mortgage sufficient to create a Lien in favor of
Agent on such Real Estate.  Agent and such Borrower agree that any such
Leasehold Mortgage shall not create a valid Lien in favor of Agent until the
Leasehold Mortgage is recorded as set forth below.  At any time (i) Availability
is less than $30,000,000, or (ii) an Event of Default exists, at the option of
Agent the Leasehold Mortgages shall be duly recorded, at Borrowers’ expense, in
each office where such recording is required to provide notice to third party’s
of Agent’s Lien on the Real Estate covered thereby.
 
 
 
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7.4           Other Collateral.
 
7.4.1           Commercial Tort Claims.  Borrowers shall (i) promptly notify
Agent in writing if any Borrower has a Commercial Tort Claim (other than, as
long as no Default or Event of Default exists, a Commercial Tort Claim for less
than $500,000), (ii) promptly amend Schedule 9.1.16 to include such claim, and
(iii) take such actions as Agent deems appropriate to subject such claim to a
duly perfected, first priority Lien in favor of Agent (for the benefit of
Secured Parties).
 
7.4.2           Certain After-Acquired Collateral.  Borrowers shall promptly
notify Agent in writing if, after the Closing Date, any Borrower obtains any
interest in any Collateral consisting of Deposit Accounts, Chattel Paper,
Documents, Instruments, Intellectual Property, Investment Property or
Letter-of-Credit Rights and, upon Agent’s request, shall promptly take such
actions as Agent deems appropriate to effect Agent’s duly perfected, first
priority Lien upon such Collateral, including obtaining any appropriate
possession, control agreement or Lien Waiver.  If any Collateral is in the
possession of a third party, at Agent’s request, Borrowers shall obtain an
acknowledgment that such third party holds the Collateral for the benefit of
Agent.
 
7.5           No Assumption of Liability.  The Lien on Collateral granted
hereunder is given as security only and shall not subject Agent or any Lender
to, or in any way modify, any obligation or liability of Borrowers relating to
any Collateral.
 
7.6           Further Assurances.  Promptly upon request, Borrowers shall
deliver such instruments, assignments, title certificates, or other documents or
agreements, and shall take such actions, as Agent deems appropriate under
Applicable Law to evidence or perfect its Lien on any Collateral, or otherwise
to give effect to the intent of this Agreement.  Each Borrower authorizes Agent
to file any financing statement that indicates the Collateral as “all assets” or
“all personal property” of such Borrower, or words to similar effect, and
ratifies any action taken by Agent before the Closing Date to effect or perfect
its Lien on any Collateral.
 
7.7           Foreign Subsidiary Stock.  Notwithstanding Section 7.1, the
Collateral shall include only 65% of the voting stock of any Foreign Subsidiary.
 
7.8           Contract Legend.
 
7.8.1           New Contracts.  Borrowers shall immediately following the
execution or receipt of a Contract stamp or type in on the Contract the
following:
 
This instrument or agreement is assigned as collateral to Bank of America, N.A.
 
Provided, that so long as any obligations under the Term Loan Facility remain
outstanding, such legend may include a reference to the Lien in favor of Term
Agent.
 
7.8.2           Assigned Contracts.  Notwithstanding the above, Borrowers shall
cause each of the Contracts assigned to a Borrower pursuant to the Intercompany
Assignment Agreement to include the above legend within 30 days after the
Closing Date.
 
 
 
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SECTION 8.      COLLATERAL ADMINISTRATION
 
8.1           Collateral Reports.  By the 15th day of each month and at such
other times as Agent may request, Borrowers shall deliver to Agent (and Agent
shall promptly deliver same to Lenders) (i) a Borrowing Base Certificate
prepared as of the close of business of the previous month (provided that the
NOLV Percentage to be applied to the Value of Eligible Inventory and the
appraisal percentage used to determine the value of Gross Contract Payments
shall be the applicable NOLV Percentage or appraisal percentage, as applicable,
set forth in the most recent appraisal delivered to Agent for (x) the month in
which the Borrowing Base Certificate is delivered or (y) the immediately
succeeding month during such period of such immediately succeeding month pending
delivery of a new Borrowing Base Certificate) (provided, that Borrowing Base
Certificates shall be delivered weekly during a Increased Reporting Period;
provided further, that the calculation of contracts not qualifying as Eligible
Contracts, the CAI Availability Reserve and CCI Availability Reserve shall be
provided by Borrower on a monthly basis at all times), (ii) an aggregate list of
Borrowers’ Contracts, aged in 30 days contractual delinquency intervals and
separately identifying the revolving Contracts; (iii) a calculation of the Past
Due Percent, the Cash Recovery Percent, Collateral Adjustment Percentage, the
Charge-Off Percent; the Eligible Contracts, the Eligible Inventory, the Eligible
Credit Card Accounts; (iv) an Inventory turn report of Borrowers’ Inventory; (v)
a listing of each Borrower’s Inventory by location, specifying the amount of
Inventory at each location; (vi) the summary balances of Borrowers’ “primary
portfolio” and “secondary portfolio” (as such portfolios are described in
Parent’s SEC filings) and delinquent balances of each such portfolio; (vii) such
other reports as to the Collateral of Borrower as Agent shall reasonably request
from time to time, together with a reconciliation to the general ledger; and
(viii) a certificate of an officer of Borrower Agent certifying as to the
accuracy and completeness of the foregoing.  All calculations of Availability in
any Borrowing Base Certificate shall originally be made by Borrowers and
certified by a Senior Officer, provided that Agent may from time to time review
and adjust any such calculation (a) to reflect its reasonable estimate of
declines in value of any Collateral, due to collections received in the Dominion
Account or otherwise; (b) to adjust advance rates to reflect changes in
dilution, quality, mix and other factors affecting Collateral; and (c) to the
extent the calculation is not made in accordance with this Agreement or does not
accurately reflect the CAI Availability Reserve or CCI Availability Reserve.
 
8.2           Administration of Contracts.
 
8.2.1           Contracts.
 
(a)           Borrowers hereby represent and warrant to Agent and Lenders with
respect to the Contracts, that:  (i) each existing Contract represents, and each
future Contract will represent, a bona fide obligation of the Contract Debtor,
enforceable in accordance with its terms; (ii) each existing Contract is, and
each future Contract will be, for a liquidated amount payable by the Contract
Debtor thereon on the terms set forth in the Contract therefor or in the
schedule thereof delivered to Agent, without any offset, deduction, defense
(including the defense of usury), or counterclaim; (iii) there is only one
original counterpart of the Contract executed by the Contract Debtor and any
copies of such original are clearly marked as copies; (iv) each Contract
correctly sets forth the terms thereof, including the interest rate, if any,
applicable thereto and correctly describes the collateral, if any, for such
Contract; (vi) the signatures of all Contract Debtors are genuine and, to the
knowledge of Borrowers, each Contract Debtor had the legal capacity to enter
into and execute such documents on the date thereof; (vii) each Contract
complies with all Requirement of Law; and (viii) Borrowers have not used
illegal, improper, fraudulent or deceptive marketing techniques or unfair
business practices with respect to the Contracts.
 
 
 
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(b)           Borrowers shall not grant any discount, credit or allowance to any
such Contract Debtor without Agent’s prior written consent, except for
discounts, credits and allowances made or given in the Ordinary Course of
Business or in compliance with the Credit and Collection Guidelines.
 
(c)           Except as provided in Borrowers’ Credit and Collection Guidelines,
Borrowers shall not accept any note or other instrument (except a check or other
instrument for the immediate payment of money) with respect to any Contract
without Agent’s written consent.  If Agent consents to the acceptance of any
such instrument, it shall be considered as evidence of the Contract and not
payment thereof and Borrowers will promptly deliver such instrument to Agent,
endorsed by the applicable Borrower to Agent in a manner satisfactory in form
and substance to Agent.  Regardless of the form of presentment, demand, notice
of protest with respect thereto, the Contract Debtor shall remain liable thereon
until such Instrument is paid in full.
 
(d)           Agent may rely, in determining which Contracts are Eligible
Contracts, on all statements and representations made by Borrowers with respect
thereto.
 
(e)           Except as provided in the Credit and Collections Guidelines with
respect to Modified Contracts, Borrowers shall not amend or modify any Contract
without Agent’s prior written consent and any such modifications to the
applicable Contract are identified as approved modifications.
 
(f)           Borrowers shall hold each original Contract as the custodian for
Agent for the purposes of perfecting Agent’s Lien in the Contracts.
 
(g)           If the original of any Contract is in print format, Borrowers
shall keep such Contract in a fireproof file cabinet at Borrowers’ chief
executive office (unless delivered to Agent hereunder) and if the original
Contract is in electronic format, Borrowers shall keep an electronic version on
their computer systems in their chief executive office and with backup copies
kept in location other than the chief executive office.
 
8.2.2           Taxes.  If any collections received from payments made by
Contract Debtors includes charges for any Taxes, Agent is authorized, in its
discretion, to pay the amount thereof to the proper taxing authority for the
account of such Borrower and to charge Borrowers therefor; provided, however,
that neither Agent nor Lenders shall be liable for any Taxes that may be due
from Borrowers or with respect to any Collateral.
 
8.2.3           Contract Verification.  Whether or not a Default or Event of
Default exists, Agent shall have the right at any time, in the name of Agent,
any designee of Agent or any Borrower, to verify the validity, amount or any
other matter relating to any Contracts by mail, telephone or
otherwise.  Borrowers shall cooperate fully with Agent in an effort to
facilitate and promptly conclude any such verification process.
 
8.2.4           Maintenance of Dominion Account.  Borrowers shall maintain
Dominion Accounts pursuant to lockbox or other arrangements acceptable to
Agent.  Borrowers shall obtain an agreement (in form and substance satisfactory
to Agent) from each lockbox servicer (if any) and Dominion Account bank,
establishing Agent’s control over and Lien in the lockbox (if any) or Dominion
Account, which may be exercised by Agent during any
 
 
 
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Dominion Trigger Period, requiring immediate deposit of all remittances received
in the lockbox (if any) to a Dominion Account, and waiving offset rights of such
servicer or bank, except for customary administrative charges.  If a Dominion
Account is not maintained with Bank of America, Agent may, during any Dominion
Trigger Period, require immediate transfer of all funds in such account to a
Dominion Account maintained with Bank of America.  Agent and Lenders assume no
responsibility to Borrowers for any lockbox arrangement (if any) or Dominion
Account, including any claim of accord and satisfaction or release with respect
to any Payment Items accepted by any bank.
 
8.2.5           Proceeds of Collateral.  Borrowers shall request in writing and
otherwise take all necessary steps to ensure that all payments on Contracts or
otherwise relating to Collateral are made directly to a Dominion Account (or a
lockbox relating to a Dominion Account, if any).  If any Borrower or its
Subsidiary receives cash or Payment Items with respect to any Collateral, it
shall hold same in trust for Agent and promptly (not later than the next
Business Day) deposit same into a Dominion Account; provided, that payments on
Securitization Contracts sold to the Securitization Subsidiary pursuant to the
Permitted ABS Purchase Agreement may be remitted to and held by the
Securitization Subsidiary and not subject to the requirements set forth above.
 
8.3           Administration of Inventory.
 
8.3.1           Records and Reports of Inventory.  Each Borrower shall keep
accurate and complete records of its Inventory, including costs and daily
withdrawals and additions, and shall submit to Agent inventory and
reconciliation reports in form satisfactory to Agent, on such periodic basis as
Agent may request.  Each Borrower shall conduct a physical inventory at each of
its locations at least once per calendar year (and on a more frequent basis if
requested by Agent when an Event of Default exists) and periodic cycle counts
consistent with historical practices, and shall provide to Agent a report based
on each such inventory and count promptly upon completion thereof, together with
such supporting information as Agent may request.  Agent may participate in and
observe each physical count.
 
8.3.2           Returns of Inventory.  No Borrower shall return any Inventory to
a supplier, vendor or other Person, whether for cash, credit or otherwise,
unless (a) such return is in the Ordinary Course of Business; (b) no Default,
Event of Default or Overadvance exists or would result therefrom; (c) Agent is
promptly notified if the aggregate Value of all Inventory returned in any month
exceeds $2,500,000; and (d) any payment received by a Borrower in excess of the
aggregate amount of $2,500,000 in any month for a return is promptly remitted to
Agent for application to the Obligations.
 
8.3.3           Acquisition, Sale and Maintenance.  No Borrower shall acquire or
accept any Inventory on consignment or approval (other than in the Ordinary
Course of Business), and shall take all reasonable steps to assure that all
Inventory is produced in accordance with Applicable Law. To the best of
Borrowers’ knowledge, all of each Borrower’s Inventory is produced in accordance
with the FLSA.  No Borrower shall sell any Inventory on consignment or approval
or any other basis under which the customer may return or require a Borrower to
repurchase such Inventory.  Borrowers shall use, store and maintain all
Inventory with reasonable care and caution, in accordance with applicable
standards of any insurance and in conformity with all Applicable Law, and shall
make current rent payments (within applicable grace periods provided for in
leases) at all locations where any Collateral is located.
 
 
 
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8.4           Administration of Equipment.
 
8.4.1           Records and Schedules of Equipment.  Each Borrower shall keep
accurate and complete records of its Equipment, including kind, quality,
quantity, cost, acquisitions and dispositions thereof, and shall submit to
Agent, on such periodic basis as Agent may request, a current schedule thereof,
in form satisfactory to Agent.  Promptly upon request, Borrowers shall deliver
to Agent evidence of their ownership or interests in any Equipment.
 
8.4.2           Dispositions of Equipment.  No Borrower shall sell, lease or
otherwise dispose of any Equipment, without the prior written consent of Agent
and Required Lenders, other than (a) a Permitted Asset Disposition; and (b)
replacement of Equipment that is worn, damaged or obsolete with Equipment of
like function and value, if the replacement Equipment is acquired substantially
contemporaneously with such disposition and is free of Liens other than
Permitted Liens.
 
8.4.3           Condition of Equipment.  The Equipment is in good operating
condition and repair, and all necessary replacements and repairs have been made
so that the value and operating efficiency of the Equipment is preserved at all
times, reasonable wear and tear excepted.  Each Borrower shall ensure that the
Equipment is mechanically and structurally sound, and capable of performing the
functions for which it was designed, in accordance with manufacturer
specifications.  No Borrower shall permit any Equipment to become affixed to
real Property unless any landlord or mortgagee delivers a Lien Waiver or an
appropriate Rent and Charges Reserve has been established with respect thereto.
 
8.5           Administration of Deposit Accounts.  Schedule 8.5 sets forth all
Deposit Accounts maintained by Borrowers, including all Dominion Accounts.  Each
Borrower shall take all actions necessary to establish Agent’s control of each
such Deposit Account (other than an account exclusively used for payroll,
payroll taxes or employee benefits, or an account containing not more than
$10,000 at any time).  Each Borrower shall be the sole account holder of each
Deposit Account and shall not allow any other Person (other than Agent or Term
Agent) to have control over a Deposit Account or any Property deposited
therein.  Each Borrower shall promptly notify Agent of any opening or closing of
a Deposit Account and, with the consent of Agent, will amend Schedule 8.5 to
reflect same.
 
8.6           Administration of Credit Card Accounts.
 
8.6.1           Credit Card Agreements.  Schedule 8.6.1 is a list of all Credit
Card Agreements as of the Closing Date.
 
8.6.2           Credit Card Processor Notifications.  Each Borrower shall
deliver to Agent copies of Credit Card Processor Notifications which have been
executed on behalf of such Borrower and delivered to such Borrower’s Credit Card
Issuers and Credit Card Processors. Each Credit Card Processor Notification
shall require the ACH or wire transfer no less frequently than daily to a
Dominion Account of all payments due from Credit Card Processors or Credit Card
Issuers.
 
 
 
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8.7           General Provisions.
 
8.7.1           Location of Collateral.  All tangible items of Collateral, other
than Inventory in transit, shall at all times be kept by Borrowers at the
business locations set forth in Schedule 8.7.1, except that Borrowers may (a)
make sales or other dispositions of Collateral in accordance with Section
10.2.6; and (b) move Collateral to another location in the United States, upon
30 Business Days prior written notice to Agent.
 
8.7.2           Insurance of Collateral; Condemnation Proceeds.
 
(a)           Each Borrower shall maintain insurance with respect to the
Collateral, covering casualty, hazard, theft, malicious mischief, flood and
other risks, in amounts, with endorsements and with insurers (with a Best Rating
of at least A7, unless otherwise approved by Agent) satisfactory to Agent.  All
proceeds under each policy shall be payable to Agent.  From time to time upon
request, Borrowers shall deliver to Agent the certified copies of its insurance
policies and updated flood plain searches.  Unless Agent shall agree otherwise,
each policy shall include satisfactory endorsements (i) showing Agent as loss
payee; (ii) requiring 30 days prior written notice to Agent in the event of
cancellation of the policy for any reason whatsoever, except 10 days notice
shall be given for cancellation due to non-payment of premium; and (iii)
specifying that the interest of Agent shall not be impaired or invalidated by
any act or neglect of any Borrower or the owner of the Property, nor by the
occupation of the premises for purposes more hazardous than are permitted by the
policy.  If any Borrower fails to provide and pay for any insurance, Agent may,
at its option, but shall not be required to, procure the insurance and charge
Borrowers therefor.  Each Borrower agrees to deliver to Agent, promptly as
rendered, copies of all claims reports made to insurance companies in excess of
$1,000,000.  While no Event of Default exists, Borrowers may settle, adjust or
compromise any insurance claim, as long as the proceeds are delivered to
Agent.  If an Event of Default exists, only Agent shall be authorized to settle,
adjust and compromise such claims.
 
(b)           Any proceeds of insurance (other than proceeds from workers’
compensation or D&O insurance) and any awards arising from condemnation of any
Collateral shall be paid to Agent and shall be deposited in the Dominion
Account.  Any such proceeds or awards that relate to Inventory shall be applied
to payment of the Revolver Loans, and if a Dominion Trigger Period exists, then
to any other Obligations outstanding.
 
(c)           If requested by Borrowers in writing within 15 days after Agent’s
receipt of any insurance proceeds or condemnation awards relating to any loss or
destruction of Equipment or Real Estate, Borrowers may use such proceeds or
awards to repair or replace such Equipment or Real Estate (and until so used,
the proceeds shall be held by Agent as Cash Collateral) as long as (i) no
Default or Event of Default exists; (ii) such repair or replacement is promptly
undertaken and concluded, in accordance with plans satisfactory to Agent; (iii)
replacement buildings are of comparable size, quality and utility to the
destroyed buildings; (iv) the repaired or replaced Property is free of Liens,
other than Permitted Liens that are not Purchase Money Liens; (v) Borrowers
comply with disbursement procedures for such repair or replacement as Agent may
reasonably require; and (vi) the aggregate amount of such proceeds or awards
from any single casualty or condemnation does not exceed $5,000,000.
 
 
 
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8.7.3           Protection of Collateral.  All expenses of protecting, storing,
warehousing, insuring, handling, maintaining and shipping any Collateral, all
Taxes payable with respect to any Collateral (including any sale thereof), and
all other payments required to be made by Agent to any Person to realize upon
any Collateral, shall be borne and paid by Borrowers.  Agent shall not be liable
or responsible in any way for the safekeeping of any Collateral, for any loss or
damage thereto (except for reasonable care in its custody while Collateral is in
Agent’s actual possession), for any diminution in the value thereof, or for any
act or default of any warehouseman, carrier, forwarding agency or other Person
whatsoever, but the same shall be at Borrowers’ sole risk.
 
8.7.4           Defense of Title to Collateral.  Each Borrower shall at all
times defend its title to Collateral and Agent’s Liens therein against all
Persons, claims and demands whatsoever, except Permitted Liens.
 
8.8           Power of Attorney.  Each Borrower hereby irrevocably constitutes
and appoints Agent (and all Persons designated by Agent) as such Borrower’s true
and lawful attorney (and agent-in-fact) for the purposes provided in this
Section.  Agent, or Agent’s designee, may, without notice and in either its or a
Borrower’s name, but at the cost and expense of Borrowers:
 
(a)           Endorse a Borrower’s name on any Payment Item or other proceeds of
Collateral (including proceeds of insurance) that come into Agent’s possession
or control; and
 
(b)           During an Event of Default, (i) notify any Contract Debtors of the
assignment of their Contracts, demand and enforce payments on Contracts, by
legal proceedings or otherwise, and generally exercise any rights and remedies
with respect to Contracts; (ii) settle, adjust, modify, compromise, discharge or
release any claims with respect to amounts due on Contracts or other Collateral,
or any legal proceedings brought to collect on Contracts or other Collateral;
(iii) sell or assign any Contract and other Collateral upon such terms, for such
amounts and at such times as Agent deems advisable; (iv) collect, liquidate, and
receive balances in Deposit Accounts or investment accounts, and take control,
in any manner, of proceeds of Collateral; (v) prepare, file and sign a
Borrower’s name to a proof of claim or other document in a bankruptcy of a
Contract Debtor, or to any notice, assignment or satisfaction of Lien or similar
document; (vi) receive, open and dispose of mail addressed to a Borrower, and
notify postal authorities to deliver any such mail to an address designated by
Agent; (vii) endorse any Chattel Paper, Document, Instrument, bill of lading, or
other document or agreement relating to any Contract, Inventory or other
Collateral; (viii) use a Borrower’s stationery and sign its name to
verifications of Contract and notices to Contract Debtors; (ix) use information
contained in any data processing, electronic, or other information systems
relating to Collateral; (x) make and adjust claims under insurance policies;
(xi) take any action as may be necessary or appropriate to obtain payment under
any letter of credit, banker’s acceptance or other instrument for which a
Borrower is a beneficiary; and (xii) take all other actions as Agent deems
appropriate to fulfill any Borrower’s obligations under the Loan Documents.
 
