Exhibit 10.1
November 8, 2010
Mr. Timothy L. Frank
Conn’s, Inc.
Chief Executive Officer
3295 College Street
Beaumont, TX 77701
Dear Mr. Frank:
     Stephens Inc. (“Stephens”) is pleased to act as financial advisor to
Conn’s, Inc. (the “Company”) in connection with assisting the Company in
evaluating its potential capital and financing alternatives, whether debt or
equity, its existing and proposed debt financing arrangements and its potential
equity or equity-linked capital alternatives, including its proposed rights
offering to the holders of the outstanding common stock of the Company (the
“Offering”). This letter will confirm our mutual understanding of the terms and
conditions on which Stephens will provide financial advisory services to the
Company. The terms of any financing arrangement, including in connection with
the Offering, will be subject to the Company’s approval, and Stephens is not
authorized to make any agreement or commitment on behalf of the Company.
     In connection with this engagement, Stephens has provided or will provide
the following services:

  1)   assist the Company in evaluating its existing capital structure and in
evaluating potential financing strategies and alternatives;     2)   assist the
Company in evaluating its debt financing arrangements and in evaluating
potential new or revised debt financing arrangements;     3)   assist the
Company in evaluating and structuring one or more equity or equity-linked
financing arrangements, including developing a strategy therefor and developing
and evaluating structure, timing and other terms related thereto;     4)  
assist the Company in formulating a strategy for refinancing its debt facilities
and in developing the structure, pricing and timing of its proposed debt
refinancing transactions;     5)   assist the Company with identifying potential
lenders to be contacted in connection with the proposed refinancing of its debt
facilities and with developing negotiation strategies and conducting
negotiations with respect to its potential debt refinancing transactions; and  
  6)   provide such other investment banking services as may be customarily
provided

 

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

 

November 8, 2010
Page 2 of 3

      by Stephens in connection with any of the foregoing and as may be mutually
agreed upon by Stephens and the Company.

     As compensation for Stephens’ services, the Company will pay to Stephens a
financial advisory fee in the amount equal to 3.75% of the total aggregate
subscription price received by the Company from the exercise of Rights upon the
closing of the Offering and the related debt refinancing transactions (the
“Refinancing Transactions” and together with the Offering, the “Transactions”).
In addition, the Company will pay or directly reimburse Stephens for one-half of
the cost of outside counsel fees incurred by Stephens relating to any filings
required to be made with the Financial Industry Regulatory Authority, Inc., but
will not reimburse Stephens for any other expenses or costs (including
additional outside counsel fees).
     Stephens and the Company acknowledge that an independent financial advisor
will be engaged by the Rights Committee of the Company’s Board of Directors and
will independently advise the Rights Committee regarding the Offering and the
pricing of the Company.
     Stephens’ engagement as financial advisor (the “Engagement Period”) will
terminate on the earlier of (i) the closing of the Transactions and (ii) six
months from the date hereof, unless extended by mutual written consent. All
provisions of the indemnification and contribution rider attached hereto as
Exhibit A shall survive any expiration or termination of this engagement
agreement.
     The Company will furnish Stephens with such information as Stephens
believes appropriate to its assignment. The Company recognizes and confirms
that, in performing the services contemplated by this letter, Stephens: (i) will
use and rely primarily on the information provided by the Company and on
information available from public sources, which may include information
available through subscription services (collectively, the “Information”);
(ii) does not assume responsibility for the reliability, accuracy or
completeness of the Information and does not undertake to independently verify
the Information; (iii) will not perform any audit (financial or otherwise) or
forensic accounting services; (iv) will not make an appraisal of any assets or
liabilities of the Company or of any potential transaction counterparties or
otherwise assess the solvency for bankruptcy law purposes of the Company or of
any potential transaction counterparties; and (v) with respect to any financial
forecasts (including cost savings) that may be furnished to or discussed with
Stephens by the Company or any other person in connection with any proposed
transaction, will assume that such forecasts have been reasonably prepared and
reflect the best then currently available estimates and judgment of the
Company’s or such other person’s management. The Company will promptly advise
Stephens if any Information previously provided becomes inaccurate or is
required to be updated. The form and content of the registration statement (the
“Registration Statement”) filed by the Company with the Securities and Exchange
Commission (the “Commission”) in connection with the Offering, including the
prospectus and the prospectus supplement relating thereto and the documents
incorporated by reference therein (collectively, the “Prospectus”), and any
amendments or