SECTION 9.      REPRESENTATIONS AND WARRANTIES
 
9.1           General Representations and Warranties.  To induce Agent and
Lenders to enter into this Agreement and to make available the Revolver
Commitments, Revolver Loans and Letters of Credit, Parent and each Borrower
represents and warrants that:
 
9.1.1           Organization and Qualification.  Parent and its Subsidiaries are
duly organized, validly existing and in good standing under the laws of the
jurisdiction of their organization.  Parent and its Subsidiaries are duly
qualified, authorized to do business and in good standing as a foreign
corporation in each jurisdiction where failure to be so qualified could
reasonably be expected to have a Material Adverse Effect.
 
 
 
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9.1.2           Power and Authority.  Each Obligor is duly authorized to
execute, deliver and perform its Loan Documents.  The execution, delivery and
performance of the Loan Documents have been duly authorized by all necessary
action, and do not (a) require any consent or approval of any holders of Equity
Interests of any Obligor, other than those already obtained; (b) contravene the
Organic Documents of any Obligor; (c) violate or cause a default under any
Applicable Law or Material Contract; or (d) result in or require the imposition
of any Lien (other than Permitted Liens) on any Property of any Obligor.
 
9.1.3           Enforceability.  Each Loan Document is a legal, valid and
binding obligation of each Obligor party thereto, enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors’ rights generally.
 
9.1.4           Capital Structure.  Schedule 9.1.4 shows, for each of Parent and
its Subsidiaries, its name, its jurisdiction of organization, its authorized and
issued Equity Interests, the holders of its Equity Interests, and all agreements
binding on such holders with respect to their Equity Interests.  Except as
disclosed on Schedule 9.1.4, in the five years preceding the Closing Date,
neither Parent nor any Subsidiary has acquired any substantial assets from any
other Person nor has been the surviving entity in a merger or
combination.  Parent has good title to its Equity Interests in its Subsidiaries,
subject only to Agent’s Lien and Term Agent’s Lien, and all such Equity
Interests are duly issued, fully paid and non-assessable.  Except as set forth
in Schedule 9.1.4, there are no outstanding purchase options, warrants,
subscription rights, agreements to issue or sell, convertible interests, phantom
rights or powers of attorney relating to Equity Interests of Parent or its
Subsidiary.
 
9.1.5           Corporate Names; Locations.  During the five years preceding the
Closing Date, except as shown on Schedule 9.1.5, neither Parent nor its
Subsidiary has been known as or used any corporate, fictitious or trade names,
has been the surviving corporation of a merger or combination, or has acquired
any substantial part of the assets of any Person.  The chief executive offices
and other places of business of Parent and its Subsidiaries are shown on
Schedule 8.7.1.  During the five years preceding the Closing Date, no Borrower
or its Subsidiary has had any other office or place of business.
 
9.1.6           Title to Properties; Priority of Liens.  Each of Parent and its
subsidiaries has good and marketable title to (or valid leasehold interests in)
all of its Real Estate, and good title to all of its personal Property,
including all Property reflected in any financial statements delivered to Agent
or Lenders, in each case free of Liens except Permitted Liens and minor defects
in title to its Real Estate that do not interfere with its ability to conduct
its business as currently conducted or to utilize such properties for their
intended purpose.  Each of Parent and its Subsidiaries has paid and discharged
all lawful claims that, if unpaid, could become a Lien on its Properties, other
than Permitted Liens.  All Liens of Agent in the Collateral are duly perfected,
first priority Liens, subject only to Permitted Liens that are expressly allowed
to have priority over Agent’s Liens.
 
9.1.7           Financial Statements.  The consolidated and consolidating
balance sheets, and related statements of income, cash flow and shareholder’s
equity, of Parent and its Subsidiaries that have been and are hereafter
delivered to Agent and Lenders, are prepared in accordance with GAAP, and fairly
present the financial positions and results of operations of Parent and its
Subsidiaries at the dates and for the periods indicated.  All
 
 
 
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projections delivered from time to time to Agent and Lenders have been prepared
in good faith, based on reasonable assumptions in light of the circumstances at
such time.  Since July 31, 2010, there has been no change in the condition,
financial or otherwise, of Parent or any of its Subsidiaries (when taken as a
whole) that could reasonably be expected to have a Material Adverse Effect.  No
financial statement delivered to Agent or Lenders at any time contains any
untrue statement of a material fact, nor fails to disclose any material fact
necessary to make such statement not materially misleading.  Each Borrower and
its Subsidiaries are Solvent.
 
9.1.8           Surety Obligations.  Neither Parent nor any of its Subsidiaries
are obligated as surety or indemnitor under any bond or other contract that
assures payment or performance of any obligation of any Person, except as
permitted hereunder.
 
9.1.9           Taxes.  Parent and each of its Subsidiaries have filed all
federal, state and local tax returns and other reports that it is required by
law to file, and has paid, or made provision for the payment of, all Taxes upon
it, its income and its Properties that are due and payable, except to the extent
being Properly Contested.  The provision for Taxes on the books of each Parent
and its Subsidiaries is adequate for all years not closed by applicable
statutes, and for its current Fiscal Year.
 
9.1.10           Brokers.  There are no brokerage commissions, finder’s fees or
investment banking fees payable in connection with any transactions contemplated
by the Loan Documents.
 
9.1.11           Intellectual Property.  Each of Parent and its Subsidiaries own
or has the lawful right to use all Intellectual Property necessary for the
conduct of its business, without conflict with any rights of others except for
any such conflict of infringement that, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.  There is no
pending or, to Parent’s or any Borrower’s knowledge, threatened Intellectual
Property Claim with respect to Parent, any of its Subsidiaries or any of their
Property (including any Intellectual Property).  Except as disclosed on Schedule
9.1.11, neither Parent nor its Subsidiaries pays or owes any Royalty or other
compensation to any Person with respect to any Intellectual Property.  All
Intellectual Property owned, used or licensed by, or otherwise subject to any
interests of, Parent or its Subsidiaries is shown on Schedule 9.1.11.
 
9.1.12           Governmental Approvals.  Each of Parent and its Subsidiaries
have, is in compliance with, and is in good standing with respect to, all
Governmental Approvals necessary to conduct its business and to own, lease and
operate its Properties.  To the best of each Borrowers’ knowledge, all necessary
import, export or other licenses, permits or certificates for the import or
handling of any goods or other Collateral have been procured and are in effect,
and Parent and its Subsidiaries have complied with all foreign and domestic laws
with respect to the shipment and importation of any goods or Collateral, except
where noncompliance could not reasonably be expected to have a Material Adverse
Effect.
 
9.1.13           Compliance with Laws.  Each of Parent and its Subsidiaries have
duly complied, and its Properties and business operations are in compliance, in
all material respects with all Applicable Law (including all consumer credit
disclosure laws and regulations), except where noncompliance could not
reasonably be expected to have a Material Adverse Effect.  There have been no
citations, notices or orders of material noncompliance issued to Parent or its
Subsidiaries under any Applicable Law.  To the best of Borrowers’ knowledge no
Inventory has been produced in violation of the FLSA.
 
 
 
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9.1.14           Compliance with Environmental Laws.  Except as disclosed on
Schedule 9.1.14, neither Parent’s nor its Subsidiary’s past or present
operations, Real Estate or other Properties are subject to any federal, state or
local investigation to determine whether any remedial action is needed to
address any environmental pollution, hazardous material or environmental
clean-up.  Neither Parent nor its Subsidiaries have received any Environmental
Notice.  Neither Parent nor its Subsidiaries have any contingent liability with
respect to any Environmental Release, environmental pollution or hazardous
material on any Real Estate now or previously owned, leased or operated by it.
 
9.1.15           Burdensome Contracts.  Neither Parent nor its Subsidiaries are
a party or subject to any contract, agreement or charter restriction that could
reasonably be expected to have a Material Adverse Effect.  Neither Parent nor
its Subsidiaries are party or subject to any Restrictive Agreement, except as
shown on Schedule 9.1.15.  No such Restrictive Agreement prohibits the
execution, delivery, or performance of any Loan Document by an Obligor.
 
9.1.16           Litigation.  Except as shown on Schedule 9.1.16, there are no
proceedings or investigations pending or, to Parent’s or any Borrower’s
knowledge, threatened against Parent or its Subsidiaries, or any of their
businesses, operations, Properties, prospects or conditions, that (a) relate to
any Loan Documents or transactions contemplated thereby; or (b) could reasonably
be expected to have a Material Adverse Effect if determined adversely to Parent
or its Subsidiaries.  Except as shown on such Schedule, no Obligor has a
Commercial Tort Claim (other than, as long as no Default or Event of Default
exists, a Commercial Tort Claim for less than $100,000).  Neither Parent nor its
Subsidiaries are in default with respect to any order, injunction or judgment of
any Governmental Authority.
 
9.1.17           No Defaults.  No event or circumstance has occurred or exists
that constitutes a Default or Event of Default.  Neither Parent nor its
Subsidiaries are in default, and no event or circumstance has occurred or exists
that with the passage of time or giving of notice would constitute a default,
under any Material Contract or in the payment of any Borrowed Money.  There is
no basis upon which any party (other than a Parent or its Subsidiaries) could
terminate a Material Contract prior to its scheduled termination date.
 
9.1.18           ERISA.  Except as disclosed on Schedule 9.1.18:
 
(a)           Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code, and other federal and state
laws.  Each Plan that is intended to qualify under Section 401(a) of the Code
has received a favorable determination letter from the IRS or an application for
such a letter is currently being processed by the IRS with respect thereto and,
to the knowledge of Parent and Borrowers, nothing has occurred which would
prevent, or cause the loss of, such qualification.  Each Obligor and ERISA
Affiliate has made all required contributions to each Plan subject to Section
412 of the Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.
 
(b)           There are no pending or, to the knowledge of Parent and Borrowers,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could reasonably be expected to have a Material
Adverse Effect.  There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted in or
could reasonably be expected to have a Material Adverse Effect.
 
 
 
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(c)           (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) no Obligor
or ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) no Obligor or ERISA
Affiliate has incurred, or reasonably expects to incur, any liability (and no
event has occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Section 4201 or 4243 of ERISA with respect
to a Multiemployer Plan; and (v) no Obligor or ERISA Affiliate has engaged in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
 
(d)           With respect to any Foreign Plan, (i) all employer and employee
contributions required by law or by the terms of the Foreign Plan have been
made, or, if applicable, accrued, in accordance with normal accounting
practices; (ii) the fair market value of the assets of each funded Foreign Plan,
the liability of each insurer for any Foreign Plan funded through insurance, or
the book reserve established for any Foreign Plan, together with any accrued
contributions, is sufficient to procure or provide for the accrued benefit
obligations with respect to all current and former participants in such Foreign
Plan according to the actuarial assumptions and valuations most recently used to
account for such obligations in accordance with applicable generally accepted
accounting principles; and (iii) it has been registered as required and has been
maintained in good standing with applicable regulatory authorities.
 
9.1.19           Trade Relations.  There exists no actual or threatened
termination, limitation or modification of any business relationship between
Parent or its Subsidiaries and any customer or supplier, or any group of
customers or suppliers, who individually or in the aggregate are material to the
business of Parent or its Subsidiaries.  There exists no condition or
circumstance that could reasonably be expected to impair the ability of Parent
or its Subsidiaries to conduct its business at any time hereafter in
substantially the same manner as conducted on the Closing Date.
 
9.1.20           Labor Relations.  Except as described on Schedule 9.1.20,
neither Parent nor its Subsidiaries are party to or bound by any collective
bargaining agreement, management agreement or consulting agreement.  There are
no material grievances, disputes or controversies with any union or other
organization of Parent or its Subsidiaries’ employees, or, to any Borrower’s
knowledge, any asserted or threatened strikes, work stoppages or demands for
collective bargaining.
 
9.1.21           Payable Practices.  Neither Parent nor its Subsidiaries shall
make any change in its historical accounts payable practices from those in
effect on the Closing Date other than any changes made in the Ordinary Course of
Business.
 
9.1.22           Not a Regulated Entity.  No Obligor is (a) an “investment
company” or a “person directly or indirectly controlled by or acting on behalf
of an investment company” within the meaning of the Investment Company Act of
1940; or (b) subject to regulation under the Federal Power Act, the Interstate
Commerce Act, any public utilities code or any other Applicable Law regarding
its authority to incur Debt.
 
 
 
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9.1.23           Margin Stock.  Neither Parent nor its Subsidiaries are engaged,
principally or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.  No Revolver
Loan proceeds or Letters of Credit will be used by Borrowers to purchase or
carry, or to reduce or refinance any Debt incurred to purchase or carry, any
Margin Stock or for any related purpose in any manner that would result in a
violation of Regulations T, U or X of the Board of Governors.
 
9.1.24           Excluded Subsidiaries.  At all times after the consummation of
the Intercompany Assignment Agreements the Excluded Subsidiaries shall conduct
no business and have no material assets.
 
9.2           Complete Disclosure.  No Loan Document contains any untrue
statement of a material fact, nor fails to disclose any material fact necessary
to make the statements contained therein not materially misleading.  There is no
fact or circumstance that any Obligor has failed to disclose to Agent in writing
that could reasonably be expected to have a Material Adverse Effect.
 
SECTION 10.      COVENANTS AND CONTINUING AGREEMENTS
 
10.1           Affirmative Covenants.  As long as any Revolver Commitments or
Obligations are outstanding, Parent and each Borrower shall, and shall cause
each of their Subsidiaries to:
 
10.1.1           Inspections; Appraisals.
 
(a)           Permit Agent from time to time, subject (except when a Default or
Event of Default exists) to reasonable notice and normal business hours, to
visit and inspect the Properties of any Parent or its Subsidiaries, inspect,
audit and make extracts from Parent’s or its Subsidiaries’ books and records,
and discuss with its officers, employees, agents, advisors and independent
accountants Parent’s or such Subsidiary’s business, financial condition, assets,
prospects and results of operations.  Lenders may participate in any such visit
or inspection, at their own expense.  Neither Agent nor any Lender shall have
any duty to Parent or any Borrower to make any inspection, nor to share any
results of any inspection, appraisal or report with Parent or any
Borrower.  Borrowers acknowledge that all inspections, appraisals and reports
are prepared by Agent and Lenders for their purposes, and Parent and Borrowers
shall not be entitled to rely upon them.
 
(b)           Reimburse Agent for all charges, costs and expenses of Agent in
connection with (i) examinations of any Obligor’s books and records or any other
financial or Collateral matters as Agent deems appropriate, up to 2 times per
Loan Year; and (ii) appraisals of Inventory up to 2 times per Loan Year (it
being understood that Agent shall require at least 2 examinations per year
pursuant to clause (i) above and at least 2 appraisals of Inventory per year
pursuant to clause (ii) above); provided, however, that if an examination or
appraisal is initiated during an Increased Reporting Period, all charges, costs
and expenses therefor shall be reimbursed by Borrowers without regard to such
limits.  Subject to and without limiting the foregoing, Parent and Borrowers
specifically agree to pay Agent’s then standard charges for each day that an
employee of Agent or its Affiliates is engaged in any examination activities,
and shall pay the standard charges of Agent’s internal appraisal group.  This
Section shall not be construed to limit Agent’s right to conduct examinations or
to obtain appraisals at any time in its discretion, nor to use third parties for
such purposes.
 
 
 
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10.1.2           Financial and Other Information.  Keep adequate records and
books of account with respect to its business activities, in which proper
entries are made in accordance with GAAP reflecting all financial transactions;
and furnish to Agent and Lenders (the documents required to be delivered
pursuant to clauses (a), (b) and (h) below shall be deemed to have been
delivered on the date on which such documents are posted on the Securities and
Exchange Commission’s website at www.sec.gov and Borrowers have given notice to
Agent of such posting):
 
(a)           as soon as available, and in any event no later than the earlier
of (i) the date Parent files its 10K with the Securities and Exchange
Commission, or (ii) 90 days after the close of each Fiscal Year, balance sheets
as of the end of such Fiscal Year and the related statements of income, cash
flow and shareholders’ equity for such Fiscal Year, on a consolidated basis for
Parent and its Subsidiaries, which consolidated statements shall be audited and
certified (without qualification) by a firm of independent certified public
accountants of recognized standing selected by Parent and acceptable to Agent,
and shall set forth in comparative form corresponding figures for the preceding
Fiscal Year and other information acceptable to Agent;
 
(b)           as soon as available, and in any event no later than the earlier
of (i) the date Parent files its 10Q with the Securities and Exchange
Commission, or (ii) 45 days after the end of each Fiscal Quarter, unaudited
balance sheets as of the end of such Fiscal Quarter and the related statements
of income and cash flow for such Fiscal Quarter and for the portion of the
Fiscal Year then elapsed, on a consolidated basis for Parent and its
Subsidiaries, setting forth in comparative form corresponding figures for the
preceding Fiscal Year and certified by the chief financial officer of Borrower
Agent as prepared in accordance with GAAP and fairly presenting the financial
position and results of operations for such Fiscal Quarter and period, subject
to normal year end adjustments and the absence of footnotes;
 
(c)           as soon as available, and in any event within 30 days after the
end of each month that is not the last month of a Fiscal Quarter, internal
management financial statements (balance sheet, statement of income, and cash
flow statement) as of the end of such month, on a consolidated basis for Parent
and its Subsidiaries, setting forth in comparative form corresponding figures
for (i) the preceding Fiscal Year and (ii) such period set forth in the
projections delivered pursuant to Section 10.1.2(f) hereof, in each case on a
month-to-date and year-to-date basis with respect to profit and loss and cash
flow statements, in each case certified by the chief financial officer of
Borrower Agent as prepared in accordance with its normal internal, interim
reporting practices;
 
(d)           within the time frame specified for the delivery of financial
statements under clauses (a)(ii), (b)(ii) and (c) above, or more frequently if
requested by Agent while a Default or Event of Default exists, a Compliance
Certificate executed by the chief financial officer or treasurer of Borrower
Agent;
 
(e)           not later than 30 days after receipt thereof by Borrowers, copies
of all management letters (if any) and other material reports submitted to
Borrowers by their accountants in connection with such financial statements, if
any;
 
(f)           not later than 30 days after the commencement of each Fiscal Year,
preliminary projections of Parent’s consolidated balance sheets, results of
operations, cash flow and Availability for such Fiscal Year, month by month, and
not later than 60 days after the commencement of each Fiscal Year, final
projections of Parent’s consolidated balance sheets, results of operations, cash
flow and Availability for such Fiscal Year, month by month, approved by the
Parent’s board of directors or other governing body;
 
 
 
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(g)           at Agent’s request, a listing of each Borrower’s trade payables,
specifying the trade creditor and balance due, and a detailed trade payable
aging, all in form satisfactory to Agent;
 
(h)           promptly after the sending or filing thereof, copies of any proxy
statements, financial statements or reports that Parent or any Borrower has made
generally available to its shareholders; copies of any regular, periodic and
special reports or registration statements or prospectuses that Parent or any
Borrower files with the Securities and Exchange Commission or any other
Governmental Authority, or any securities exchange; and copies of any press
releases or other statements made available by Parent or a Borrower to the
public concerning material changes to or developments in the business of Parent
or such Borrower;
 
(i)           promptly after the sending or filing thereof, copies of any annual
report to be filed in connection with each Plan or Foreign Plan;
 
(j)           as soon as available, and in any event no later than 45 days after
the end of each Fiscal Quarter, Borrower’s “data tape” in form and substance
reasonably satisfactory to Agent and Required Lenders; and
 
(k)           such other reports and information (financial or otherwise) as
Agent may reasonably request (at its reasonable discretion or at the reasonable
request of any Lender) from time to time in connection with any Collateral or
any Borrower’s, its Subsidiary’s or other Obligor’s financial condition or
business.
 
10.1.3           Notices.  Notify Agent and Lenders in writing, promptly after
Parent or a Borrower’s obtaining knowledge thereof, of any of the following that
affects an Obligor:  (a) the threat or commencement of any proceeding or
investigation, whether or not covered by insurance, if an adverse determination
could have a Material Adverse Effect; (b) any pending or threatened material
labor dispute, strike or walkout, or the expiration of any material labor
contract; (c) any default under or termination of a Material Contract; (d) the
existence of any Default or Event of Default; (e) any judgment in an amount
exceeding $1,000,000; (f) the assertion of any Intellectual Property Claim, if
an adverse resolution could have a Material Adverse Effect; (g) any violation or
asserted violation of any Applicable Law (including ERISA, OSHA, FLSA, or any
Environmental Laws), if an adverse resolution could have a Material Adverse
Effect; (h) any Environmental Release by an Obligor or on any Property owned,
leased or occupied by an Obligor; or receipt of any Environmental Notice; (i)
the occurrence of any material ERISA Event; (j) the discharge of or any
withdrawal or resignation by Borrowers’ independent accountants; (k) any opening
of a new office or place of business, at least 30 days prior to such opening;
(l) any default under the Term Loan Agreement or the Term Loan Documents, or (m)
together with the delivery of the subsequent Compliance Certificate, the filing
(or authorization by any Obligor to any party other than Agent for the filing
thereof) of any financing statement (including any amendment thereto or
continuation thereof), mortgage or other lien filing (including any federal U.S.
Copyright Office or U.S. Patent and Trademark Office intellectual property lien
filing).
 
10.1.4           Landlord and Storage Agreements.  Upon request, provide Agent
with copies of all existing agreements, and promptly after execution thereof
provide Agent with copies of all future agreements, between an Obligor and any
landlord, warehouseman, processor, shipper, bailee or other Person that owns any
premises at which any Collateral may be kept or that otherwise may possess or
handle any Collateral.
 
 
 
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10.1.5           Compliance with Laws.  Comply with all Applicable Laws,
including ERISA, Environmental Laws, FLSA, OSHA, Anti-Terrorism Laws, and laws
regarding collection and payment of Taxes, and maintain all Governmental
Approvals necessary to the ownership of its Properties or conduct of its
business, unless failure to comply (other than failure to comply with
Anti-Terrorism Laws) or maintain could not reasonably be expected to have a
Material Adverse Effect.  Without limiting the generality of the foregoing, if
any Environmental Release occurs at or on any Properties of Parent or its
Subsidiaries, it shall act promptly and diligently to investigate and report to
Agent and all appropriate Governmental Authorities the extent of, and to make
appropriate remedial action to eliminate, such Environmental Release, whether or
not directed to do so by any Governmental Authority.
 
10.1.6           Taxes.  Pay and discharge all Taxes prior to the date on which
they become delinquent or penalties attach, unless such Taxes are being Properly
Contested.
 
10.1.7           Insurance.  In addition to the insurance required hereunder
with respect to Collateral, maintain insurance with insurers (with a Best Rating
of at least A7, unless otherwise approved by Agent) satisfactory to Agent, with
respect to the Properties and business of Borrowers and its Subsidiaries of such
type (including product liability, workers’ compensation, larceny, embezzlement,
or other criminal misappropriation insurance), in such amounts, and with such
coverages and deductibles as are customary for companies similarly situated.
 
10.1.8           Licenses.  Keep each License affecting any Collateral
(including the manufacture, distribution or disposition of Inventory) or any
other material Property of Borrowers and its Subsidiaries in full force and
effect; promptly notify Agent of any proposed modification to any such License,
or entry into any new License, in each case at least 30 days prior to its
effective date; pay all Royalties when due; and notify Agent of any default or
breach asserted by any Person to have occurred under any License.
 
10.1.9           Future Subsidiaries.  Promptly notify Agent upon any Person
becoming a Subsidiary of Parent and, if such Person is neither a Foreign
Subsidiary nor a Securitization Subsidiary, cause it to guaranty the Obligations
in a manner satisfactory to Agent, and to execute and deliver such documents,
instruments and agreements and to take such other actions as Agent shall require
to evidence and perfect a Lien in favor of Agent (for the benefit of Secured
Parties) on all assets of such Person, including delivery of such legal
opinions, in form and substance satisfactory to Agent, as it shall deem
appropriate.
 
10.1.10                      [Reserved]
 
10.1.11                      Service Maintenance Plans.  To the extent that
Borrowers finance so-called “service maintenance plans,” Borrowers shall ensure
that the cost of such plans are disclosed to the Contract Debtors and such plans
are in compliance with all applicable consumer credit laws, including any and
all special insurance laws relating thereto.
 
 
 
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10.1.12                      Charge-Off Policy.  Borrowers shall establish and
implement, in a manner satisfactory to Agent, a policy for charging off the
unpaid balance of its delinquent Contracts as set forth in the Credit and
Collections Guidelines.  Borrowers shall not in any way modify such policy as in
effect on the Closing Date without providing 10 Business Days prior written
notice to Agent of such modification and, if such modification is a material
modification, obtaining Agent’s consent to such material modification, which
consent will not be unreasonably withheld.
 
10.1.13                      Loss Reserve.  Borrowers shall maintain, on a
consolidated basis, loss reserves at all times during the term of the Agreement
in amounts required to be maintained under GAAP.
 
10.1.14                      Dissolution of Excluded Subsidiaries.  Within 15
days after the Closing Date, Parent and Borrowers shall file all of the
necessary documents with the applicable Governmental Authority to cause each of
the Excluded Subsidiaries to be dissolved and shall deliver evidence of such
dissolution to Agent promptly after receipt thereof from such Governmental
Authority.  The Excluded Subsidiaries shall not hold any assets or conduct any
business after the Closing Date.
 
10.2           Negative Covenants.  As long as any Revolver Commitments or
Obligations are outstanding, Parent and each Borrower shall not, and shall not
permit any of its Subsidiaries to:
 
10.2.1           Permitted Debt.  Create, incur, guarantee or suffer to exist
any Debt, except:
 
(a)           the Obligations;
 
(b)           Subordinated Debt;
 
(c)           Permitted Purchase Money Debt;
 
(d)           Borrowed Money (other than the Obligations, the obligations under
the Term Loan Documents, Subordinated Debt and Permitted Purchase Money Debt),
but only to the extent outstanding on the Closing Date and not satisfied with
proceeds of the initial Revolver Loans;
 
(e)           Bank Product Debt;
 
(f)           Debt that is in existence when a Person becomes a Subsidiary of
Parent or that is secured by an asset when acquired by Parent or its
Subsidiaries, as long as such Debt was not incurred in contemplation of such
Person becoming a Subsidiary of Parent or such acquisition, and does not exceed
$15,000,000 in the aggregate at any time;
 
(g)           Permitted Contingent Obligations;
 
(h)           Debt owed to a Flooring Lender, provided that such Flooring Lender
has entered into a Flooring Intercreditor Agreement with respect to such Debt;
 
(i)           (x) Debt incurred for the acquisition of Real Estate by a Borrower
so long as the purchase price of such Real Estate does not exceed the fair
market value of the Real Estate at the time of its acquisition and the Debt
incurred in connection therewith does not exceed 100% of the purchase price of
such Real Estate, and (y) Debt secured solely by Real Estate owned by a Borrower
as of the Closing Date incurred to refinance a portion of the Term Loan
Facility; provided, that (i) the amount of Net Proceeds received by such
Borrower with respect to such Debt shall be not less than the amount advanced by
the Term Lenders under the Term Loan Borrowing Base with
 
 
 
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respect to any Real Estate listed on Schedule 7.3 being refinanced, (ii) the Net
Proceeds received by Borrowers with respect to such Debt to refinance any Real
Estate listed on Schedule 7.3 shall be applied to prepay the Term Loan in
accordance with Section 5.2.2 of the Term Loan Agreement (together with any
prepayment fee then due, if any, under Section 5.2.3 of the Term Loan
Agreement), and (iii) the Lien of the Mortgage held by Agent on such Real Estate
shall be subordinated to the Lien of the Lender holding such Debt; provided
further, that the aggregate outstanding Debt permitted under this subsection (i)
does not at any time exceed, excluding any advances under the Term Loan against
such Real Estate, (A) $10,000,000 plus (B) such additional amount incurred so
long as no Default or Event of Default has occurred and is continuing and
Availability on a pro forma basis after giving effect to the incurrence of such
Debt and on a projected basis for the six months following the incurrence of
such Debt is not less than $75,000,000, provided further, that once the
obligations under the Term Loan Facility are paid in full and the Term Loan
Facility is terminated, the only limitation on the amount of Debt permitted
under this subsection (i) shall be to require that Debt under this subsection
(i) not exceed $25,000,000 outstanding at any time.
 
(j)           Debt incurred under the Term Loan Facility and otherwise incurred
under the Term Loan Documents;
 
(k)           Refinancing Debt as long as each Refinancing Condition is
satisfied;
 
(l)           Debt incurred in connection with the purchase of Contracts and
related assets by CCI from CCCI as evidence by the CCCI Originator Notes;
 
(m)           Debt incurred in connection with the purchase of Contracts and
related assets by CCI from CAI as evidence by the CCI Originator Notes;
 
(n)           Permitted ABS Facility so long as prior to entering into such
facility Agent and Required Lenders have approved the structure and documents
related to such facility and the Permitted ABS Agent has entered into the
Permitted ABS Intercreditor Agreement;
 
(o)           Debt incurred under the Permitted ABS Originator Notes;
 
(p)           Debt incurred in connection with the purchase of Contracts and
related assets by CCI from an Exlcuded Subsidiary as evidenced by the CFII
Originator Note; and
 
(q)           Debt that is not included in any of the preceding clauses of this
Section, is not secured by a Lien and does not exceed $10,000,000 in the
aggregate at any time.
 
10.2.2           Permitted Liens.  Create or suffer to exist any Lien upon any
of its Property, except the following (collectively, “Permitted Liens”):
 
(a)           Liens in favor of Agent;
 
(b)           Purchase Money Liens securing Permitted Purchase Money Debt;
 
(c)           Liens for Taxes not yet due or being Properly Contested;
 
 
 
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(d)           statutory Liens (other than Liens for Taxes or imposed under
ERISA) arising in the Ordinary Course of Business, but only if (i) payment of
the obligations secured thereby is not yet due or is being Properly Contested,
and (ii) such Liens do not materially impair the value or use of the Property or
materially impair operation of the business of Parent or its Subsidiaries;
 
(e)           Liens incurred or deposits made in the Ordinary Course of Business
to secure the performance of tenders, bids, leases, contracts (except those
relating to Borrowed Money), statutory obligations and other similar
obligations, or arising as a result of progress payments under government
contracts, as long as such Liens are at all times junior to Agent’s Liens;
 
(f)           Liens arising in the Ordinary Course of Business that are subject
to Lien Waivers;
 
(g)           Liens arising by virtue of a judgment or judicial order against
Parent or its Subsidiaries, or any Property of Parent or its Subsidiaries, as
long as such Liens are (i) in existence for less than 20 consecutive days or
being Properly Contested, and (ii) at all times junior to Agent’s Liens;
 
(h)           easements, rights-of-way, restrictions, covenants or other
agreements of record, and other similar charges or encumbrances on Real Estate,
that do not secure any monetary obligation and do not interfere with the
Ordinary Course of Business;
 
(i)           normal and customary rights of setoff upon deposits in favor of
depository institutions, and Liens of a collecting bank on Payment Items in the
course of collection;
 
(j)           Liens in favor of a Flooring Lender so long as such Liens do not
attach to any assets of a Borrower other than the Inventory floored by such
Flooring Lender;
 
(k)           Liens securing only the Real Estate owned by a Borrower  to secure
Debt permitted under Section 10.2.1(i);
 
(l)           existing Liens shown on Schedule 10.2.2;
 
(m)           Liens on the Equity Interests of Parent which are held by Parent,
to the extent such Equity Interests are deemed to be Margin Stock;
 
(n)           Liens on the Securitized Contracts in favor of the Permitted ABS
Agent and subject to the Permitted ABS Intercreditor Agreement;
 
(o)           Liens (subject to the Intercreditor Agreement) in favor of Term
Agent securing the obligations under the Term Loan Documents and any Refinancing
Debt or Liens solely on Real Estate set forth on Schedule 7.3 in connection with
a refinancing of the Term Loan permitted pursuant to clause (i) of Section
10.2.1;
 
(p)           rights of CCI in the Contracts purchased from CCCI pursuant to the
CCI Receivables Purchase Agreement and evidenced by a UCC-1 Financing Statement
naming CCI as a secured party and CCCI as debtor; provided, that such rights are
an ownership right and not a Lien; and
 
 
 
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(q)           rights of CAI in the Contracts purchased from CCCI pursuant to the
CAI Receivables Purchase Agreement and evidenced by a UCC-1 Financing Statement
naming CAI as a secured party and CCCI as debtor; provided, that such rights are
an ownership right and not a Lien.
 
10.2.3           Capital Expenditures.  Make Capital Expenditures (net of any
net proceeds from the sale of any Borrower’s fixed assets) in excess of
$22,000,000 in the aggregate during any 12-month period, measured as at the end
of each Fiscal Quarter.
 
10.2.4           Distributions; Upstream Payments.  Declare or make any
Distributions, except Upstream Payments and Permitted Distributions; or create
or suffer to exist any encumbrance or restriction on the ability of a Subsidiary
of Parent to make any Upstream Payment, except for restrictions under the Loan
Documents, the Term Loan Documents, under Applicable Law or in effect on the
Closing Date as shown on Schedule 9.1.15.
 
10.2.5           Restricted Investments.  Make any Restricted Investment.
 
10.2.6           Disposition of Assets.  Make any Asset Disposition, except a
Permitted Asset Disposition, a disposition of Equipment under Section 8.4.2, a
transfer of Property by an Obligor of its Subsidiary to a Borrower, or a
disposition of Margin Stock by Parent.
 
10.2.7           Loans.  Make any loans or other advances of money to any
Person, except (a) advances to an officer or employee for salary, travel
expenses, commissions and similar items in the Ordinary Course of Business; (b)
prepaid expenses and extensions of trade credit made in the Ordinary Course of
Business; (c) deposits with financial institutions permitted hereunder; (d) as
long as no Default or Event of Default exists, intercompany loans by a Borrower
to another Borrower; (e) loans made by a Borrower to a Contract Debtor pursuant
to a Contract; (f) loans made under the CCI Originator Notes and CCCI Originator
Notes, and (g) loans made under the ABS Originator Notes.
 
10.2.8           Restrictions on Payment of Certain Debt.
 
(a)           Make any payments (whether voluntary or mandatory, or a
prepayment, redemption, repurchase, retirement, defeasance or acquisition) with
respect to (i) any Subordinated Debt, except regularly scheduled payments of
principal, interest and fees, but only to the extent permitted under any
subordination agreement relating to such Debt (and a Senior Officer of Borrower
Agent shall certify to Agent, not less than five Business Days prior to the date
of payment, that all conditions under such agreement have been satisfied); or
(ii) any Borrowed Money (other than the Obligations and obligations under the
Term Loan Documents) prior to its due date under the agreements evidencing such
Debt as in effect on the Closing Date (or as amended thereafter with the consent
of Agent and Required Lenders).
 
(b)           Make (1) any voluntary prepayment with respect to the Term Loan
(other than in connection with a refinancing permitted under Section 10.2.1),
unless in each case, immediately prior to and after giving effect to any such
voluntary prepayment (x) no Event of Default exists and (y) Availability exceeds
$60,000,000, or (2) any mandatory prepayment with respect to the Term Loan other
than those set forth in Section 5.2.2 of the Term Loan Agreement.
 
 
 
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10.2.9           Fundamental Changes.  Merge, combine or consolidate with any
Person, or liquidate, wind up its affairs or dissolve itself, in each case
whether in a single transaction or in a series of related transactions, except
for (x) mergers or consolidations of a wholly-owned Subsidiary with another
wholly-owned Subsidiary or into a Borrower and (y) dissolution of the Excluded
Subsidiaries; change its name or conduct business under any fictitious name;
change its tax, charter or other organizational identification number; or change
its form or state of organization.
 
10.2.10                      Subsidiaries.  Form or acquire any Subsidiary after
the Closing Date, except in accordance with Sections 10.1.9 and 10.2.5; or
permit any existing Subsidiary to issue any additional Equity Interests except
director’s qualifying shares.
 
10.2.11                      Organic Documents.  Amend, modify or otherwise
change any of its Organic Documents as in effect on the Closing Date except in
the Ordinary Course of Business and in a manner not adverse to Agent or Lenders.
 
10.2.12                      Tax Consolidation.  File or consent to the filing
of any consolidated income tax return with any Person other than Borrowers and
its Subsidiaries.
 
10.2.13                      Accounting Changes.  Make any material change in
accounting treatment or reporting practices, except as required by GAAP and in
accordance with Section 1.2; or change its Fiscal Year.
 
10.2.14                      Restrictive Agreements.  Become a party to any
Restrictive Agreement, except a Restrictive Agreement (a) in effect on the
Closing Date; (b) relating to secured Debt permitted hereunder, as long as the
restrictions apply only to collateral for such Debt; or (c) constituting
customary restrictions on assignment in leases and other contracts.
 
10.2.15                      Hedging Agreements.  Enter into any Hedging
Agreement, except to hedge risks arising in the Ordinary Course of Business and
not for speculative purposes.
 
10.2.16                      Conduct of Business.  Engage in any business, other
than its business as conducted on the Closing Date and any activities incidental
thereto.
 
10.2.17                      Affiliate Transactions.  Enter into or be party to
any transaction with an Affiliate, except (a) transactions contemplated by the
Loan Documents; (b) payment of reasonable compensation to officers and employees
for services actually rendered, and loans and advances permitted by Section
10.2.7; (c) payment of customary directors’ fees and indemnities; (d)
transactions solely among Borrowers; (e) transactions with Affiliates that were
consummated prior to the Closing Date, as shown on Schedule 10.2.17; (f)
transactions with Affiliates in the Ordinary Course of Business, upon fair and
reasonable terms fully disclosed to Agent and no less favorable than would be
obtained in a comparable arm’s-length transaction with a non-Affiliate; and (g)
entry into the Permitted ABS Purchase Agreement, the Contract Allocation
Agreement and Permitted ABS Originator Notes and all transactions contemplated
thereunder.
 
10.2.18                      Plans.  Become party to any Multiemployer Plan or
Foreign Plan, other than any in existence on the Closing Date.
 
10.2.19                      Amendments to Subordinated Debt/Term Loan
Documents.
 
 
 
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(a)           Amend, supplement or otherwise modify any document, instrument or
agreement relating to any Subordinated Debt, if, in each case, such modification
(a) increases the principal balance of such Debt, or increases any required
payment of principal or interest; (b) accelerates the date on which any
installment of principal or any interest is due, or adds any additional
redemption, put or prepayment provisions; (c) shortens the final maturity date
or otherwise accelerates amortization; (d) increases the interest rate;
(e) increases or adds any fees or charges; (f) modifies any covenant in a manner
or adds any representation, covenant or default that is more onerous or
restrictive in any material respect for Parent or its Subsidiaries, or that is
otherwise materially adverse to Parent, any of its Subsidiaries or Lenders; or
(g) results in the Obligations not being fully benefited by the subordination
provisions thereof.
 
(b)           Amend, supplement or otherwise modify any Term Loan Document,
except as set forth in the Intercreditor Agreement.
 
10.2.20                      Credit Card Agreements.  No Borrower shall enter
into any Credit Card Agreements other than the ones expressly contemplated in
Section 8.6.1.
 
10.2.21                      Amendment to Permitted ABS Documents.  Permit any
amendment, modification or other change in the Permitted ABS Documents or any
related instrument or agreement, if it results in any covenants, terms or
conditions that are more restrictive or burdensome for the Borrowers than those
in effect as of the date of this Agreement.  Borrowers shall promptly provide
written notice of any such amendments to the Agent.
 
10.3           Financial Covenants.  As long as any Revolver Commitments or
Obligations are outstanding, Parent shall, on a consolidated basis with its
Subsidiaries:
 
10.3.1           Minimum Fixed Charge Coverage Ratio.  Maintain a Fixed Charge
Coverage Ratio at least equal to 1.10:1.00 for the month ending October 31, 2010
and each month thereafter, in each case measured monthly as at the last day of
each month on a trailing twelve month basis; provided, that that the Fixed
Charge Coverage Ratio shall be determined quarterly, measured as of the last day
of each Fiscal Quarter for the most recently ended four Fiscal Quarters, after
all obligations under the Term Loan Facility have been terminated.
 
10.3.2           Maximum Leverage Ratio.  Maintain Leverage Ratio not greater
than 2.00:1.00 for the Fiscal Quarter ending October 31, 2010 and each Fiscal
Quarter thereafter, measured as of the last day of each Fiscal Quarter.
 
10.3.3           Minimum Availability.  Maintain Availability of not less than
$25,000,000 at all times; provided, that this financial covenant shall be
applicable only so long as any obligations under the Term Loan Facility remain
outstanding.
 
10.4           Curative Equity.
 
10.4.1           Subject to the limitations set forth in Section 10.4.6,
Borrowers may cure an Event of Default arising out of a breach of any of the
financial covenants set forth in Sections 10.3.1 and 10.3.2 (the “Specified
Financial Covenants”) (as the case may be) by way of an investment of Curative
Equity prior to the date on which the Compliance Certificate is delivered to
Agent pursuant to Section 10.1.2(d) in respect of the month or Fiscal Quarter
(as the case may be) with respect to which any such breach occurred; provided,
that Borrowers’ right to so cure an Event of Default shall be contingent on the
timely delivery of such Compliance Certificate as required under Section
10.1.2(d).
 
 
 
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10.4.2           Borrowers shall promptly notify Agent of their receipt of any
proceeds of Curative Equity and shall immediately apply the same to the payment
of the Obligations in the manner specified in Section 5.3.
 
10.4.3           Subject to the limitations set forth in Section 10.4.6, any
investment of Curative Equity shall be in an amount that is sufficient to cause
Parent and its Subsidiaries to be in compliance with all of the Specified
Financial Covenants as at the last day of the most recently ended month or
Fiscal Quarter (as the case may be), calculated for such purpose as if such
amount were additional EBITDAR and increase in Tangible Net Worth, and a
decrease in Total Liabilities, as necessary, of Parent and its Subsidiaries as
at such date and had been included in the financial calculations of Parent and
its Subsidiaries on such date.
 
10.4.4           In the Compliance Certificate delivered pursuant to Section
10.1.2(d) in respect of the month end or Fiscal Quarter end (as the case may be)
on which Curative Equity is used to cure any breach of the Specified Financial
Covenants, Borrowers shall (i) include evidence of its receipt of Curative
Equity proceeds, and (ii) set forth a calculation of the financial results and
balance sheet of Parent and its Subsidiaries as at such month end or Fiscal
Quarter end (as the case may be) (including for such purposes the proceeds of
such Curative Equity as either deemed EBITDAR for such month end or Fiscal
Quarter end (as the case may be) and the three following month end or Fiscal
Quarter end (as the case may be), or increased Tangible Net Worth and decreased
Total Liabilities for such month end or Fiscal Quarter end (as the case may be),
as if received on such date), which shall confirm that on a pro forma basis
taking into account the application of Curative Equity proceeds, Parent and its
Subsidiaries would have been in compliance with the Specified Financial
Covenants  (as at such date).
 