 

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

 

November 8, 2010
Page 3 of 3
supplements thereto, used by the Company in connection with the Offering shall
be approved by the Company and shall be the property of the Company. The Company
will advise Stephens promptly, after it receives notice, or otherwise becomes
aware, of (i) the issuance by the Commission or any other agency of any comment
or order or the taking of any other action concerning the Offering, including
any stop order with respect to the registration statement (and, if in writing,
the Company will furnish you with a copy thereof. The Company represents,
warrants and covenants to Stephens that: on the effective date and at the launch
date of the Offering and at the expiration time of the Offering, the
Registration Statement did not and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading; and on the
date of any filing pursuant to Rule 424(b) promulgated by the Commission under
the Securities Act of 1933 in connection with the Offering and on the closing
date of the Offering, the Prospectus (together with any amendment or supplement
thereto) will not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
     Please note that in the ordinary course of business Stephens and its
affiliates at any time may hold long or short positions, and may trade or
otherwise effect transactions as principal or for the accounts of customers, in
debt or equity securities or options on securities of the Company or any other
party that may be involved in a financing transaction.
     The Company agrees to indemnify and hold Stephens harmless as provided in
the indemnification and contribution rider attached hereto as Exhibit A. This
agreement and its Exhibits, including (but not limited to) the indemnification
and contribution exhibit, incorporate the entire understanding of the parties
with respect to this engagement of Stephens by the Company and supersede all
previous agreements regarding such engagement, should any exist.
This agreement has been and is made solely for the benefit of Stephens, the
Company and the persons, agents, employees, officers, directors and controlling
persons referred to in the indemnification and contribution exhibit and their
respective successors, assigns and heirs, and no other person shall acquire or
have any right under or by virtue of this agreement. Stephens shall act as an
independent contractor and shall be deemed not to be a fiduciary under this
engagement agreement. Any duties arising out of Stephens’ engagement hereunder
shall be owed solely to the Company.

 

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

 

     If this letter correctly states our agreement, please so indicate by
signing below and returning a signed copy to us. Upon receipt of a signed copy
of this letter, the terms of such letter shall constitute a binding agreement
between Stephens and the Company.

            Very truly yours,

STEPHENS INC.
      By:                        

ACCEPTED THIS ____ DAY OF NOVEMBER, 2010.
Conn’s, Inc.

         
By:
       
 
 
 
   
Title:
       
 
       

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

 

Conn’s Inc.
November 8, 2010
EXHIBIT A
INDEMNIFICATION AND CONTRIBUTION
          (a) The Company will indemnify and hold harmless Stephens Inc.
(“Stephens”) and its affiliates, and their respective officers, directors,
advisors, representatives, agents, employees, and each other person controlling
Stephens or any of its affiliates within the meaning of either Section 15 of the
Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act
of 1934, as amended (each such party, including Stephens, an “Indemnified
Person”), from and against any and all losses, claims, damages and liabilities,
joint or several (collectively, “Damages”), related to or arising out of any
matter referred to in the engagement letter to which this Exhibit is appended
(the “Agreement”), including an Indemnified Person’s services thereunder, except
to the extent such Damages are finally, judicially determined to have resulted
directly and primarily from the bad faith, gross negligence or willful
misconduct of an Indemnified Person,
     (b) The Company will also reimburse each Indemnified Person promptly upon
request for all expenses (including without limitation reasonable fees and
disbursements of legal counsel, and usual and customary expenses for an
Indemnified Person’s involvement in discovery proceedings or testimony) incurred
in connection with any threatened or commenced inquiry, investigation, action or
legal, administrative or judicial proceeding (collectively, “Proceedings”),
related to or arising out of any matter referred to in the Agreement, including
an Indemnified Person’s services thereunder. The reimbursement obligations
contained herein shall apply whether or not Stephens or any other Indemnified
Person is a formal party to any Proceeding and are intended to cover, among
other things, reimbursement of expenses incurred for reviewing, investigating or
responding to, or otherwise in connection with, any claims, demands,
allegations, discovery requests, depositions, investigative testimony, hearings,
arbitrations, trials, appeals or other proceedings related to or arising out of
any matter referred to in the Agreement, including an Indemnified Person’s
services thereunder. In the event that any reimbursed expenses are finally,
judicially determined to have resulted directly and primarily from such
Indemnified Person’s bad faith, gross negligence or willful misconduct in
performing the services which are the subject of the Agreement, Stephens shall
promptly refund to the Company the portion of amounts advanced under this
Exhibit in respect of reimbursement of expenses that is attributable to expenses
incurred in relation to the act or omission of such Indemnified Person who is
the subject of such determination.
     (c) The Company and Stephens agree that if, for any reason, any
indemnification or reimbursement sought pursuant to this Exhibit is unavailable
or is insufficient to hold any Indemnified Person harmless, then, whether or not
Stephens is the person entitled to indemnification, the Company and Stephens
shall each contribute to amounts paid or payable by