10.4.5           Upon delivery of a Compliance Certificate pursuant to Section
10.1.2(d) conforming to the requirements of this Section, any Event of Default
that is continuing from a breach of any of the Specified Financial Covenants
shall be deemed cured with no further action required by the Lenders.  In the
event Borrowers do not cure all financial covenant violations as provided in
this Section 10.4, the existing Event of Default shall continue unless waived by
the Required Lenders in writing.
 
10.4.6           Notwithstanding the foregoing, Borrowers’ rights under this
Section 10.4 may (i) be exercised not more than one time during the term of this
Agreement, (ii) not be exercised in an amount less than $1,000,000 or greater
than $5,000,000, and (iii) shall be on terms acceptable to Agent.
 
10.5           Contract Forms.  Borrowers shall not use or acquire in their
business Contracts which are not on the printed forms previously approved in
writing by Agent and Borrowers shall not change or vary the printed forms of
such Contracts without Agent’s prior written consent, unless such change or
variation is required by any Requirement of Law.  Agent may reasonably withhold
its consent until Agent receives a satisfactory opinion of Borrowers’ counsel
regarding compliance of the revised form of Contract with any Requirement of
Law.
 
 
 
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10.6           Credit and Collection Guidelines.  Borrowers shall not make any
material changes in its Credit and Collection Guidelines (a copy of which has
been previously furnished by Borrowers to Agent) without Agent’s prior written
consent, which Agent may withhold in its sole and absolute discretion.  Borrower
shall not enter into or otherwise acquire Contracts which do not comply with the
Credit and Collection Guidelines.
 
10.7           Minimum Cash Recovery Percent. As long as any Revolver
Commitments or Obligations are outstanding, Parent shall, on a consolidated
basis with its Subsidiaries maintain a Cash Recovery Percent in a percentage not
equal to or less than 4.74% for each month, measured monthly as of the last day
of each month.
 
SECTION 11.     EVENTS OF DEFAULT; REMEDIES ON DEFAULT
 
11.1           Events of Default.  Each of the following shall be an “Event of
Default” hereunder, if the same shall occur for any reason whatsoever, whether
voluntary or involuntary, by operation of law or otherwise:
 
(a)           A Borrower fails to pay any Obligations when due (whether at
stated maturity, on demand, upon acceleration or otherwise);
 
(b)           Any representation, warranty or other written statement of an
Obligor made in connection with any Loan Documents or transactions contemplated
thereby is incorrect or misleading in any material respect when given;
 
(c)           A Borrower breaches or fail to perform any covenant contained in
Section 7.2, 7.3, 7.4, 7.6, 7.8.2, 8.1, 8.2.1, 8.2.4, 8.2.5, 8.4.2, 10.1.1,
10.1.2, 10.1.3, 10.1.7 (only with respect to a failure to maintain insurance at
the required coverage amount), 10.1.12 (only with respect to a failure to
provide Agent with prior notice of a material modification and to obtain Agent’s
consent to such material modification), 10.2, 10.3 or 10.7;
 
(d)           An Obligor breaches or fails to perform any other covenant
contained in any Loan Documents, and such breach or failure is not cured within
15 days after a Senior Officer of such Obligor has knowledge thereof or receives
notice thereof from Agent, whichever is sooner; provided, however, that such
notice and opportunity to cure shall not apply if the breach or failure to
perform is not capable of being cured within such period or is a willful breach
by an Obligor;
 
(e)           A Guarantor repudiates, revokes or attempts to revoke its
Guaranty; an Obligor denies or contests the validity or enforceability of any
Loan Documents or Obligations, or the perfection or priority of any Lien granted
to Agent; or any Loan Document ceases to be in full force or effect for any
reason (other than a waiver or release by Agent and Lenders);
 
(f)           Any breach or default of an Obligor occurs under any document,
instrument or agreement to which it is a party or by which it or any of its
Properties is bound, relating to any Debt (other than the Obligations) in excess
of $5,000,000 (including the documents related to the Term Loan Facility and the
Permitted ABS Documents), if the maturity of or any payment with respect to such
Debt may be accelerated or demanded due to such breach;
 
 
 
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(g)           Any judgment or order for the payment of money is entered against
an Obligor in an amount that exceeds, individually or cumulatively with all
unsatisfied judgments or orders against all Obligors, $5,000,000 (net of any
insurance coverage therefor acknowledged in writing by the insurer), unless a
stay of enforcement of such judgment or order is in effect, by reason of a
pending appeal or otherwise;
 
(h)           A loss, theft, damage or destruction occurs with respect to any
Collateral if the amount not covered by insurance exceeds $5,000,000;
 
(i)           An Obligor is enjoined, restrained or in any way prevented by any
Governmental Authority from conducting any material part of its business; an
Obligor suffers the loss, revocation or termination of any material license,
permit, lease or agreement necessary to its business; there is a cessation of
any material part of an Obligor’s business for a material period of time; any
material Collateral or Property of an Obligor is taken or impaired through
condemnation; an Obligor agrees to or commences any liquidation, dissolution or
winding up of its affairs; or an Obligor is not Solvent;
 
(j)           An Insolvency Proceeding is commenced by an Obligor; an Obligor
makes an offer of settlement, extension or composition to its unsecured
creditors generally; a trustee is appointed to take possession of any
substantial Property of or to operate any of the business of an Obligor; or an
Insolvency Proceeding is commenced against an Obligor and:  the Obligor consents
to institution of the proceeding, the petition commencing the proceeding is not
timely contested by the Obligor, the petition is not dismissed within 45 days
after filing, or an order for relief is entered in the proceeding;
 
(k)           An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan that has resulted or could reasonably be expected to result
in liability of an Obligor to a Pension Plan, Multiemployer Plan or PBGC, or
that constitutes grounds for appointment of a trustee for or termination by the
PBGC of any Pension Plan or Multiemployer Plan; an Obligor or ERISA Affiliate
fails to pay when due any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan; or any event
similar to the foregoing occurs or exists with respect to a Foreign Plan;
 
(l)           An Obligor or any of its Senior Officers is criminally indicted or
convicted for (i) a felony committed in the conduct of the Obligor’s business,
or (ii) violating any state or federal law (including the Controlled Substances
Act, Money Laundering Control Act of 1986 and Illegal Exportation of War
Materials Act) that could lead to forfeiture of any material Property or any
Collateral;
 
(m)           A Change of Control occurs; or any event occurs or condition
exists that has a Material Adverse Effect; or
 
(n)           Any default or event of default occurs under the Term Loan
Agreement or any other Term Loan Documents.
 
11.2           Remedies upon Default.  If an Event of Default described in
Section 11.1(j) occurs with respect to any Borrower, then to the extent
permitted by Applicable Law, all Obligations (other than Secured Bank Product
Obligations) shall become automatically due and payable and all Revolver
Commitments shall terminate, without any action by Agent or notice of any
kind.  In addition, or if any other Event of Default exists, Agent may in its
sole discretion (and shall upon written direction of Required Lenders) do any
one or more of the following from time to time:
 
 
 
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(a)           declare any Obligations (other than Secured Bank Product
Obligations) immediately due and payable, whereupon they shall be due and
payable without diligence, presentment, demand, protest or notice of any kind,
all of which are hereby waived by Borrowers to the fullest extent permitted by
law;
 
(b)           terminate, reduce or condition any Revolver Commitment, or make
any adjustment to the Borrowing Base, CAI Borrowing Base, or CCI Borrowing Base;
 
(c)           require Obligors to Cash Collateralize LC Obligations, Secured
Bank Product Obligations and other Obligations that are contingent or not yet
due and payable, and, if Obligors fail promptly to deposit such Cash Collateral,
Agent may (and shall upon the direction of Required Lenders) advance the
required Cash Collateral as Revolver Loans (whether or not an Overadvance exists
or is created thereby, or the conditions in Section 6 are satisfied); and
 
(d)           exercise any other rights or remedies afforded under any
agreement, by law, at equity or otherwise, including the rights and remedies of
a secured party under the UCC.  Such rights and remedies include the rights to
(i) take possession of any Collateral; (ii) require Borrowers to assemble
Collateral, at Borrowers’ expense, and make it available to Agent at a place
designated by Agent; (iii) enter any premises where Collateral is located and
store Collateral on such premises until sold (and if the premises are owned or
leased by a Borrower, Borrowers agree not to charge for such storage); and (iv)
sell or otherwise dispose of any Collateral in its then condition, or after any
further manufacturing or processing thereof, at public or private sale, with
such notice as may be required by Applicable Law, in lots or in bulk, at such
locations, all as Agent, in its sole discretion, deems advisable.  Each Borrower
agrees that 10 days notice of any proposed sale or other disposition of
Collateral by Agent shall be reasonable.  Agent shall have the right to conduct
such sales on any Obligor’s premises, without charge, and such sales may be
adjourned from time to time in accordance with Applicable Law.  Agent shall have
the right to sell, lease or otherwise dispose of any Collateral for cash, credit
or any combination thereof, and Agent may purchase any Collateral at public or,
if permitted by law, private sale and, in lieu of actual payment of the purchase
price, may credit bid and set off the amount of such price against the
Obligations.
 
11.3           License.  Except as is prohibited by an existing and enforceable
anti-assignment provision (other than to the extent that any such term would be
rendered ineffective pursuant to the UCC or any other applicable law or
principles of equity), Agent is hereby granted an irrevocable, non-exclusive
license or other right to use, license or sub-license (without payment of
royalty or other compensation to any Person) any or all Intellectual Property of
Borrowers, computer hardware and software, trade secrets, brochures, customer
lists, promotional and advertising materials, labels, packaging materials and
other Property, in advertising for sale, marketing, selling, collecting,
completing manufacture of, or otherwise exercising any rights or remedies with
respect to, any Collateral.  Each Borrower’s rights and interests under
Intellectual Property shall inure to Agent’s benefit.
 
11.4           Setoff.  At any time during an Event of Default, Agent, Issuing
Bank, Lenders, and any of their Affiliates are authorized, to the fullest extent
permitted by Applicable Law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final, in whatever currency) at any
time held and other obligations (in whatever currency) at any time owing by
Agent, Issuing Bank, such Lender or such Affiliate to or for the credit or the
account of an Obligor against any Obligations, irrespective of whether or not
Agent, Issuing Bank, such Lender or such Affiliate shall have made any demand
under this Agreement or any other Loan Document and although
 
 
 
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such Obligations may be contingent or unmatured or are owed to a branch or
office of Agent, Issuing Bank, such Lender or such Affiliate different from the
branch or office holding such deposit or obligated on such indebtedness.  The
rights of Agent, Issuing Bank, each Lender and each such Affiliate under this
Section are in addition to other rights and remedies (including other rights of
setoff) that such Person may have.
 
11.5           Remedies Cumulative; No Waiver.
 
11.5.1           Cumulative Rights.  All agreements, warranties, guaranties,
indemnities and other undertakings of Borrowers under the Loan Documents are
cumulative and not in derogation of each other.  The rights and remedies of
Agent and Lenders are cumulative, may be exercised at any time and from time to
time, concurrently or in any order, and are not exclusive of any other rights or
remedies available by agreement, by law, at equity or otherwise.  All such
rights and remedies shall continue in full force and effect until Full Payment
of all Obligations.
 
11.5.2           Waivers.  No waiver or course of dealing shall be established
by (a) the failure or delay of Agent or any Lender to require strict performance
by Borrowers with any terms of the Loan Documents, or to exercise any rights or
remedies with respect to Collateral or otherwise; (b) the making of any Loan or
issuance of any Letter of Credit during a Default, Event of Default, or other
failure to satisfy any conditions precedent; or (c) acceptance by Agent or any
Lender of any payment or performance by an Obligor under any Loan Documents in a
manner other than that specified therein.  It is expressly acknowledged by
Borrowers that any failure to satisfy a financial covenant on a measurement date
shall not be cured or remedied by satisfaction of such covenant on a subsequent
date.
 
SECTION 12.     AGENT
 
12.1           Appointment, Authority and Duties of Agent.
 
12.1.1           Appointment and Authority.  Each Secured Party appoints and
designates Bank of America as Agent under all Loan Documents.  Agent may, and
each Secured Party authorizes Agent to, enter into all Loan Documents to which
Agent is intended to be a party and accept all Security Documents, for Agent’s
benefit and the benefit of Secured Parties.  Each Secured Party agrees that any
action taken by Agent or Required Lenders in accordance with the provisions of
the Loan Documents, and the exercise by Agent or Required Lenders of any rights
or remedies set forth therein, together with all other powers reasonably
incidental thereto, shall be authorized by and binding upon all Secured
Parties.  Without limiting the generality of the foregoing, Agent shall have the
sole and exclusive authority to (a) act as the disbursing and collecting agent
for Lenders with respect to all payments and collections arising in connection
with the Loan Documents; (b) execute and deliver as Agent each Loan Document,
including any intercreditor or subordination agreement, and accept delivery of
each Loan Document from any Obligor or other Person; (c) act as collateral agent
for Secured Parties for purposes of perfecting and administering Liens under the
Loan Documents, and for all other purposes stated therein; (d) manage, supervise
or otherwise deal with Collateral; and (e) take any Enforcement Action or
otherwise exercise any rights or remedies with respect to any Collateral under
the Loan Documents, Applicable Law or otherwise.  The duties of Agent shall be
ministerial and
 
 
 
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administrative in nature, and Agent shall not have a fiduciary relationship with
any Lender, Secured Party, Participant or other Person, by reason of any Loan
Document or any transaction relating thereto.  Agent alone shall be authorized
to determine whether any Contract or Inventory constitute Eligible Contracts or
Eligible Inventory, whether to impose or release any reserve, or whether any
conditions to funding or to issuance of a Letter of Credit have been satisfied,
which determinations and judgments, if exercised in good faith, shall exonerate
Agent from liability to any Lender or other Person for any error in judgment.
 
12.1.2           Duties.  Agent shall not have any duties except those expressly
set forth in the Loan Documents.  The conferral upon Agent of any right shall
not imply a duty on Agent’s part to exercise such right, unless instructed to do
so by Required Lenders in accordance with this Agreement.
 
12.1.3           Agent Professionals.  Agent may perform its duties through
agents and employees.  Agent may consult with and employ Agent Professionals,
and shall be entitled to act upon, and shall be fully protected in any action
taken in good faith reliance upon, any advice given by an Agent
Professional.  Agent shall not be responsible for the negligence or misconduct
of any agents, employees or Agent Professionals selected by it with reasonable
care.
 
12.1.4           Instructions of Required Lenders.  The rights and remedies
conferred upon Agent under the Loan Documents may be exercised without the
necessity of joinder of any other party, unless required by Applicable
Law.  Agent may request instructions from Required Lenders or other Secured
Parties with respect to any act (including the failure to act) in connection
with any Loan Documents, and may seek assurances to its satisfaction from
Secured Parties of their indemnification obligations against all Claims that
could be incurred by Agent in connection with any act.  Agent shall be entitled
to refrain from any act until it has received such instructions or assurances,
and Agent shall not incur liability to any Person by reason of so
refraining.  Instructions of Required Lenders shall be binding upon all Secured
Parties, and no Secured Party shall have any right of action whatsoever against
Agent as a result of Agent acting or refraining from acting in accordance with
the instructions of Required Lenders.  Notwithstanding the foregoing,
instructions by and consent of all Lenders or Secured Parties shall be required
in the circumstances described in Section 14.1.1, and in no event shall Required
Lenders, without the prior written consent of each Lender, direct Agent to
accelerate and demand payment of Revolver Loans held by one Lender without
accelerating and demanding payment of all other Revolver Loans, nor to terminate
the Revolver Commitments of one Lender without terminating the Revolver
Commitments of all Lenders.  In no event shall Agent be required to take any
action that, in its opinion, is contrary to Applicable Law or any Loan Documents
or could subject any Agent Indemnitee to personal liability.
 
12.2           Agreements Regarding Collateral and Field Examination Reports.
 
12.2.1           Lien Releases; Care of Collateral.  Secured Parties authorize
Agent to release any Lien with respect to any Collateral (a) upon Full Payment
of the Obligations; (b) that is the subject of an Asset Disposition which
Borrowers certify in writing to Agent is a Permitted Asset Disposition or a Lien
which Borrowers certify is a Permitted Lien entitled to priority over Agent’s
Liens (and Agent may rely conclusively on any such certificate without further
inquiry); (c) that does not constitute Collateral with a book value greater than
$10,000,000 in the aggregate released during any 6-month period (other than with
respect to owned Real Estate); or (d) with the
 
 
 
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written consent of all Lenders.  Secured Parties authorize Agent to subordinate
their Liens to any Purchase Money Lien permitted hereunder.  Agent shall have no
obligation to assure that any Collateral exists or is owned by a Borrower, or is
cared for, protected or insured, nor to assure that Agent’s Liens have been
properly created, perfected or enforced, or are entitled to any particular
priority, nor to exercise any duty of care with respect to any Collateral.
 
12.2.2           Possession of Collateral.  Agent and Secured Parties appoint
each Lender as agent (for the benefit of Secured Parties) for the purpose of
perfecting Liens in any Collateral held or controlled by such Lender, to the
extent such Liens are perfected by possession or control.  If any Lender obtains
possession or control of any Collateral, it shall notify Agent thereof and,
promptly upon Agent’s request, deliver such Collateral to Agent or otherwise
deal with it in accordance with Agent’s instructions.
 
12.2.3           Reports.  Agent shall promptly forward to each Lender, when
complete, copies of any field audit, examination or appraisal prepared by or for
Agent with respect to any Obligor or Collateral (“Report”).  Each Lender agrees
(a) that neither Bank of America nor Agent makes any representation or warranty
as to the accuracy or completeness of any Report, and shall not be liable for
any information contained in or omitted from any Report; (b) that the Reports
are not intended to be comprehensive audits or examinations, and that Agent or
any other Person performing any audit or examination will inspect only specific
information regarding Obligations or the Collateral and will rely significantly
upon Borrowers’ books and records as well as upon representations of Borrowers’
officers and employees; and (c) to keep all Reports confidential and strictly
for such Lender’s internal use, and not to distribute any Report (or the
contents thereof) to any Person (except to such Lender’s Participants, attorneys
and accountants) or use any Report in any manner other than administration of
the Revolver Loans and other Obligations.  Each Lender shall indemnify and hold
harmless Agent and any other Person preparing a Report from any action such
Lender may take as a result of or any conclusion it may draw from any Report, as
well as from any Claims arising as a direct or indirect result of Agent
furnishing a Report to such Lender.
 
12.3           Reliance By Agent.  Agent shall be entitled to rely, and shall be
fully protected in relying, upon any certification, notice or other
communication (including those by telephone, telex, telegram, telecopy or
e-mail) believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person, and upon the advice and statements of Agent
Professionals.
 
12.4           Action Upon Default.  Agent shall not be deemed to have knowledge
of any Default or Event of Default unless it has received written notice from a
Lender or Borrower specifying the occurrence and nature thereof.  If any Lender
acquires knowledge of a Default or Event of Default, it shall promptly notify
Agent and the other Lenders thereof in writing.  Each Lender agrees that, except
as otherwise provided in any Loan Documents or with the written consent of Agent
and Required Lenders, it will not take any Enforcement Action, accelerate
Obligations (other than Secured Bank Product Obligations), or exercise any right
that it might otherwise have under Applicable Law to credit bid at foreclosure
sales, UCC sales or other similar dispositions of Collateral.  Notwithstanding
the foregoing, however, a Secured Party may take action to preserve or enforce
its rights against an Obligor where a deadline or limitation period is
applicable that would, absent such action, bar enforcement of Obligations held
by such Secured Party, including the filing of proofs of claim in an Insolvency
Proceeding.
 
 
 
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12.5           Ratable Sharing.  If any Lender shall obtain any payment or
reduction of any Obligation, whether through set-off or otherwise, in excess of
its share of such Obligation, determined on a Pro Rata basis or in accordance
with Section 5.6.1, as applicable, such Lender shall forthwith purchase from
Agent, Issuing Bank and the other Lenders such participations in the affected
Obligation as are necessary to cause the purchasing Lender to share the excess
payment or reduction on a Pro Rata basis or in accordance with Section 5.6.1, as
applicable.  If any of such payment or reduction is thereafter recovered from
the purchasing Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest.  No Lender shall
set off against any Dominion Account without the prior consent of Agent.
 
12.6           Indemnification of Agent Indemnitees.  EACH LENDER SHALL
INDEMNIFY AND HOLD HARMLESS AGENT INDEMNITEES, TO THE EXTENT NOT REIMBURSED BY
OBLIGORS (BUT WITHOUT LIMITING THE INDEMNIFICATION OBLIGATIONS OF OBLIGORS UNDER
ANY LOAN DOCUMENTS), ON A PRO RATA BASIS, AGAINST ALL CLAIMS THAT MAY BE
INCURRED BY OR ASSERTED AGAINST ANY AGENT INDEMNITEE, PROVIDED THE CLAIM RELATES
TO OR ARISES FROM AN AGENT INDEMNITEE ACTING AS OR FOR AGENT (IN ITS CAPACITY AS
AGENT).  In Agent’s sole discretion, it may reserve for any such Claims made
against an Agent Indemnitee, and may satisfy any judgment, order or settlement
relating thereto, from proceeds of Collateral prior to making any distribution
of Collateral proceeds to Secured Parties.  If Agent is sued by any receiver,
bankruptcy trustee, debtor-in-possession or other Person for any alleged
preference or fraudulent transfer, then any monies paid by Agent in settlement
or satisfaction of such proceeding, together with all interest, costs and
expenses (including attorneys’ fees) incurred in the defense of same, shall be
promptly reimbursed to Agent by each Lender to the extent of its Pro Rata
share.  In no event shall any Lender have any obligation hereunder to indemnify
or hold harmless any Agent Indemnitee with respect to a Claim that is determined
in a final, non-appealable judgment by a court of competent jurisdiction to
result from the gross negligence or willful misconduct of such Agent Indemnitee.
 
12.7           Limitation on Responsibilities of Agent.  Agent shall not be
liable to any Secured Party for any action taken or omitted to be taken under
the Loan Documents, except for losses directly and solely caused by Agent’s
gross negligence or willful misconduct.  Agent does not assume any
responsibility for any failure or delay in performance or any breach by any
Obligor, Lender or other Secured Party of any obligations under the Loan
Documents.  Agent does not make to Secured Parties any express or implied
warranty, representation or guarantee with respect to any Obligations,
Collateral, Loan Documents or Obligor.  No Agent Indemnitee shall be responsible
to Secured Parties for any recitals, statements, information, representations or
warranties contained in any Loan Documents; the execution, validity,
genuineness, effectiveness or enforceability of any Loan Documents; the
genuineness, enforceability, collectibility, value, sufficiency, location or
existence of any Collateral, or the validity, extent, perfection or priority of
any Lien therein; the validity, enforceability or collectibility of any
Obligations; or the assets, liabilities, financial condition, results of
operations, business, creditworthiness or legal status of any Obligor or
Contract Debtor.  No Agent Indemnitee shall have any obligation to any Secured
Party to ascertain or inquire into the existence of any Default or Event of
Default, the observance or performance by any Obligor of any terms of the Loan
Documents, or the satisfaction of any conditions precedent contained in any Loan
Documents.
 
12.8           Successor Agent and Co-Agents.
 
 
 
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12.8.1           Resignation; Successor Agent.  Subject to the appointment and
acceptance of a successor Agent as provided below, Agent may resign at any time
by giving at least 30 days written notice thereof to Lenders and
Borrowers.  Upon receipt of such notice, Required Lenders shall have the right
to appoint a successor Agent which shall be (a) a Lender or an Affiliate of a
Lender; or (b) a commercial bank that is organized under the laws of the United
States or any state or district thereof, has a combined capital surplus of at
least $200,000,000 and (provided no Default or Event of Default exists) is
reasonably acceptable to Borrowers.  If no successor agent is appointed prior to
the effective date of the resignation of Agent, then Agent may appoint a
successor agent from among Lenders, or if no Lender accepts such role, Agent may
appoint Required Lenders as successor agent.  Upon acceptance by a successor
Agent of an appointment to serve as Agent hereunder, or upon appointment of
Required Lenders as successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the powers and duties of the retiring
Agent without further act, and the retiring Agent shall be discharged from its
duties and obligations hereunder but shall continue to have the benefits of the
indemnification set forth in Sections 12.6 and 14.2.  Notwithstanding any
Agent’s resignation, the provisions of this Section 12 shall continue in effect
for its benefit with respect to any actions taken or omitted to be taken by it
while Agent.  Any successor to Bank of America by merger or acquisition of stock
or this loan shall continue to be Agent hereunder without further act on the
part of the parties hereto, unless such successor resigns as provided above.
 
12.8.2           Separate Collateral Agent.  It is the intent of the parties
that there shall be no violation of any Applicable Law denying or restricting
the right of financial institutions to transact business in any
jurisdiction.  If Agent believes that it may be limited in the exercise of any
rights or remedies under the Loan Documents due to any Applicable Law, Agent may
appoint an additional Person who is not so limited, as a separate collateral
agent or co-collateral agent.  If Agent so appoints a collateral agent or
co-collateral agent, each right and remedy intended to be available to Agent
under the Loan Documents shall also be vested in such separate agent.  Every
covenant and obligation necessary to the exercise thereof by such agent shall
run to and be enforceable by it as well as Agent.  Lenders shall execute and
deliver such documents as Agent deems appropriate to vest any rights or remedies
in such agent.  If any collateral agent or co-collateral agent shall die or
dissolve, become incapable of acting, resign or be removed, then all the rights
and remedies of such agent, to the extent permitted by Applicable Law, shall
vest in and be exercised by Agent until appointment of a new agent.
 
12.9           Due Diligence and Non-Reliance.  Each Lender acknowledges and
agrees that it has, independently and without reliance upon Agent or any other
Lenders, and based upon such documents, information and analyses as it has
deemed appropriate, made its own credit analysis of each Obligor and its own
decision to enter into this Agreement and to fund Revolver Loans and participate
in LC Obligations hereunder.  Each Secured Party has made such inquiries
concerning the Loan Documents, the Collateral and each Obligor as such Secured
Party feels necessary.  Each Secured Party further acknowledges and agrees that
the other Secured Parties and Agent have made no representations or warranties
concerning any Obligor, any Collateral or the legality, validity, sufficiency or
enforceability of any Loan Documents or Obligations.  Each Secured Party will,
independently and without reliance upon the other Secured Parties or Agent, and
based upon such financial statements, documents and information as it deems
appropriate at the time, continue to make and rely upon its own credit decisions
in making Revolver Loans and participating in LC Obligations, and in taking or
refraining from any action under any Loan Documents.  Except for notices,
reports and other information expressly requested by a Lender, Agent shall have
no duty or responsibility to provide any Secured Party with any notices, reports
or certificates furnished to Agent by any Obligor or any credit or other
information concerning the affairs, financial condition, business or Properties
of any Obligor (or any of its Affiliates) which may come into possession of
Agent or any of Agent’s Affiliates.
 
 
 
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12.10           Replacement of Certain Lenders.  If a Lender (a) is a Defaulting
Lender, or (b) fails, within 10 days after request by Borrowers, to give its
consent to any amendment, waiver or action for which consent of all Lenders was
required and Required Lenders consented, then, in addition to any other rights
and remedies that any Person may have, Agent may, by notice to such Lender
within 120 days after such event, require such Lender to assign all of its
rights and obligations under the Loan Documents to Eligible Assignee(s)
specified by Agent, pursuant to appropriate Assignment and Acceptance(s) and
within 20 days after Agent’s notice.  Agent is irrevocably appointed as
attorney-in-fact to execute any such Assignment and Acceptance if the Lender
fails to execute same.  Such Lender shall be entitled to receive, in cash,
concurrently with such assignment, all amounts owed to it under the Loan
Documents, including all principal, interest and fees through the date of
assignment (but excluding any prepayment charge).
 
12.11           Remittance of Payments and Collections.
 
12.11.1                      Remittances Generally.  All payments by any Secured
Party to Agent shall be made by the time and on the day set forth in this
Agreement, in immediately available funds.  If no time for payment is specified
or if payment is due on demand by Agent and request for payment is made by Agent
by 11:00 a.m. on a Business Day, payment shall be made by such Secured Party not
later than 2:00 p.m. on such day, and if request is made after 11:00 a.m., then
payment shall be made by 11:00 a.m. on the next Business Day.  Payment by Agent
to any Secured Party shall be made by wire transfer, in the type of funds
received by Agent.  Any such payment shall be subject to Agent’s right of offset
for any amounts due from such payee under the Loan Documents.
 
12.11.2                      Failure to Pay.  If any Secured Party fails to pay
any amount when due by it to Agent pursuant to the terms hereof, such amount
shall bear interest from the due date until paid at the rate determined by Agent
as customary in the banking industry for interbank compensation.  In no event
shall Borrowers be entitled to receive credit for any interest paid by a Secured
Party to Agent, nor shall any Defaulting Lender be entitled to interest on any
amount held by Agent pursuant to Section 4.2.
 
12.11.3                      Recovery of Payments.  If Agent pays any amount to
a Secured Party in the expectation that a related payment will be received by
Agent from an Obligor and such related payment is not received, then Agent may
recover such amount from each Secured Party that received it.  If Agent
determines at any time that an amount received under any Loan Document must be
returned to an Obligor or paid to any other Person pursuant to Applicable Law or
otherwise, then, notwithstanding any other term of any Loan Document, Agent
shall not be required to distribute such amount to any Lender.  If any amounts
received and applied by Agent to any Obligations are later required to be
returned by Agent pursuant to Applicable Law, each Secured Party shall pay to
Agent, on demand, such Secured Party’s pro rata share of the amounts required to
be returned.
 
12.12           Agent in its Individual Capacity.  As a Lender, Bank of America
shall have the same rights and remedies under the other Loan Documents as any
other Lender, and the terms “Lenders,” “Required Lenders” or any similar term
shall include Bank of America in its capacity as a Lender.  Each of Bank of
America and its Affiliates may accept deposits from, maintain deposits or credit
balances for, invest in, lend money to, provide Bank Products to, act as trustee
under indentures of, serve as financial or other advisor to, and generally
engage in any kind of business with, Obligors and their Affiliates, as if Bank
of America were any other bank, without any duty to account therefor (including
any fees or other consideration received in connection therewith) to the other
Lenders.  In their individual capacity, Bank of America and its Affiliates may
receive information regarding Obligors, their Affiliates and
 
 
 
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their Contract Debtors (including information subject to confidentiality
obligations), and each Secured Party agrees that Bank of America and its
Affiliates shall be under no obligation to provide such information to any
Secured Party, if acquired in such individual capacity and not as Agent
hereunder.
 
12.13           Agent Titles.  Each Lender, other than Bank of America, that is
designated (on the cover page of this Agreement or otherwise) by Bank of America
as an “Agent”, “Arranger”, “Joint Book Runner”, “Syndication Agent”, or
“Co-Documentation Agent” of any type shall not have any right, power,
responsibility or duty under any Loan Documents other than those applicable to
all Lenders, and shall in no event be deemed to have any fiduciary relationship
with any other Lender.
 
12.14           Bank Product Providers.  Each Secured Bank Product Provider, by
delivery of a notice to Agent of a Bank Product, agrees to be bound by Section
5.6 and this Section 12.  Each Secured Bank Product Provider shall indemnify and
hold harmless Agent Indemnitees, to the extent not reimbursed by Obligors,
against all Claims that may be incurred by or asserted against any Agent
Indemnitee in connection with such provider’s Secured Bank Product Obligations.
 
12.15           No Third Party Beneficiaries.  This Section 12 is an agreement
solely among Lenders and Agent, and shall survive Full Payment of the
Obligations.  This Section 12 does not confer any rights or benefits upon
Borrowers or any other Person.  As between Borrowers and Agent, any action that
Agent may take under any Loan Documents or with respect to any Obligations shall
be conclusively presumed to have been authorized and directed by Lenders.
 
SECTION 13.                                BENEFIT OF AGREEMENT; ASSIGNMENTS AND
PARTICIPATIONS
 
13.1           Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of Borrowers, Agent, Lenders, Secured Parties and their
respective successors and assigns, except that (a) no Borrower shall have the
right to assign its rights or delegate its obligations under any Loan Documents;
and (b) any assignment by a Lender must be made in compliance with Section
13.3.  Agent may treat the Person which made any Revolver Loan as the owner
thereof for all purposes until such Person makes an assignment in accordance
with Section 13.3.  Any authorization or consent of a Lender shall be conclusive
and binding on any subsequent transferee or assignee of such Lender.
 
13.2           Participations.
 
13.2.1           Permitted Participants; Effect.  Any Lender may, in the
ordinary course of its business and in accordance with Applicable Law, at any
time sell to a financial institution (“Participant”) a participating interest in
the rights and obligations of such Lender under any Loan Documents.  Despite any
sale by a Lender of participating interests to a Participant, such Lender’s
obligations under the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for performance of such
obligations, such Lender shall remain the holder of its Revolver Loans and
Revolver Commitments for all purposes, all amounts payable
 
 
 
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by Borrowers shall be determined as if such Lender had not sold such
participating interests, and Borrowers and Agent shall continue to deal solely
and directly with such Lender in connection with the Loan Documents.  Each
Lender shall be solely responsible for notifying its Participants of any matters
under the Loan Documents, and Agent and the other Lenders shall not have any
obligation or liability to any such Participant.  A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 5.9 unless Borrowers agree otherwise in writing.
 
13.2.2           Voting Rights.  Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, waiver or other
modification of any Loan Documents other than that which forgives principal,
interest or fees, reduces the stated interest rate or fees payable with respect
to any Revolver Loan or Revolver Commitment in which such Participant has an
interest, postpones the Revolver Commitment Termination Date or any date fixed
for any regularly scheduled payment of principal, interest or fees on such
Revolver Loan or Revolver Commitment, or releases any Borrower, Guarantor or
substantial portion of the Collateral.
 
13.2.3           Benefit of Set-Off.  Borrowers agree that each Participant
shall have a right of set-off in respect of its participating interest to the
same extent as if such interest were owing directly to a Lender, and each Lender
shall also retain the right of set-off with respect to any participating
interests sold by it.  By exercising any right of set-off, a Participant agrees
to share with Lenders all amounts received through its set-off, in accordance
with Section 12.5 as if such Participant were a Lender.
 
13.3           Assignments.
 
13.3.1           Permitted Assignments.  A Lender may assign to an Eligible
Assignee any of its rights and obligations under the Loan Documents, as long as
(a) each assignment is of a constant, and not a varying, percentage of the
transferor Lender’s rights and obligations under the Loan Documents and, in the
case of a partial assignment, is in a minimum principal amount of $10,000,000
(unless otherwise agreed by Agent in its discretion) and integral multiples of
$1,000,000 in excess of that amount; (b) except in the case of an assignment in
whole of a Lender’s rights and obligations, the aggregate amount of the Revolver
Commitments retained by the transferor Lender is at least $10,000,000 (unless
otherwise agreed by Agent in its discretion); and (c) the parties to each such
assignment shall execute and deliver to Agent, for its acceptance and recording,
an Assignment and Acceptance.  Nothing herein shall limit the right of a Lender
to pledge or assign any rights under the Loan Documents to (i) any Federal
Reserve Bank or the United States Treasury as collateral security pursuant to
Regulation A of the Board of Governors and any Operating Circular issued by such
Federal Reserve Bank, or (ii) counterparties to swap agreements relating to any
Revolver Loans; provided, however, that any payment by Borrowers to the
assigning Lender in respect of any Obligations assigned as described in this
sentence shall satisfy Borrowers’ obligations hereunder to the extent of such
payment, and no such assignment shall release the assigning Lender from its
obligations hereunder.
 
13.3.2           Effect; Effective Date.  Upon delivery to Agent of an
assignment notice in the form of Exhibit C and a processing fee of $5,000
(unless otherwise agreed by Agent in its discretion), the assignment shall
become effective as specified in the notice, if it complies with this Section
13.3.  From such effective date, the Eligible Assignee shall for all purposes be
a Lender under the Loan Documents, and shall have all rights and obligations of
a Lender thereunder.  Upon consummation of an assignment, the transferor Lender,
Agent and Borrowers shall make appropriate arrangements for issuance of
replacement and/or new Notes, as applicable.  The transferee Lender shall comply
with Section 5.10 and deliver, upon request, an administrative questionnaire
satisfactory to Agent.
 
 
 
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SECTION 14.      MISCELLANEOUS
 
14.1           Consents, Amendments and Waivers.
 
14.1.1           Amendment.  No modification of any Loan Document, including any
extension or amendment of a Loan Document or any waiver of a Default or Event of
Default, shall be effective without the prior written agreement of Agent (with
the consent of Required Lenders) and each Obligor party to such Loan Document;
provided, however, that
 
(a)           without the prior written consent of Agent, no modification shall
be effective with respect to any provision in a Loan Document that relates to
any rights, duties or discretion of Agent;
 
(b)           without the prior written consent of Issuing Bank, no modification
shall be effective with respect to any LC Obligations, Section 2.3 or any other
provision in a Loan document that relates to any rights, duties or discretion of
Issuing Bank;
 
(c)           without the prior written consent of each affected Lender, no
modification shall be effective that would (i) increase the Revolver Commitment
of such Lender; or (ii) reduce the amount of, or waive or delay payment of, any
principal, interest or fees payable to such Lender;
 
(d)           without the prior written consent of all Lenders (except a
Defaulting Lender as provided in Section 4.2), no modification shall be
effective that would (i) extend the Revolver Termination Date; (ii) alter
Section 5.6, 7.1 (except to add Collateral), 10.3.3, or 14.1.1; (iii) amend the
definitions of Adjusted Borrowing Base, Borrowing Base, CAI Borrowing Base, CCI
Borrowing Base (or any defined terms used in such definitions) (provided that
Agent shall be able to establish new CAI Availability Reserves or CCI
Availability Reserves after the Closing Date in its reasonable discretion and
thereafter shall be able to modify and/or remove such reserves in its reasonable
discretion), Pro Rata, Required Lenders or Supermajority Lenders; (iv) increase
any advance rate, or increase total Revolver Commitments except as set forth in
Section 2.2; (vi) release Collateral except as currently contemplated by the
Loan Documents; or (vii) release any Obligor from liability for any Obligations,
if such Obligor has material assets at the time of the release;
 
(e)           without the prior written consent of Supermajority Lenders, no
modification shall be effective that would amend the definition of Permitted
Distributions; and
 
(f)           without the prior written consent of a Secured Bank Product
Provider, no modification shall be effective that affects its relative payment
priority under Section 5.6.
 
14.1.2           Limitations.  The agreement of Borrowers shall not be necessary
to the effectiveness of any modification of a Loan Document that deals solely
with the rights and duties of Lenders, Agent and/or Issuing Bank as among
themselves.  Only the consent of the parties to the Fee Letter, or any agreement
relating to a Bank Product shall be required for any modification of such
agreement, and any non-Lender that is party to a Bank Product agreement shall
have no right to participate in any manner in modification of any other Loan
Document.  Any waiver or consent granted by Agent or Lenders hereunder shall be
effective only if in writing, and only for the matter specified.
 
 
 
 
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14.1.3           Payment for Consents.  No Borrower will, directly or
indirectly, pay any remuneration or other thing of value, whether by way of
additional interest, fee or otherwise, to any Lender (in its capacity as a
Lender hereunder) as consideration for agreement by such Lender with any
modification of any Loan Documents, unless such remuneration or value is
concurrently paid, on the same terms, on a Pro Rata basis to all Lenders
providing their consent.
 
14.2           Indemnity.  EACH BORROWER SHALL INDEMNIFY AND HOLD HARMLESS THE
INDEMNITEES AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY
INDEMNITEE BY ANY OBLIGOR OR OTHER PERSON, INCLUDING CLAIMS ARISING FROM THE
NEGLIGENCE OF AN INDEMNITEE.  In no event shall any party to a Loan Document
have any obligation thereunder to indemnify or hold harmless an Indemnitee with
respect to a Claim that is determined in a final, non-appealable judgment by a
court of competent jurisdiction to result from the gross negligence or willful
misconduct of such Indemnitee.
 
14.3           Notices and Communications.
 
14.3.1           Notice Address.  Subject to Section 4.1.4, all notices and
other communications by or to a party hereto shall be in writing and shall be
given to any Borrower, at Borrower Agent’s address shown on the signature pages
hereof, and to any other Person at its address shown on the signature pages
hereof (or, in the case of a Person who becomes a Lender after the Closing Date,
at the address shown on its Assignment and Acceptance), or at such other address
as a party may hereafter specify by notice in accordance with this Section
14.3.  Each such notice or other communication shall be effective only (a) if
given by facsimile transmission, when transmitted to the applicable facsimile
number, if confirmation of receipt is received; (b) if given by mail, three
Business Days after deposit in the U.S. mail, with first-class postage pre-paid,
addressed to the applicable address; or (c) if given by personal delivery, when
duly delivered to the notice address with receipt acknowledged.  Notwithstanding
the foregoing, no notice to Agent pursuant to Section 2.1.4, 2.3, 3.1.2 or 4.1.1
shall be effective until actually received by the individual to whose attention
at Agent such notice is required to be sent.  Any written notice or other
communication that is not sent in conformity with the foregoing provisions shall
nevertheless be effective on the date actually received by the noticed
party.  Any notice received by Borrower Agent shall be deemed received by all
Borrowers.
 
14.3.2           Electronic Communications; Voice Mail.  Electronic mail and
internet websites may be used only for routine communications, such as financial
statements, Borrowing Base Certificates and other information required by
Section 10.1.2, administrative matters, distribution of Loan Documents for
execution, and matters permitted under Section 4.1.4.  Agent and Lenders make no
assurances as to the privacy and security of electronic
communications.  Electronic and voice mail may not be used as effective notice
under the Loan Documents.
 
14.3.3           Non-Conforming Communications.  Agent and Lenders may rely upon
any notices purportedly given by or on behalf of any Borrower even if such
notices were not made in a manner specified herein, were incomplete or were not
confirmed, or if the terms thereof, as understood by the recipient, varied from
a later confirmation.  Each Borrower shall indemnify and hold harmless each
Indemnitee from any liabilities, losses, costs and expenses arising from any
telephonic communication purportedly given by or on behalf of a Borrower.
 
 
 
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14.4           Performance of Borrowers’ Obligations.  Agent may, in its sole
discretion at any time and from time to time, at Borrowers’ expense, pay any
amount or do any act required of a Borrower under any Loan Documents or
otherwise lawfully requested by Agent to (a) enforce any Loan Documents or
collect any Obligations; (b) protect, insure, maintain or realize upon any
Collateral; or (c) defend or maintain the validity or priority of Agent’s Liens
in any Collateral, including any payment of a judgment, insurance premium,
warehouse charge, finishing or processing charge, or landlord claim, or any
discharge of a Lien.  All payments, costs and expenses (including Extraordinary
Expenses) of Agent under this Section shall be reimbursed to Agent by Borrowers,
on demand, with interest from the date incurred to the date of payment thereof
at the Default Rate applicable to Base Rate Revolver Loans.  Any payment made or
action taken by Agent under this Section shall be without prejudice to any right
to assert an Event of Default or to exercise any other rights or remedies under
the Loan Documents.
 