 

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

 

the Indemnified Person in respect of the Damages and expenses (including all
legal and other fees and expenses incurred in defending any action or claim) for
which such indemnification or reimbursement is unavailable or insufficient, in
such proportion as is appropriate to reflect (i) the relative benefits received
(or anticipated to be received) by the Company and its stockholders, on the one
hand, and Stephens, on the other, in connection with the transaction(s)
contemplated in the Agreement and (ii) such parties’ relative fault in
connection with the matters as to which such Damages related, as well as any
relevant equitable considerations; provided that in no event shall the amount to
be contributed by Stephens exceed the amount of fees actually received by
Stephens under the Agreement (excluding any amounts received by Stephens as
reimbursement of expenses). It is hereby agreed that the relative benefits to
the Company and its stockholders, on the one hand, and Stephens, on the other
hand, with respect to the Agreement shall be deemed to be in the same proportion
as (x) the total value paid, transferred, exchanged or received or proposed to
be paid, transferred, exchanged or received by the Company or its stockholders,
as the case may be, in connection with any transaction (whether or not
consummated) bears to (y) the fee(s) paid or payable to Stephens in connection
with the Agreement. The Company and Stephens agree that it would not be just and
equitable if contribution pursuant to this clause (c) were determined by pro
rata allocation or by any other method which does not take into account the
equitable considerations referred to herein.
     (d) The Company also agrees that no Indemnified Person shall have any
liability to the Company for or in connection with the Agreement, except for
liability for Damages which are finally, judicially determined to have resulted
directly and primarily from the bad faith, gross negligence or willful
misconduct of the Indemnified Person. In no event shall any Indemnified Person
be responsible for any indirect, special or consequential damages, even if the
Indemnified Person is advised of the possibility thereof.
     (e) Promptly after receipt by an Indemnified Person under this paragraph
(e) of notice of the commencement of any Proceeding, such Indemnified Person
will, if a claim in respect thereof is to be made against the Company under this
paragraph (e), notify the Company in writing of the commencement thereof; but
the failure so to notify the Company (i) will not relieve it from Damages under
paragraph (a) hereof unless and to the extent it did not otherwise learn of such
action and such failure results in the forfeiture by the Company of substantial
rights and defenses and (ii) will not, in any event, relieve the Company from
any obligations to any Indemnified Person other than the indemnification
obligation provided in paragraph (a).
     (f) The Company will promptly notify an Indemnified Person of the assertion
against the Indemnified Person or any other person of any claim or the
commencement of any inquiry, investigation, action or proceeding, of which the
Company has knowledge, relating to or arising out of any matter referred to in
the Agreement, including an Indemnified Person’s services under the Agreement.
     (g) The Company and Stephens agree to consult in advance with one another
with respect to the terms of any proposed waiver, release or settlement of any
Proceeding to which the Company or an Indemnified Person may be subject as a
result of the matters contemplated by the

 

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

 

Agreement and further agree not to enter into any such waiver, release or
settlement without the prior written consent of one another (which consent shall
not be unreasonably withheld), unless such waiver, release or settlement
includes an unconditional release of the Company or such Indemnified Person, as
the case may be, from all liability arising out of such Proceeding.
     (h) The agreements of the Company under this Annex shall be in addition to
any liabilities the Company may otherwise have, shall be binding upon and inure
to the benefit of any successors, assigns, heirs and personal representatives of
the Company or an Indemnified Person, and shall apply whether or not Stephens or
any other Indemnified Person is a formal party to any Proceeding. The Company
and Stephens irrevocably agree to waive trial by jury in any action, proceeding,
claim or counterclaim brought by or on behalf of either party related to or
arising out of this Exhibit, the Agreement or the performance of services under
this Agreement.
(i) The foregoing agreements shall apply to any modification or extension of the
Agreement, and shall remain in full force and effect following the termination
of the Agreement, whether as a result of the completion of services or
otherwise.