14.5           Credit Inquiries.  Each Borrower hereby authorizes Agent and
Lenders (but they shall have no obligation) to respond to usual and customary
credit inquiries from third parties concerning any Borrower or its Subsidiary.
 
14.6           Severability.  Wherever possible, each provision of the Loan
Documents shall be interpreted in such manner as to be valid under Applicable
Law.  If any provision is found to be invalid under Applicable Law, it shall be
ineffective only to the extent of such invalidity and the remaining provisions
of the Loan Documents shall remain in full force and effect.
 
14.7           Cumulative Effect; Conflict of Terms.  The provisions of the Loan
Documents are cumulative.  The parties acknowledge that the Loan Documents may
use several limitations, tests or measurements to regulate similar matters, and
they agree that these are cumulative and that each must be performed as
provided.  Except as otherwise provided in another Loan Document (by specific
reference to the applicable provision of this Agreement), if any provision
contained herein is in direct conflict with any provision in another Loan
Document, the provision herein shall govern and control.
 
14.8           Counterparts.  Any Loan Document may be executed in counterparts,
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This Agreement shall become effective when
Agent has received counterparts bearing the signatures of all parties
hereto.  Delivery of a signature page of any Loan Document by telecopy or other
electronic means shall be effective as delivery of a manually executed
counterpart of such agreement.
 
14.9           Entire Agreement.  Time is of the essence of the Loan
Documents.  The Loan Documents constitute the entire contract among the parties
relating to the subject matter hereof, and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof.
 
14.10           Relationship with Lenders.  The obligations of each Lender
hereunder are several, and no Lender shall be responsible for the obligations or
Revolver Commitments of any other Lender.  Amounts payable hereunder to each
Lender shall be a separate and independent debt.  It shall not be necessary for
Agent or any other Lender to be joined as an additional party in any proceeding
for such purposes.  Nothing in this Agreement and no
 
 
 
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action of Agent, Lenders or any other Secured Party pursuant to the Loan
Documents or otherwise shall be deemed to constitute Agent and Lenders to be a
partnership, association, joint venture or any other kind of entity, nor to
constitute control of any Borrower.
 
14.11           No Advisory or Fiduciary Responsibility.  In connection with all
aspects of each transaction contemplated by any Loan Document, Borrowers
acknowledge and agree that (a)(i) this credit facility and any related arranging
or other services by Agent, any Lender, any of their Affiliates or any arranger
are arm’s-length commercial transactions between Borrowers and such Person; (ii)
Borrowers have consulted their own legal, accounting, regulatory and tax
advisors to the extent they have deemed appropriate; and (iii) Borrowers are
capable of evaluating and understanding, and do understand and accept, the
terms, risks and conditions of the transactions contemplated by the Loan
Documents; (b) each of Agent, Lenders, their Affiliates and any arranger is and
has been acting solely as a principal in connection with this credit facility,
is not the financial advisor, agent or fiduciary for Borrowers, any of their
Affiliates or any other Person, and has no obligation with respect to the
transactions contemplated by the Loan Documents except as expressly set forth
therein; and (c) Agent, Lenders, their Affiliates and any arranger may be
engaged in a broad range of transactions that involve interests that differ from
those of Borrowers and their Affiliates, and have no obligation to disclose any
of such interests to Borrowers or their Affiliates.  To the fullest extent
permitted by Applicable Law, each Borrower hereby waives and releases any claims
that it may have against Agent, Lenders, their Affiliates and any arranger with
respect to any breach or alleged breach of agency or fiduciary duty in
connection with any aspect of any transaction contemplated by a Loan Document.
 
14.12           Confidentiality.  Each of Agent, Lenders and Issuing Bank agrees
to maintain the confidentiality of all Information (as defined below), except
that Information may be disclosed (a) to its Affiliates, and to its and their
partners, directors, officers, employees, agents, advisors and representatives
(provided such Persons are informed of the confidential nature of the
Information and instructed to keep it confidential); (b) to the extent requested
by any governmental, regulatory or self-regulatory authority purporting to have
jurisdiction over it or its Affiliates; (c) to the extent required by Applicable
Law or by any subpoena or other legal process; (d) to any other party hereto;
(e) in connection with any action or proceeding, or other exercise of rights or
remedies, relating to any Loan Documents or Obligations; (f) subject to an
agreement containing provisions substantially the same as this Section, to any
Transferee or any actual or prospective party (or its advisors) to any Bank
Product; (g) with the consent of Borrower Agent; or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) is available to Agent, any Lender, Issuing Bank or any of
their Affiliates on a nonconfidential basis from a source other than
Borrowers.  Notwithstanding the foregoing, Agent and Lenders may publish or
disseminate general information describing this credit facility, including the
names and addresses of Borrowers and a general description of Borrowers’
businesses, and may use Borrowers’ logos, or trademarks in advertising
materials.  As used herein, “Information” means all information received from an
Obligor or Subsidiary relating to it or its business that is identified as
confidential when delivered.  Any Person required to maintain the
confidentiality of Information pursuant to this Section shall be deemed to have
complied if it exercises the same degree of care that it accords its own
confidential information.  Each of Agent, Lenders and Issuing Bank acknowledges
that (i) Information may include material non-public information concerning an
Obligor or Subsidiary; (ii) it has developed compliance procedures regarding the
use of material non-public information; and (iii) it will handle such material
non-public information in accordance with Applicable Law, including federal and
state securities laws.
 
 
 
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14.13           Intentionally Omitted.
 
14.14           GOVERNING LAW.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
UNLESS OTHERWISE SPECIFIED, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
CALIFORNIA, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING
EFFECT TO FEDERAL LAWS RELATING TO NATIONAL BANKS).
 
14.15           Consent to Forum; Arbitration.
 
14.15.1                      Forum.  EACH BORROWER HEREBY CONSENTS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN OR WITH
JURISDICTION OVER LOS ANGELES COUNTY, CALIFORNIA, IN ANY PROCEEDING OR DISPUTE
RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY SUCH PROCEEDING
SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT.  EACH BORROWER IRREVOCABLY
WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING SUCH
COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT
FORUM.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE
MANNER PROVIDED FOR NOTICES IN SECTION 14.3.1.  Nothing herein shall limit the
right of Agent or any Lender to bring proceedings against any Obligor in any
other court, nor limit the right of any party to serve process in any other
manner permitted by Applicable Law.  Nothing in this Agreement shall be deemed
to preclude enforcement by Agent of any judgment or order obtained in any forum
or jurisdiction.
 
14.15.2                      Arbitration.  Notwithstanding any other provision
of this Agreement to the contrary, any controversy or claim among the parties
relating in any way to any Obligations or Loan Documents, including any alleged
tort, shall at the request of any party hereto be determined by binding
arbitration conducted in accordance with the United States Arbitration Act
(Title 9 U.S. Code).  Arbitration proceedings will be determined in accordance
with the Act, the then-current rules and procedures for the arbitration of
financial services disputes of the American Arbitration Association (“AAA”), and
the terms of this Section.  In the event of any inconsistency, the terms of this
Section shall control.  If AAA is unwilling or unable to serve as the provider
of arbitration or to enforce any provision of this Section, Agent may designate
another arbitration organization with similar procedures to serve as the
provider of arbitration.  The arbitration proceedings shall be conducted in Los
Angeles or Pasadena, California.  The arbitration hearing shall commence within
90 days of the arbitration demand and close within 90 days thereafter.  The
arbitration award must be issued within 30 days after close of the hearing
(subject to extension by the arbitrator for up to 60 days upon a showing of good
cause), and shall include a concise written statement of reasons for the
award.  The arbitrator shall give effect to applicable statutes of limitation in
determining any controversy or claim, and for these purposes, service on AAA
under applicable AAA rules of a notice of claim is the equivalent of the filing
of a lawsuit.  Any dispute concerning this Section or whether a controversy or
claim is arbitrable shall be determined by the arbitrator.  The arbitrator shall
have the power to award legal fees to the extent provided by this
Agreement.  Judgment upon an arbitration award may be entered in any court
having jurisdiction.  The arbitrator shall not have the power to commit errors
of law or legal reasoning, and any award may be reviewed
 
 
 
97

--------------------------------------------------------------------------------

 
 
 
and vacated or corrected on appeal to a court of competent jurisdiction for any
such error.  The institution and maintenance of an action for judicial relief or
pursuant to a provisional or ancillary remedy shall not constitute a waiver of
the right of any party, including the plaintiff, to submit the controversy or
claim to arbitration if any other party contests such action for judicial
relief.  No controversy or claim shall be submitted to arbitration without the
consent of all parties if, at the time of the proposed submission, such
controversy or claim relates to an obligation secured by Real Estate, but if all
parties do not consent to submission of such a controversy or claim to
arbitration, it shall be determined as provided in the next sentence.  At the
request of any party, a controversy or claim that is not submitted to
arbitration as provided above shall be determined by judicial reference; and if
such an election is made, the parties shall designate to the court a referee or
referees selected under the auspices of the AAA in the same manner as
arbitrators are selected in AAA sponsored proceedings and the presiding referee
of the panel (or the referee if there is a single referee) shall be an active
attorney or retired judge; and judgment upon the award rendered by such referee
or referees shall be entered in the court in which proceeding was
commenced.  None of the foregoing provisions of this Section shall limit the
right of Agent or Lenders to exercise self-help remedies, such as setoff,
foreclosure or sale of any Collateral or to obtain provisional or ancillary
remedies from a court of competent jurisdiction before, after or during any
arbitration proceeding.  The exercise of a remedy does not waive the right of
any party to resort to arbitration or reference.  At Agent’s option, foreclosure
under a mortgage or deed of trust may be accomplished either by exercise of
power of sale thereunder or by judicial foreclosure.
 
14.16           Waivers by Borrowers.  To the fullest extent permitted by
Applicable Law, each Borrower waives (a) the right to trial by jury (which Agent
and each Lender hereby also waives) in any proceeding or dispute of any kind
relating in any way to any Loan Documents, Obligations or Collateral; (b)
presentment, demand, protest, notice of presentment, default, non-payment,
maturity, release, compromise, settlement, extension or renewal of any
commercial paper, accounts, documents, instruments, chattel paper and guaranties
at any time held by Agent on which a Borrower may in any way be liable, and
hereby ratifies anything Agent may do in this regard; (c) notice prior to taking
possession or control of any Collateral; (d) any bond or security that might be
required by a court prior to allowing Agent to exercise any rights or remedies;
(e) the benefit of all valuation, appraisement and exemption laws; (f) any claim
against Agent or any Lender, on any theory of liability, for special, indirect,
consequential, exemplary or punitive damages (as opposed to direct or actual
damages) in any way relating to any Enforcement Action, Obligations, Loan
Documents or transactions relating thereto; and (g) notice of acceptance
hereof.  Each Borrower acknowledges that the foregoing waivers are a material
inducement to Agent and Lenders entering into this Agreement and that Agent and
Lenders are relying upon the foregoing in their dealings with Borrowers.  Each
Borrower has reviewed the foregoing waivers with its legal counsel and has
knowingly and voluntarily waived its jury trial and other rights following
consultation with legal counsel.  In the event of litigation, this Agreement may
be filed as a written consent to a trial by the court.
 
14.17           Patriot Act Notice.  Agent and Lenders hereby notify Borrowers
that pursuant to the requirements of the Patriot Act, Agent and Lenders are
required to obtain, verify and record information that identifies each Borrower,
including its legal name, address, tax ID number and other information that will
allow Agent and Lenders to identify it in accordance with the Patriot
Act.  Agent and Lenders will also require information regarding each personal
guarantor, if any, and may require information regarding Borrowers’ management
and owners, such as legal name, address, social security number and date of
birth.
 
 
 
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14.18           No Novation.  This Agreement does not extinguish the obligations
for the payment of money outstanding under the Original Loan Agreement or
discharge or release the obligations or the liens or priority of any mortgage,
pledge, security agreement or any other security therefor.  Nothing herein
contained shall be construed as a substitution or novation of the obligations
outstanding under the Original Loan Agreement or instruments securing the same,
which shall remain in full force and effect, except as modified hereby or by
instruments executed concurrently herewith.  Nothing expressed or implied in
this Agreement shall be construed as a release or other discharge of any
Borrower from any of its obligations or liabilities under the Original Loan
Agreement or any of the security agreements, pledge agreements, mortgages, or
other loan documents executed in connection therewith.  Each Borrower hereby (i)
confirms and agrees that each Loan Document to which it or its predecessor in
interest is a party  or to which it is a successor by operation of law is, and
shall continue to be, in full force and effect and is hereby ratified and
confirmed in all respects except that on and after the Closing Date all
references in any such Loan Document to “the Loan Agreement”, “thereto”,
“thereof”, “thereunder” or words of like import referring to the Original Loan
Agreement shall mean the Original Loan Agreement as amended and restated by this
Agreement; and (ii) confirms and agrees that to the extent that any such Loan
Document purports to assign or pledge to Agent, for the benefit of the Lenders,
or to grant to Agent, for the benefit of the Lenders a security interest in or
lien on, any collateral as security for the Obligations of Borrowers from time
to time existing in respect of the Original Loan Agreement, such pledge,
assignment or grant of the security interest or lien is hereby ratified and
confirmed in all respects.
 
14.19           Intercreditor Agreement.  Each Lender hereby irrevocably
appoints, designates and authorizes Agent to enter into and become bound by the
Intercreditor Agreement on its behalf and to take such action on its behalf
under the provisions thereof.  Each Lender further agrees to be bound by the
terms and conditions of the Intercreditor Agreement and agrees that it shall not
take any action that is prohibited by the terms of the Intercreditor
Agreement.  No further consent or approval on the part of any Lender is or will
be required in connection with the performance by Agent of the Intercreditor
Agreement.  Parent, Borrowers, Agent and Lenders acknowledge that the exercise
of certain of Agent’s rights and remedies hereunder are subject to and
restricted by, the provisions of the Intercreditor Agreement.  Except as
specified herein, nothing contained in the Intercreditor Agreement shall be
deemed to modify any of the provisions of this Agreement and the other Loan
Documents, which, as among Parent, Borrowers, Agent and Lenders shall remain in
full force and effect.
 

[Remainder of page intentionally left blank; signatures begin on following page]
 
 
 
99

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IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the
date set forth above.
 
PARENT:

CONN’S, INC.

By:   /s/ Michael J.
Poppe                                                        
Name:     Michael J.
Poppe                                                       
Title: Executive Vice-President and Chief Financial Officer
Address:
3295 College Street
Beaumont, Texas  77701
Attn:      Chief Financial
Officer                                               
Telecopy: 
409-835-7069                                                           

BORROWERS:

CONN APPLIANCES, INC.,
a Texas corporation

By:  /s/ Michael J.
Poppe                                                         
Name:  Michael J. Poppe                                                         
Title:  Chief Financial
Officer                                                  
Address:
3295 College Street
Beaumont, Texas  77701
Attn:      Chief Financial Officer                                              
Telecopy: 409-835-7069                                                          
 

 
 
Amended and Restated Loan and Security Agreement
 
 
 

--------------------------------------------------------------------------------

 
 
CONN CREDIT I, LP,
a Texas limited partnership

By:          Conn Credit Corporation, Inc.,
a Texas corporation,
its sole general partner

By:      /s/ Michael J.
Poppe                                                    
Name:    Michael J. Poppe                                                       
Title:  Chief Financial
Officer                                                  
Address:
3295 College Street
Beaumont, Texas  77701
Attn:      Chief Financial Officer                                              
Telecopy: 409-835-7069      
                                                    

CONN CREDIT CORPORATION, INC.,
a Texas corporation

By:        /s/ Michael J.
Poppe                                                  
Name:   Michael J. Poppe                                                        
Title:  Chief
Financial Officer                                                  
Address:
3295 College Street
Beaumont, Texas  77701
Attn:      Chief Financial Officer                                              
Telecopy:   409-835-7069                                                        
 

 
 
 
 
 
 
Amended and Restated Loan and Security Agreement
 
 
 

--------------------------------------------------------------------------------

 
 
AGENT AND LENDERS:

BANK OF AMERICA, N.A.,
as Agent and Lender

By:       /s/ Matthew R. Van Steenhuyse                               
Name:  Matthew R. Van Steenhuyse                                    
Title:   Senior Vice President                                                  
Address:
55 South Lake Avenue, Suite 900
Pasadena, California 91101
Attn:       Matthew R. Van Steenhuyse
Telecopy:  _________________

 
 
 
 
 
 
 
 
Amended and Restated Loan and Security Agreement
 
 
 

--------------------------------------------------------------------------------

 
 
 
JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, as Lender, Co-Syndication Agent,
Joint Book Runner, Co-Lead Arranger

By:       /s/ T.C.
Wilde                                                                
Name:   T. C. Wilde
Title:     Vice President
Address:
2200 Ross Avenue, 9th Floor
Dallas, Texas  75201
Attn:       T. C. Wilde
Telecopy:  (214) 965-2375
 
 
 
 
 
 
Amended and Restated Loan and Security Agreement
 
 
 

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CAPITAL ONE, N.A.,
as Lender and Co-Documentation Agent

By:   /s/ Lori S. Mitchell                 
                                       
Name:  Loris S. Mitchell                       
                                 
Title:  Executive Vice President                                             
Address:
Specialty Finance Lender Group
440 Third St.
Baton Rouge, Louisiana  70802
Attn:       Lori S. Mitchell
Office:    (225) 381-2260
 
 
 
 
 
 
Amended and Restated Loan and Security Agreement
 
 
 

--------------------------------------------------------------------------------

 
 
 
UNION BANK, N.A. fka UNION BANK OF
CALIFORNIA, N.A.,
as Lender

By:     /s/ Nadia Mitevska  
                                                    
Name:   Nadia Mitevska                                                         
Title:    Vice
President                                                             
Address:
   Commercial Finance Division
400 California St., 8th Floor
San Francisco, CA 94104
Attn: Nadia Mitevska, Vice President/
Senior Relationship Manager
Telecopy: 415-765-2170
 
 
 
 
 
 
Amended and Restated Loan and Security Agreement
 
 
 

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COMPASS BANK,
as Lender

By:    /s/ Frank Carvelli       
                                                  
Name:  Frank Carvelli                                                   
         
Title:  Vice
President                                                              
Address:
     24 Greenway Plaza, Ste. 1403                           
      Houston, TX 77046                                          
Attn:            Frank Carvelli                           
                         
Telecopy:
 
 
 
 
 
 
Amended and Restated Loan and Security Agreement
 
 
 

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COMPASS BANK, successor in interest to
GUARANTY BANK
as Lender
 
By:       /s/ Frank Carvelli       
                                                  
Name:  Frank Carvelli                                                   
         
Title:    Vice
President                                                              
Address:
     24 Greenway Plaza, Ste. 1403                           
      Houston, TX 77046                                          
Attn:            Frank Carvelli                           
                         
Telecopy:
 
 
 
 
 
 
Amended and Restated Loan and Security Agreement
 
 
 

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FIRST TENNESSEE BANK NATIONAL
ASSOCIATION, as Lender

By:        /s/ R. Keith
Kirby                                                    
Name:    R. Keith Kirby                                                         
Title:    Vice
President                                                           
Address:
P.O. Box 84
Memphis, Tennessee  38101
Attn:       R. Keith Kirby, Vice President
Telecopy:  (901) 523-4718
 
 
 
 
 
 
Amended and Restated Loan and Security Agreement
 
 
 

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WELLS FARGO PREFERRED CAPITAL, INC.,
as Lender, and Co-Syndication Agent

By:       /s/ Casey P. Johnson                                                
Name:   Casey P. Johnson                                                     
Title:  Senior Vice President                                                  
Address:
 
800 Walnut Street
Des Moines, Iowa 50309

Attn:       Mr. Casey P. Johnson, Senior Vice President
Telecopy:  (515) 557-5035
 
 
 
 
 
 
Amended and Restated Loan and Security Agreement
 
 
 

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REGIONS BANK,
as Lender and Co-Documentation Agent

By:         /s/ Jason
Nichols                                                     
Name:    Jason Nichols                                                          
Title:      Vice
President                                                          
Address:
5001 Spring Valley Road, Suite 153W                 
Dallas, TX 75219                                                     
Attn:      Jason Nichols, Vice
President                                                                
Telecopy:     972-383-7505                                                     
 
 
 
 
 
 
Amended and Restated Loan and Security Agreement
 
 
 

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AMEGY BANK,
as Lender

By:     /s/ Mark L. Wayne                                                      
Name:    Mark L. Wayne                                                        
Title:   Senior Vice President                                                 
Address:
       _______________________________
       _______________________________
Attn:        _______________________________   
Telecopy:   ______________________________                                                   
 
 
 
 
 
 
Amended and Restated Loan and Security Agreement
 
 
 

--------------------------------------------------------------------------------

 
 
COMMUNITYBANK OF TEXAS, N.A.,
as Lender

By:      /s/ Mike Peyton     
                                                    
Name:    Mike Peyton                                                            
Title:  
EVP                                                                              
Address:
5999 Delaware                                                         
Beaumont, Texas 77706                                         
Attn:       Mike
Peyton                                                          
Telecopy:  409-861-7218                                                        
 
 
 
 
 
 
Amended and Restated Loan and Security Agreement
 
 
 

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EXHIBIT A
 
to
 
Amended and Restated
Loan and Security Agreement
 
REVOLVER NOTE
 

 _____________, 2010  $________________

 
CONN APPLIANCES, INC., a Texas corporation, CONN CREDIT I, LP, a Texas limited
partnership, and CONN CREDIT CORPORATION, INC., a Texas corporation
(collectively, “Borrowers”), for value received, hereby unconditionally promise
to pay, on a joint and several basis, to the order of
____________________________ (“Lender”), the principal sum of
______________________________ DOLLARS ($___________), or such lesser amount as
may be advanced by Lender as Revolver Loans and owing as LC Obligations from
time to time under the Loan Agreement described below, together with all accrued
and unpaid interest thereon.  Terms are used herein as defined in the Amended
and Restated Loan and Security Agreement dated as of November __, 2010, among
Borrowers, Bank of America, N.A., as Agent, Lender, and certain other financial
institutions, as such agreement may be amended, modified, renewed or extended
from time to time (“Loan Agreement”).
 
Principal of and interest on this Note from time to time outstanding shall be
due and payable as provided in the Loan Agreement.  This Note is issued pursuant
to and evidences Revolver Loans and LC Obligations under the Loan Agreement, to
which reference is made for a statement of the rights and obligations of Lender
and the duties and obligations of Borrowers.  The Loan Agreement contains
provisions for acceleration of the maturity of this Note upon the happening of
certain stated events, and for the borrowing, prepayment and reborrowing of
amounts upon specified terms and conditions.
 
The holder of this Note is hereby authorized by Borrowers to record on a
schedule annexed to this Note (or on a supplemental schedule) the amounts owing
with respect to Revolver Loans and LC Obligations, and the payment
thereof.  Failure to make any notation, however, shall not affect the rights of
the holder of this Note or any obligations of Borrowers hereunder or under any
other Loan Documents.
 
Time is of the essence of this Note.  Each Borrower and all endorsers, sureties
and guarantors of this Note hereby severally waive demand, presentment for
payment, protest, notice of protest, notice of intention to accelerate the
maturity of this Note, diligence in collecting, the bringing of any suit against
any party, and any notice of or defense on account of any extensions, renewals,
partial payments, or changes in any manner of or in this Note or in any of its
terms, provisions and covenants, or any releases or substitutions of any
security, or any delay, indulgence or other act of any trustee or any holder
hereof, whether before or after maturity.  Borrowers jointly and severally agree
to pay, and to save the holder of this Note harmless against, any liability for
the payment of all costs and expenses (including without limitation reasonable
attorneys’ fees) if this Note is collected by or through an attorney-at-law.
 
 
 
Exhibit A
1

--------------------------------------------------------------------------------

 
 
 
In no contingency or event whatsoever shall the amount paid or agreed to be paid
to the holder of this Note for the use, forbearance or detention of money
advanced hereunder exceed the highest lawful rate permitted under Applicable
Law.  If any such excess amount is inadvertently paid by Borrowers or
inadvertently received by the holder of this Note, such excess shall be returned
to Borrowers or credited as a payment of principal, in accordance with the Loan
Agreement.  It is the intent hereof that Borrowers not pay or contract to pay,
and that holder of this Note not receive or contract to receive, directly or
indirectly in any manner whatsoever, interest in excess of that which may be
paid by Borrowers under Applicable Law.
 
This Note shall be governed by the laws of the State of California, without
giving effect to any conflict of law principles (but giving effect to federal
laws relating to national banks).
 
IN WITNESS WHEREOF, this Revolver Note is executed as of the date set forth
above.
 
Attest:
 
 
 
____________________________________________
Secretary
CONN APPLIANCES, INC.,
a Texas corporation
 
 
By:                                                               
Name:_________________________
Title:                                                               
   
Attest:
 
 
 
____________________________________________
Secretary
CONN CREDIT I, LP,
a Texas limited partnership
 
By:Conn Credit Corporation, Inc.,
a Texas corporation,
its General Partner
By:                                                          
Name:                                                      
Title:                                                        
   
Attest:
 
 
 
____________________________________________
Secretary
CONN CREDIT CORPORATION, INC.,
a Texas corporation
 
 
By:                                                               
Name:_________________________
Title:                                                            

 
 
 
Exhibit A
2

--------------------------------------------------------------------------------

 

 
EXHIBIT B
 
to
 
Amended and Restated
Loan and Security Agreement
 
ASSIGNMENT AND ACCEPTANCE
 
Reference is made to the Amended and Restated Loan and Security Agreement dated
as of November __, 2010, as amended (“Loan Agreement”), among CONN APPLIANCES,
INC., a Texas corporation, CONN CREDIT I, LP, a Texas limited partnership, and
CONN CREDIT CORPORATION, INC., a Texas corporation (collectively, “Borrowers”),
BANK OF AMERICA, N.A., as agent (“Agent”) for the financial institutions from
time to time party to the Loan Agreement (“Lenders”), and such Lenders.  Terms
are used herein as defined in the Loan Agreement.
 
______________________________________ (“Assignor”) and ______________________
_____________ (“Assignee”) agree as follows:
 
1.           Assignor hereby assigns to Assignee and Assignee hereby purchases
and assumes from Assignor (a) a principal amount of $________ of Assignor’s
outstanding Revolver Loans and $___________ of Assignor’s participations in LC
Obligations, and (b) the amount of $__________ of Assignor’s Revolver Commitment
(which represents ____% of the total Revolver Commitments), (the foregoing items
being, collectively, the “Assigned Interest”), together with an interest in the
Loan Documents corresponding to the Assigned Interest.  This Agreement shall be
effective as of the date (“Effective Date”) indicated in the corresponding
Assignment Notice delivered to Agent, provided such Assignment Notice is
executed by Assignor, Assignee, Agent and Borrower Agent, if applicable.  From
and after the Effective Date, Assignee hereby expressly assumes, and undertakes
to perform, all of Assignor’s obligations in respect of the Assigned Interest,
and all principal, interest, fees and other amounts which would otherwise be
payable to or for Assignor’s account in respect of the Assigned Interest shall
be payable to or for Assignee’s account, to the extent such amounts accrue on or
after the Effective Date.
 
2.           Assignor (a) represents that as of the date hereof, prior to giving
effect to this assignment, its Revolver Commitment is $__________, the
outstanding balance of its Revolver Loans and participations in LC Obligations
is $__________; (b) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Agreement or any other instrument or document furnished pursuant thereto, other
than that Assignor is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and clear of any adverse
claim; and (c) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of Borrowers or the performance by
Borrowers of their obligations under the Loan Documents.  [Assignor is attaching
the Note[s] held by it and requests that Agent exchange such Note[s] for new
Notes payable to Assignee [and Assignor].]
 
 
 
Exhibit B
1

--------------------------------------------------------------------------------

 
 
 
3.           Assignee (a) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance; (b) confirms that it has received
copies of the Loan Agreement and such other Loan Documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Acceptance; (c) agrees that it shall, independently and
without reliance upon Assignor and based on 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 the Loan Documents; (d) confirms that it is an
Eligible Assignee; (e) appoints and authorizes Agent to take such action as
agent on its behalf and to exercise such powers under the Loan Agreement as are
delegated to Agent by the terms thereof, together with such powers as are
incidental thereto; (f) agrees that it will observe and perform all obligations
that are required to be performed by it as a “Lender” under the Loan Documents;
and (g) represents and warrants that the assignment evidenced hereby will not
result in a non-exempt “prohibited transaction” under Section 406 of ERISA.
 
4.           This Agreement shall be governed by the laws of the State of
California.  If any provision is found to be invalid under Applicable Law, it
shall be ineffective only to the extent of such invalidity and the remaining
provisions of this Agreement shall remain in full force and effect.
 
5.           Each notice or other communication hereunder shall be in writing,
shall be sent by messenger, by telecopy or facsimile transmission, or by
first-class mail, shall be deemed given when sent and shall be sent as follows:
 
 
(a)
If to Assignee, to the following address (or to such other address as Assignee
may designate from time to time):

 
__________________________
 
__________________________
 
__________________________
 
 
(b)
If to Assignor, to the following address (or to such other address as Assignor
may designate from time to time):

 
__________________________
 
__________________________
 
__________________________
 
Payments hereunder shall be made by wire transfer of immediately available
Dollars as follows:
 
 
 
 
 
 
Exhibit B
2

--------------------------------------------------------------------------------

 
 
 
 
If to Assignee, to the following account (or to such other account as Assignee
may designate from time to time):
 
______________________________
 
______________________________
 
ABA No._______________________
 
______________________________
 
Account No.____________________
 
Reference:  _____________________
 
If to Assignor, to the following account (or to such other account as Assignor
may designate from time to time):
 
______________________________
 
______________________________
 
ABA No._______________________
 
______________________________
 
Account No.____________________
 
Reference:  _____________________

 
IN WITNESS WHEREOF, this Assignment and Acceptance is executed as of
_____________.
 
 

   
 _______________________________
(“Assignee”)
 
By                                                                    
    Title:
_______________________________
(“Assignor”)
 
By                                                                    
    Title:

 
 
 
 
 
 
Exhibit B
3

--------------------------------------------------------------------------------

 

 
EXHIBIT C
 
to
 
Amended and Restated
Loan and Security Agreement
 
ASSIGNMENT NOTICE
 
Reference is made to (1) the Amended and Restated Loan and Security Agreement
dated as of November __, 2010, as amended (“Loan Agreement”), among CONN
APPLIANCES, INC., a Texas corporation, CONN CREDIT I, LP, a Texas limited
partnership, and CONN CREDIT CORPORATION, INC., a Texas corporation
(collectively, “Borrowers”), BANK OF AMERICA, N.A., as agent (“Agent”) for the
financial institutions from time to time party to the Loan Agreement
(“Lenders”), and such Lenders; and (2) the Assignment and Acceptance dated as of
____________, 20__ (“Assignment Agreement”), between __________________
(“Assignor”) and ____________________ (“Assignee”).  Terms are used herein as
defined in the Loan Agreement.
 
Assignor hereby notifies Borrowers and Agent of Assignor’s intent to assign to
Assignee pursuant to the Assignment Agreement (a) a principal amount of
$________ of Assignor’s outstanding Revolver Loans and $___________ of
Assignor’s participations in LC Obligations, and (b) the amount of $__________
of Assignor’s Revolver Commitment (which represents ____% of the total Revolver
Commitments) (the foregoing items being, collectively, the “Assigned Interest”),
together with an interest in the Loan Documents corresponding to the Assigned
Interest.  This Agreement shall be effective as of the date (“Effective Date”)
indicated below, provided this Assignment Notice is executed by Assignor,
Assignee, Agent and Borrower Agent, if applicable.  Pursuant to the Assignment
Agreement, Assignee has expressly assumed all of Assignor’s obligations under
the Loan Agreement to the extent of the Assigned Interest, as of the Effective
Date.
 
For purposes of the Loan Agreement, Agent shall deem Assignor’s Revolver
Commitment to be reduced by $_________, and Assignee’s Revolver Commitment to be
increased by $_________.
 
The address of Assignee to which notices and information are to be sent under
the terms of the Loan Agreement is:
 
________________________
 
________________________
 
________________________
 
________________________
 
The address of Assignee to which payments are to be sent under the terms of the
Loan Agreement is shown in the Assignment and Acceptance.
 
This Notice is being delivered to Borrowers and Agent pursuant to Section 13.3
of the Loan Agreement.  Please acknowledge your acceptance of this Notice by
executing and returning to Assignee and Assignor a copy of this Notice.
 
 
 
 
Exhibit C
1

--------------------------------------------------------------------------------

 
 
 
 
IN WITNESS WHEREOF, this Assignment Notice is executed as of _____________.
 
 

   
 _______________________________
(“Assignee”)
 
By                                                                    
    Title:
_______________________________
(“Assignor”)
 
By                                                                    
    Title:

 
 
ACKNOWLEDGED AND AGREED,
AS OF THE DATE SET FORTH ABOVE:
 
 
BORROWER AGENT:*
 
CONN APPLIANCES, INC.,
a Texas corporation
 
 
By                                                                               
Title:
 
* No signature required if Assignee is a Lender, U.S.-based Affiliate of a
Lender or Approved Fund, or if an Event of Default exists.
 
BANK OF AMERICA, N.A., as Agent
 
By                                                                               
Title:
 
 
 
 
 
 
 
Exhibit C
2

--------------------------------------------------------------------------------

 
 
 
SCHEDULE 1.1
 
to
 
Amended and Restated
Loan and Security Agreement
 
REVOLVER COMMITMENTS OF LENDERS
 
Lender
Revolver Commitment
Bank of America, N.A.
$75,000,000
JPMorgan Chase
Bank, National Association
$65,000,000
Wells Fargo Preferred Capital, Inc.
$40,000,000
Capital One, N.A.
$40,000,000
BBVA Compass Bank
$15,000,000
BBVA Compass Bank, as successor in interest to Guaranty Bank
$25,000,000
Regions Bank
$40,000,000
Union Bank, N.A.
$25,000,000
First Tennessee Bank National Association
$20,000,000
Amegy Bank
$20,000,000
CommunityBank of Texas, N.A.
$10,000,000
Total Revolver Commitments
$375,000,000

 
 
 
 
 
 
 
 
 
Schedule 1.1 to Amended and Restated Loan and Security Agreement
Commitments Of Lenders
1

--------------------------------------------------------------------------------

 

 
SCHEDULE 1.1 E(1)
 
To
 
Amended and Restated
Loan and Security Agreement
 
EXISTING BANK PRODUCTS
 
 
BANK NAME
BANK PRODUCTS
   
Bank of America Bank
Depository Accounts and other Cash Management Services
     
Merchant Card Services for MasterCard and Visa including authorization of
Discover and AMEX
       
CapitalOne Bank
Depository Accounts and other Cash Management Services
     
Hedge Agreements :
 
$ 15MM LIBOR Floating to Fixed SWAP due 4/2011
 
$ 10MM LIBOR Floating to Fixed SWAP due 7/2011
       
JP Morgan Chase Bank
Depository Accounts and other Cash Management Services
       
BBVA Compass Bank
Depository Accounts and other Cash Management Services
       
Wells Fargo Bank
Depository Accounts and other Cash Management Services
     
Leases for 17 Service Vans final payment due 3/2012
     
Leases for 11 Service Vans final payment due 6/2013
     
Commercial Insurance Brokerage Services
       
Community Bank of Texas
Depository Accounts and other Cash Management Services

 
 
 
 
 
 
 
 
 
 
Schedule 1.1E(1) to Amended and Restated Loan and Security Agreement
Existing Bank Products
1

--------------------------------------------------------------------------------

 
 
 
SCHEDULE 1.1E(2)
 
To
 
Amended and Restated
Loan and Security Agreement
 
EXISTING LETTERS OF CREDIT
 
 
1.
$1,575,000.00 Letter of Credit issued by JPMorgan Chase Bank, N.A. (L/C
Reference No. TPTS397519).
   
2.
$150,000.00 Letter of Credit issued by JPMorgan Chase Bank, N.A. (L/C Reference
No. D617706).

 
 
 
 
 
 
 
Schedule 1.1E(2) to Amended and Restated Loan and Security Agreement
Existing Letters of Credit
1

--------------------------------------------------------------------------------

 
 
 
SCHEDULE 1.1(L)
 
To
 
Amended and Restated Loan and Security Agreement
 
LEASEHOLD MORTGAGES
 
 
Lease No.
Lease Name
Lease City
Lease State
11002
Gateway
Beaumont
TX
11005
Port Plaza Centre
Port Arthur
TX
11006
Lake Charles
Lake Charles
LA
11007
New Iberia
New Iberia
LA
11008
Lafayette - Karam Shopping Center
Lafayette
LA
11009
Baton Rouge - Airline
Baton Rouge
LA
11011
Ambassador Caffrey
Lafayette
LA
11012
Parkdale
Beaumont
TX
11014
Orange
Orange
TX
11016
Houston - N. Freeway
Houston
TX
11018
Houston - Gulf Freeway
Houston
TX
11021
Fry Road
Katy
TX
11023
Katy Freeway
Houston
TX
11024
Humble
Humble
TX
11025
Willowbrook
Houston
TX
11026
Uvalde
Houston
TX
11027
Northline Mall
Houston
TX
11028
Siegen Lane
Baton Rouge
LA
11030
Stella Link
Houston
TX
11041
McAllen
McAllen
TX
11042
Harlingen
Harlingen
TX
11043
Brownsville
Brownsville
TX
11048
Round Rock
Round Rock
TX
11061
SW Military
San Antonio
TX
11062
Sports Authority
San Antonio
TX
11064
West Commerce
San Antonio
TX
11065
The Vineyards
San Antonio
TX
11066
South Brook
Austin
TX
11067
Capital Plaza
Austin
TX
11068
Windsor Park
San Antonio
TX
11070
Gulf Freeway
Houston
TX
11071
Northway Shopping Center
Houston
TX
11072
Pinoak
Houston
TX
11073
Conroe
Conroe
TX
11075
SE Military
San Antonio
TX
11077
Garth Road
Baytown
TX
11078
West Oaks
Houston
TX
11079
Lufkin
Lufkin
TX
11081
Royal Lane
Dallas
TX
11085
Ridgemare
White Settlement
TX
11086
Plano
Plano
TX
11087
Cedar Hill
Cedar Hill
TX
11090
Addison
Dallas
TX

 
 
Schedule 1.1L to Amended and Restated Loan and Security Agreement
Leasehold Mortgages
1 

--------------------------------------------------------------------------------

 
 
11091
Euless
Euless
TX
11092
Hulen
Fort Worth
TX
11094
Arlington
Arlington
TX
11096
Pavillions
San Antonio
TX
11097
Oakcliff
Dallas
TX
11102
Pearland
Pearland
TX
11103
Grapevine
Grapevine
TX
11104
North Irving
Irving
TX
11105
Pasadena
Pasadena
TX
11107
Denton
Denton
TX
11108
Eastchase
Fort Worth
TX
11110
Burleson
Fort Worth
TX
11111
Midland
Oklahoma City
OK
11112
Cypresswood
Spring
TX
11114
Rosenberg
Rosenberg
TX
11115
Edmond Plaza
Edmond
OK
11116
Walnut Square
Oklahoma City
OK
12001
Houston Warehouse
Houston
TX
12003
Beaumont Warehouse
Beaumont
TX
18502
Corporate Offices
Beaumont
TX
12049
Harlingen Crossdock
Harlingen
TX
83008
Houston Service
Houston
TX
83080
Dallas Service
Dallas
TX

 
 
 
Schedule 1.1L to Amended and Restated Loan and Security Agreement
Leasehold Mortgages
2

--------------------------------------------------------------------------------

 
 
 
SCHEDULE 7.1(j)
 
to
 
Amended and Restated
Loan and Security Agreement
 
EQUITY INTERESTS
 
 
Conn Appliances, Inc.

Name
Percentage Interest Owned
CAI Holding Co.
100%, as its sole shareholder
CAI Credit Insurance Agency, Inc.
100%, by CAI Holding Co.
Conn Credit Corporation, Inc.
100%, by CAI Holding Co.
CAIAIR, Inc.
100%, as its sole shareholder
Conn Funding II GP, LLC
100%, as its sole member  (to be dissolved following closing)
Conn Funding II, L.P.
1%, by Conn Funding II GP, LLC (to be dissolved following closing);
99%, by Conn Appliances, LLC  (to be dissolved following closing)
Conn Appliances, LLC
100%, as its sole member  (to be dissolved following closing)

Conn Credit Corporation, Inc.

Name
Percentage Interest Owned
Conn Lending, LLC
100%, as its sole member
Conn Credit I, LP
1%, as its sole general partner

Conn Credit I, LP

NONE
 
 
 
 
 
Schedule 7.1(j) to Amended and Restated Loan and Security Agreement
Equity Interests
1

--------------------------------------------------------------------------------

 
 
SCHEDULE 7.3
 
to
 
Amended and Restated
Loan and Security Agreement
 
REAL ESTATE
 
 
Address
City
State
Zip
8201 South Gessner
Houston
Texas
77036
8317 North 10th Street
 
McAllen
Texas
78504
2021 Town East Blvd.
#1049 & #1050
Mesquite
Texas
75149
2900 Oak Springs Road
Austin
Texas
78702
124 Bertrand Drive
Lafayette
Louisiana
70506

 
 
 
 
 
Schedule 7.3 to Amended and Restated Loan and Security Agreement
Real Estate
1

--------------------------------------------------------------------------------

 
 
 
SCHEDULE 8.5
 
to
 
Amended and Restated
Loan and Security Agreement
 
DEPOSIT ACCOUNTS
 
 
Conn Appliances, Inc.

Depository Bank
Type of Account
 
BANK OF AMERICA
Store Deposit Account
 
BANK OF AMERICA
Letter of Credit Deposit Account
 
BANK OF AMERICA
LC Disbursement Account
 
CAPITALONE
Controlled Disbursement Account
 
CAPITALONE
General Operating Account
 
CAPITALONE
Payroll Account
 
CAPITALONE
Payment Center Account
 
CAPITALONE
Credit Card Settlement Account
 
CAPITALONE
Louisiana Store Depository Account
 
COMMUNITY BANK OF TEXAS
Store Deposit Account
 
JPMORGAN CHASE
Depository Account
 
JPMORGAN CHASE
General Operating Account
 
SUNTRUST
General Corporate Account
 
BBVA COMPASS BANK
Store Deposit Account
 
WELLS FARGO BANK
Store Deposit Account
 
WOODFOREST
Store Deposit Account
 

Conn Credit Corporation, Inc.

NONE.

Conn Credit I, LP

NONE.
 
 
 
Schedule 8.5 to Amended and Restated Loan and Security Agreement
Deposit Accounts
1

--------------------------------------------------------------------------------

 

 
SCHEDULE 8.6.1
 
to
 
Amended and Restated
Loan and Security Agreement
 
CREDIT CARD AGREEMENTS
 
 
1.
Card Acceptance Agreement for Participating Appliance/Electronic Industry
Dealers by and between GE Money Bank and Conn Appliances, Inc.
   
2.
Merchant Agreement by and between Bank of America, N.A. and Conn Appliances,
Inc.
   
3.
Merchant Services Agreement by and between DFS Services LLC and Conn Appliances,
Inc.
   
4.
PayPal User Agreement by and between PayPal and Conn Appliances, Inc.
   
5.
Agreement for American Express Card Acceptance by and between American Express
Travel Related Services Company, Inc. and Conn Appliances, Inc.
   
6.
Merchant Agreement by and between Phoenix Payment Systems, Inc. dba Electronic
Payment Exchange (EPX) and Conn Appliances, Inc

 
 
 
 
 
 
Schedule 8.6.1 to Amended and Restated Loan and Security Agreement
Credit Card Agreements
1

--------------------------------------------------------------------------------

 

 
 
SCHEDULE 8.7.1
 
to
 
Amended and Restated
Loan and Security Agreement
 
BUSINESS LOCATIONS
 
 
1.
Parent and Borrowers currently have the following business locations, and no
others:
     
Chief Executive Office:
         
Conn’s, Inc.:
3295 College Street, Beaumont, Texas  77701.
       
Conn Appliances, Inc.:
3295 College Street, Beaumont, Texas  77701.
       
Conn Credit Corporation, Inc.:
3295 College Street, Beaumont, Texas  77701.
       
Conn Credit I, LP:
3295 College Street, Beaumont, Texas  77701.
       
Other Locations:
See Addendum 8.7.1 attached hereto.
           
2.
In the five years preceding the Closing Date, Parent and Borrowers have had no
office or place of business located in any county other than as set forth above,
except:
       
NONE.
             
3.
Each of Subsidiary of Borrowers currently has the following business locations,
and no others:
     
Chief Executive Office:
         
CAI Holding Co.:
3295 College Street, Beaumont, Texas  77701.
       
CAIAIR, Inc.:
3295 College Street, Beaumont, Texas  77701.
       
CAI Credit Insurance Agency, Inc.:
3295 College Street, Beaumont, Texas  77701.
       
Conn Lending, LLC:
103 Foulk Rd., Ste. 202, Wilmington, DE  19803.
       
Conn Funding II GP, L.L.C.:
3295 College Street, Beaumont, Texas  77701.
       
Conn Appliances, LLC:
103 Foulk Rd., Ste. 202, Wilmington, DE  19803.
       
Conn Funding II, L.P.:
3295 College Street, Beaumont, Texas  77701.
       
Other Locations:
NONE.

 
 
Schedule 8.7.1 to Amended and Restated Loan and Security Agreement
Business Locations
1

--------------------------------------------------------------------------------

 
 
4.
In the five years preceding the Closing Date, no Subsidiary of each Borrower has
had an office or place of business located in any county other than as set forth
above, except:
       
NONE.
             
5.
The following bailees, warehouseman, similar parties and consignees hold
inventory of a Borrower or its Subsidiary:
       
NONE.
 

 
 
 
 
 
Schedule 8.7.1 to Amended and Restated Loan and Security Agreement
Business Locations
2

--------------------------------------------------------------------------------

 
 
 
Addendum 8.7.1

Business Locations
Name
Address
City
State
Zip
Gateway
108 Gateway Shopping Center
Beaumont
TX
77701
Port Arthur
7855 Memorial Blvd.
Port Arthur
TX
77642
Lake Charles
3129 Highway 14
Lake Charles
LA
70601
New Iberia
820 H East Admiral Doyle
New Iberia
LA
70560
Willow Street
221 B. West Willow Street
Lafayette
LA
70501
Airline
8888 Airline Highway
Baton Rouge
LA
70815
Ambassador Caffrey
3559 Ambassador Caffrey
Lafayette
LA
70506
Parkdale
4326 Dowlen Road
Beaumont
TX
77706
Orange
180 Strickland Drive
Orange
TX
77630
N. Freeway
9700 North Freeway
Houston
TX
77037
Gessner
8201 South Gessner
Houston
TX
77036
Gulf Freeway
10900 I-H 45 South
Houston
TX
77075
Fry Rd
20051 Katy Freeway
Katy
TX
77450
Katy Frwy
9960 Katy Freeway
Houston
TX
77055
59 @ 1960
19633 A Highway 59
Humble
TX
77338
Willowbrook
7911 C FM 1960
Houston
TX
77070
Uvalde
13337 1-H 10 East
Houston
TX
77015
Northline Mall
4446 N. Freeway
Houston
TX
77022
Siegen Lane
6835 Siegen Lane
Baton Rouge
LA
70806
Nasa Rd
1101 W. Nasa Road 1
Wesbster
TX
77598
McAllen
724 East Expressway 83
McAllen
TX
78501
Harlingen
706 S. Dixieland Road
Harlingen
TX
78550
Brownsville
4465 N. Expressway 77/83
Brownsville
TX
78520
Lakeline
11101 Pecan Park Blvd.
Cedar Park
TX
78613
Anderson Ln
2531 West Anderson Lane
Austin
TX
78757
Bandera
11751 Bandera Road
San Antonio
TX
78249
Corpus
4818 S. Padre Island Drive
Corpus Christi
TX
78411
Round Rock
1601 South 1-H 35
Round Rock
TX
78664
SW Military
2514 SW Military Drive
San Antonio
TX
78221
N Loop 410
4999 NW Loop 410
San Antonio
TX
78229
West Commerce
4022 West Commerce
San Antonio
TX
78207
The Vineyards
1211 N Loop 1604 W
San Antonio
TX
78258
S. Brook
6425 S. 1-H 35
Austin
TX
78744
Capital Plaza
5441 1-H 35 North
Austin
TX
78723
Windsor Park
7730 I-H 35 North
San Antonio
TX
78218
DeZavala Crossing
5219 DeZavala
San Antonio
TX
78249
Gulf Freeway
6888 Gulf Freeway
Houston
TX
77087
Northwest Freeway
11051 Northwest Freeway
Houston
TX
77092
Pinoak
5505 W. Loop South
Houston
TX
77401
Conroe
1420 W Loop 336 N
Conroe
TX
77304
The Woodlands
19075 I-H 45 N
Shenandoah
TX
77385
SE Military
3143 SE Military Drive
San Antonio
TX
78223
Sugarland
15235 SW Freeway
Sugarland
TX
77478
Garth Rd
5010 Garth Road
Baytown
TX
77521
West Oaks
2665 South Highway 6
Houston
TX
77082
Lufkin
3045 S. John Redditt Road
Lufkin
TX
75901
Royal Ln
11250 North Central Expressway
Dallas
TX
75243
Richardson
1300 East Beltline Road
Richardson
TX
75081
Lewisville
2422 S. Stemmons Freeway
Lewisville
TX
75067

 
 
 

--------------------------------------------------------------------------------

 
 
Mesquite
2021 Town East Blvd.
Mesquite
TX
75149
Ridgemare
1705 S. Cherry Lane
White Settlement
TX
76108
Plano
1021 North Central Expressway
Plano
TX
75075
Cedar Hill
229 E FM Road 1382
Cedar Hill
TX
75104
Hurst
747 N. Loop 820
Hurst
TX
76053
Wheatland
2984 W. Wheatland Road
Dallas
TX
75237
Addison
5515 Arapaho Road
Dallas
TX
75248
Euless
1201 W. Airport Freeway
Euless
TX
76040
Hulen
4617 S. Hulen Street
Fort Worth
TX
76132
Arlington
137 Merchants Row
Arlington
TX
76015
Pavilions
25 NE Loop 410
San Antonio
TX
78216
Pinnacle Pt
4351 DFW Turnpike
Dallas
TX
75211
Pearland
2800 E. Broadway
Pearland
TX
77581
Grapevine
1217 West Hwy 114
Grapevine
TX
76051
N. Irving
2800 Ranch Trail Drive
Irving
TX
75063
Pasadena
3931 Fairway Plaza Drive
Pasadena
TX
77505
N. McAllen
8317 North 10th Street
McAllen
TX
78504
Denton
2315 Colorado Boulevard
Denton
TX
76205
Eastchase
8400 East Freeway
Fort Worth
TX
76120
Burleson
12850 South Freeway
Fort Worth
TX
76028
Midland
3315 NW Expressway
Oklahoma City
OK
73112
Cypresswood
19746 Interstate 45
Spring
TX
77373
Rosenberg
23835 Brazos Town Crossing
Rosenberg
TX
77469
Edmond
28 SE 15th Street
Edmond
OK
73013
Walnut Square
7301 S. Pennsylvania Avenue
Oklahoma City
OK
73159
Stella Link
(Houston Clearance)
9335 Stella Link
Houston
TX
77025
Mesquite Clearance
(Dallas Clearance)
2021 Town East Blvd.
Mesquite
TX
75149
San Antonio Call Center
5776 Stemmons Drive
San Antonio
TX
78238
Corporate Office
3295 College Street
Beaumont
TX
77701
Houston WH
8550-A Market Street
Houston
TX
77029
Houston Service
2425 Turning Basin
Houston
TX
77029
San Antonio WH/Service
4810 Eisenhaur
San Antonio
TX
78218
Dallas WH
1132 Valwood Parkway
Carrollton
TX
75006
Dallas Serv
4610-12 McEwen Road
Dallas
TX
75244
Beaumont WH
650 S. 23rd Street
Beaumont
TX
77701
Beaumont Service
2686 Laurel
Beaumont
TX
77702
Harlingen Crossdock
(part of Harlingen store)
710 S Dixieland Road
Harlingen
TX
78550
Corpus Christi Crossdock (part of Corpus Christi store)
4818 S. Padre Island Drive
Corpus Christi
TX
78411
Lafayette Crossdock
124 Bertrand Drive
Lafayette
LA
70506
Austin Crossdock
2900 Oak Springs Road
Austin
TX
78702

 
 
 
 

--------------------------------------------------------------------------------

 
 
SCHEDULE 9.1.4
 
to
 
Amended and Restated
Loan and Security Agreement
 
NAMES AND CAPITAL STRUCTURE
 
1.
The corporate names, jurisdictions of incorporation, and authorized and issued
Equity Interests of each Borrower and its Subsidiary are as follows:

 
Name
Jurisdiction
Number and Class of Authorized Shares
Number and Class of Issued Shares
Record Owner
Conn Appliances, Inc.,
as a Borrower
Texas
35,000,000 Common Shares.
300,000 Senior Preferred Shares.
Stock Certificate #158; 1,000 Shares.
Conn’s, Inc.
Conn Credit Corporation, Inc., as a Borrower
Texas
4,000,000 Common Shares.
Stock Certificate #1016; 56,500 Shares..
CAI Holding Co.
Conn Credit I, LP,
as a Borrower
Texas
N/A
N/A
1% Conn Credit Corporation, Inc.; 99% Conn Lending, LLC.
CAI Holding Co.
Delaware
10,000 Common Shares.
Stock Certificate #1; 8,000 Shares.
Conn Appliances, Inc.
CAIAIR, Inc.
Delaware
1,000,000 Common Shares.
Stock Certificate #1; 1,000 Shares.
Conn Appliances, Inc.
CAI Credit Insurance Agency, Inc.
Louisiana
100,000 Common Shares.
Stock Certificate #3; 1,000 Shares.
CAI Holding Co.
Conn Lending, LLC
Delaware
N/A
N/A
Conn Credit Corporation, Inc.
Conn Funding II GP, L.L.C.
Texas
N/A
N/A
Conn Appliances, Inc.
Conn Appliances, LLC
Delaware
N/A
N/A
Conn Appliances, Inc.
Conn Funding II, L.P.
Texas
N/A
N/A
1% Conn Funding GP II, L.L.C.; 99% Conn Appliances, LLC.

2.
All agreements binding on holders of Equity Interests of Borrowers and their
Subsidiaries with respect to such interests are as follows:

 
NONE.
 
 
Schedule 9.1.4 to Amended and Restated Loan and Security Agreement
Names and Capital Structure
 
1

--------------------------------------------------------------------------------

 
 
SCHEDULE 9.1.5
 
to
 
Amended and Restated
Loan and Security Agreement
 
FORMER NAMES AND COMPANIES
 
 
1.
Each Parent’s, Borrowers’ and its Subsidiary’s correct corporate name, as
registered with the Secretary of State of its state of incorporation, is shown
on Schedule 9.1.4.

 
 
2.
In the conduct of their businesses during five years preceding the Closing Date,
Parent, Borrowers and their Subsidiaries have used the following names:

 
Entity
Fictitious, Trade or Other Name
Conn’s, Inc., as Parent
None
   
Conn Appliances, Inc., as a Borrower
Conn Appliances
 
Conn’s
   
Conn Credit Corporation, Inc., as a Borrower
Conn Credit
 
Conn Credit Corp.
   
Conn Credit I, LP, as a Borrower
None
   
CAI Holding Co., as a Subsidiary
None
   
CAIAIR, Inc., as a Subsidiary
None
   
CAI Credit Insurance Agency, Inc., as a Subsidiary
None
   
Conn Lending, LLC, as a Subsidiary
None
   
Conn Funding II GP, L.L.C., as a Subsidiary
None
   
Conn Appliances, LLC, as a Subsidiary
None
   
Conn Funding II, L.P., as a Subsidiary
None
   

 
 
3.
In the five years preceding the Closing Date, no Borrower or its Subsidiary has
been the surviving corporation of a merger or combination, except:

 
 
a.
Merger of CAI, L.P., a Texas limited partnership, with and into Conn Appliances,
Inc., a Texas corporation, as surviving corporation, effective as of June 28,
2007.

 
 
b.
Merger of CAI Credit, L.L.C., a Delaware limited liability company, with and
into CAI Credit Insurance Agency, Inc., a Louisiana corporation, as surviving
corporation, effective as of June 28, 2007.

 
 
Schedule 9.1.5 to Amended and Restated Loan and Security Agreement
Former Names and Companies
 
1

--------------------------------------------------------------------------------

 
 
 
c.
Merger of Conn CC, L.P., a Texas limited partnership, and Conn Credit, L.L.C., a
Delaware limited liability company, with and into Conn Credit Corporation, Inc.,
a Texas corporation, as surviving corporation, effective as of June 28, 2007.

 
4.
In the five years preceding the Closing Date, no Borrower or its Subsidiary has
acquired any substantial part of the assets of any Person, except:

 
NONE.
 

 
Schedule 9.1.5 to Amended and Restated Loan and Security Agreement
Former Names and Companies
 
2

--------------------------------------------------------------------------------

 
 
SCHEDULE 9.1.11
 
to
 
Amended and Restated
Loan and Security Agreement
 
PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES
 
1.
Parent’s, Borrowers’ and their Subsidiaries’ patents:
 
NONE.

 
 
2.
Parent’s, Borrowers’ and their Subsidiaries’ trademarks:

 
Trademark
Owner
Status in Trademark Office
Federal Registration No.
Registration Date
CONN’S AWARD WINNING SERVICE SINCE 1890
 
 
Conn’s, Inc.
Registered
2,758,779
September 2, 2003
CONN’S
Conn’s, Inc.
Registered
2,824,660
March 23, 2004

 
 
3.
Parent’s, Borrowers’ and their Subsidiaries’ copyrights:
 
NONE.

 
 
4.
Parent’s, Borrowers’ and their Subsidiaries’ licenses (other than routine
business licenses, authorizing them to transact business in local
jurisdictions):
 
NONE.

 
 
 
Schedule 9.1.11 to Amended and Restated Loan and Security Agreement
Patents, Trademarks, Copyrights and Licenses
1

--------------------------------------------------------------------------------

 
 
 
SCHEDULE 9.1.14
 
to
 
Amended and Restated
Loan and Security Agreement
 
ENVIRONMENTAL MATTERS
 
 
NONE.
 
 
 
 
 
 
Schedule 9.1.14 to Amended and Restated Loan and Security Agreement
Environmental Matters
1

--------------------------------------------------------------------------------

 
 
 
 
SCHEDULE 9.1.15
 
to
 
Amended and Restated
Loan and Security Agreement
 
RESTRICTIVE AGREEMENTS
 
 
NONE.
 
 
 
 
 
 
 
 
Schedule 9.1.15 to Amended and Restated Loan and Security Agreement
Restrictive Agreements
1

--------------------------------------------------------------------------------

 
 

 
SCHEDULE 9.1.16
 
to
 
Amended and Restated
Loan and Security Agreement
 
LITIGATION
 
 
 
1.
Proceedings and investigations pending against Borrowers or its Subsidiaries:
 
NONE.

 

 
2.
Threatened proceedings or investigations of which any Borrower or its Subsidiary
is aware:
 
NONE.

 
 
3.
Pending Commercial Tort Claim of any Obligor:
 
NONE.

 
 
 
 
 
Schedule 9.1.16 to Amended and Restated Loan and Security Agreement
Litigation
1

--------------------------------------------------------------------------------

 
 
 
 
SCHEDULE 9.1.18
 
to
 
Amended and Restated
Loan and Security Agreement
 
PENSION PLAN DISCLOSURES
 
 
NONE.
 
 
 
 
 
Schedule 9.1.18 to Amended and Restated Loan and Security Agreement
Pension Plan Disclosures
1

--------------------------------------------------------------------------------

 
 
 
SCHEDULE 9.1.20
 
to
 
Amended and Restated
Loan and Security Agreement
 
LABOR CONTRACTS
 
Parent, Borrowers and their Subsidiaries are party to the following collective
bargaining agreements, management agreements and consulting agreements:
 
NONE.
 
 
 
 
 
 
Schedule 9.1.20 to Amended and Restated Loan and Security Agreement
Labor Contracts
1

--------------------------------------------------------------------------------

 

 
SCHEDULE 10.2.2
 
to
 
Amended and Restated
Loan and Security Agreement
 
EXISTING LIENS
 
 
 
 
 
 
 
 
 
 
Schedule 10.2.2 to Amended and Restated Loan and Security Agreement
Existing Liens
1

--------------------------------------------------------------------------------

 
 
 
SCHEDULE 10.2.17
 
to
 
Amended and Restated
Loan and Security Agreement
 
EXISTING AFFILIATE TRANSACTIONS
 

1.
Contract Receivables Purchase Agreement dated as of even date herewith between
Conn Credit I, LP and Conn Appliances, Inc.
   
2.
Contract Receivables Purchase Agreement dated as of even date herewith between
Conn Credit I, LP and Conn Credit Corporation, Inc.
   
3.
Servicing Agreement dated as of even date herewith between Conn Credit I, LP and
Conn Appliances, Inc.
   
4.
Contract Originator Note dated as of even date herewith made by Conn Credit I,
LP and payable to Conn Appliances, Inc.
   
5.
Contract Originator Note dated as of even date herewith made by Conn Credit I,
LP and payable to Conn Credit Corporation, Inc.
   
6.
Merchant Agreement between Conn Credit Corporation, Inc. and Conn Appliances,
Inc.
   
7.
Purchase Agreement dated as of even date herewith between Conn Appliances, Inc.
and Conn Credit Corporation, Inc.

 
 
 
 
 
 
 
Schedule 10.2.17 to Amended and Restated Loan and Security Agreement
Existing Affiliate Transactions
 
1

--------------------------------------------------------------------------------

 
 
SCHEDULE 10.2.2
 
to
 
Loan and Security Agreement
 
EXISTING LIENS
 
Initial Type of Filing
Debtor
Secured Party
Initial Filing No. and Date
Jurisdiction
UCC-1
Conn Appliances, Inc.
General Electric Capital Corporation
9600056267 on March 22, 1996
Texas Secretary of State
UCC-1
Conn Appliances, Inc.
GE Commercial Distribution Finance Corporation
9800115926 on June 5, 1998
Texas Secretary of State
UCC-1
Conn Appliances, Inc.
Conn’s, Inc.
Electrolux Home Products
020007278288 on October 23, 2001
Texas Secretary of State
UCC-1
Conn Appliances, Inc.
GE Commercial Distribution Finance Corporation
020020382714 on February 25, 2002
Texas Secretary of State
UCC-1*1
Conn Appliances, Inc.
Wells Fargo Bank, National Association
030001275725 on September 13, 2002
Texas Secretary of State
UCC-1
Conn Appliances, Inc.
Husqvarna Outdoor Products, Inc.
060008742178 on March 17, 2006
Texas Secretary of State
UCC-1
Conn Appliances, Inc.
Textron Financial Corporation
070026787360 on August 7, 2007
Texas Secretary of State
UCC-1
Conn Appliances, Inc.
Daimler Trust
070040807501 on December 3, 2007
Texas Secretary of State
UCC-1
Conn Appliances, Inc.
Daimler Trust
070043216619 on December 26, 2007
Texas Secretary of State
UCC-1
Conn Appliances, Inc.
Crown Credit Company
080002453325 on January 22, 2008
Texas Secretary of State
UCC-1
Conn Appliances, Inc.
Crown Credit Company
080028513300 on August 26, 2008
Texas Secretary of State
UCC-1
Conn Appliances, Inc.
GE Money Bank
090014992620 on May 27, 2009
Texas Secretary of State
UCC-1
Conn Appliances, Inc.
IBM Credit LLC
090015569883 on June 2, 2009
Texas Secretary of State
UCC-1
Conn Appliances, Inc.
TCF Inventory Finance, Inc.
090032612376 on November 24, 2009
Texas Secretary of State
UCC-1
Conn Appliances, Inc.
Red Iron Acceptance, LLC
100003641025 on February 8, 2010
Texas Secretary of State
UCC-1
Conn Appliances, Inc.
Ikon Financial Services
100012127842 on April 29, 2010
Texas Secretary of State
UCC-1
CAIAIR, Inc.
CSF Air, LLC
20154033 on December 17, 2001
Delaware Secretary of State

--------------------------------------------------------------------------------

*1  UCC to be terminated upon execution of Amended and Restated Loan and
Security Agreement.
 
 

--------------------------------------------------------------------------------