EXHIBIT 10.24.1
FOURTH AMENDED AND RESTATED SECURITY AGREEMENT
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THIS FOURTH AMENDED AND RESTATED SECURITY AGREEMENT (this "Agreement"),
dated as of August 31, 2006, is by CONN APPLIANCES, INC., a Texas corporation,
and CAI, L.P., a Texas limited partnership (collectively, "Debtor"), for the
benefit of BANK OF AMERICA, N.A., a national banking association ("Secured
Party").
RECITALS
A. Secured Party agreed to provide Debtor with a secured and uncommitted
import letter of credit line of up to $1,200,000 in the aggregate to accommodate
Debtor's importation of inventory purchases into North America, which import
letter of credit line was extended, renewed and increased up to $1,500,000 in
June, 2004, and further extended, renewed and increased up to $3,000,000 in
July, 2005 (the "Existing Import Letter of Credit Line").
B. In connection with the Existing Import Letter of Credit Line, Debtor
executed a Security Agreement dated as of March 20, 2003 (as amended and
restated by the First Amended and Restated Security Agreement dated as of June
17, 2004, as amended and restated by the Second Amended and Restated Security
Agreement dated as of July 11, 2005, and as amended and restated by the Third
Amended and Restated Security Agreement dated as of June 14, 2006) in favor of
Secured Party, granting to Secured Party a first priority security interest in,
and lien upon, the "Collateral" as described therein (collectively, the
"Existing Security Agreement").
C. Debtor and Secured Party have agreed to increase the Existing Import
Letter of Credit Line to provide for a secured and uncommitted import letter of
credit line of up to $10,000,000 in the aggregate (the "Import Letter of Credit
Line").
D. Accordingly, Secured Party and Debtor hereby amend and restate the
Existing Security Agreement in its entirety as follows:
AGREEMENTS
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Debtor covenants and agrees with
Secured Party as follows:
1. Certain Definitions. Capitalized terms used but not defined in this
Agreement have the meaning given them in the UCC (defined below). If the
definition given a term in Chapter 9 of the UCC conflicts with the definition
given that term in any other chapter of the UCC, the Chapter 9 definition shall
control. As used in this Agreement:
Agreement means this Agreement, together with all schedules attached
hereto, and all amendments and modifications to this Agreement or such
schedules.
Collateral is defined in Section 5 of this Agreement.
Credit Agreement Event of Default means an "Event of Default" as
defined in that certain Credit Agreement dated as October 31, 2005, among
Conn Appliances, Inc. and the other Borrowers (as defined therein),
JPMorgan Chase Bank, National Association, as Administrative Agent, Bank of
America, as Syndication Agent, SunTrust Bank, as Documentation Agent, J.P.
Morgan Securities, Inc., as Arranger, and the Lenders (as defined therein)
party thereto, as amended, restated or otherwise modified from time to
time; provided that, the defined term "Credit Agreement Event of Default"
includes without limitation, an event of default under any and all credit
agreements or loan agreements that replace or refinance such Credit
Agreement.
Debtor is defined in the preamble to this Agreement.
Event of Default is defined in Section 11.
Governmental Authority means any (a) (domestic or foreign) judicial,
executive, legislative, or administrative instrumentality, or any agency,
court, department, commission, board, bureau, or other instrumentality,
under any federal, state, county, parish, commonwealth, city, municipal or
other political subdivision, and (b) private mediation or arbitration board
or panel.
Import Letter of Credit Line is defined in Recital A above.
Inventory means any and all inventory purchased from every
counterparty of Debtor with credit support provided by the Import Letter of
Credit Line, including without limitation, the parties listed on attached
Schedule 1 (as such Schedule 1 may be amended from time to time as set out
in Section 3 below), whether now owned or acquired in the future by Debtor,
all proceeds of insurance thereon, and all identifiable cash proceeds in
the form of money and checks received by any Debtor with respect thereto.
Law means all applicable statutes, laws, treaties, ordinances, rules,
regulations, orders, writs, injunctions, decrees, judgments, opinions and
interpretations of any Governmental Authority.
Lien means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement or encumbrance of any kind and any other
arrangement for a creditor's claim to be satisfied from assets or proceeds
prior to the claims of other creditors or the owners.
Obligation means all of Debtor's payment and performance obligations
under this Agreement and all other documents and agreements executed in
connection with the Import Letter of Credit Line, including without
limitation, all applications and agreements for the issuance of commercial
letters of credit, and reasonable attorney's fees and expenses incurred by
Secured Party in connection therewith and herewith.
Obligor means "obligor" as such term is defined in the UCC, including
without limitation, any person or entity obligated with respect to any of
the Collateral, whether as a party to a contract, an account debtor or
otherwise.
Rights means rights, remedies, powers, privileges and benefits.
Secured Party is defined in the preamble to this Agreement.
Security Interest means the security interests granted and the
transfers, pledges, and assignments made under Section 3 of this Agreement.
UCC means the Uniform Commercial Code, as adopted and in effect in the
State of Texas from time to time.
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2. Security For Import Letter of Credit Line. This Agreement is being
executed and delivered to secure the prompt, unconditional, and complete payment
and performance of the Obligation.
3. Security Interest. Subject to the terms and conditions of this
Agreement, Debtor grants to Secured Party a security interest in, and Lien upon,
all of Debtor's right, title, and interest in and to the Collateral and Debtor
transfers, pledges, and assigns as security to Secured Party all Debtor's right,
title, and interest in the Collateral. If the transfer, pledge, or assignment of
any specific item of the Collateral is expressly prohibited by any contract, the
Security Interest shall be effective to the extent allowed by UCC ss.9.406 or
other applicable Law. Notwithstanding anything to the contrary herein, Debtor
and Secured Party hereby agree that Debtor may from time to time update the list
of counterparties on Schedule 1 attached hereto by delivering a revised Schedule
1 to Secured Party, and, upon the execution of such revised Schedule 1 by
Secured Party, the then current Schedule 1 shall automatically be replaced in
its entirety by such revised Schedule 1.
4. No Assumption or Modification. The Security Interest is given as
collateral security only. Secured Party does not assume, and shall not be liable
for, any of Debtor's liabilities, duties, or obligations under or in connection
with the Collateral. Secured Party's acceptance of this Agreement, or its taking
any action in carrying out this Agreement, does not constitute Secured Party's
approval of the Collateral or Secured Party's assumption of any obligation
under, or in connection with, the Collateral. This Agreement does not affect or
modify Debtor's obligations with respect to the Collateral.
5. Collateral. As used in this Agreement, the term "Collateral" means all
of Debtor's right, title and interest in and to Inventory, wherever located,
whether now owned or hereafter acquired by Debtor, together with any and all
proceeds, products, additions to, substitutions for and accessions thereto;
provided, however, that under no circumstances shall the Collateral include (x)
Purchased Receivables, Related Security, Receivable Files, or Originator Notes
as each is defined in the Receivables Purchase Agreement dated as of September
1, 2002, between Conn Appliances, Inc., CAI, L.P., and Conn Funding I, L.P., as
sellers, and Conn Funding II, L.P., as purchaser, or any products or proceeds
thereof; or (y) Transferred Assets as defined in the Agreement of Sale dated as
of January 24, 2001, by and between Conn Appliances, Inc. and CAI, L.P., as
sellers, and Aaron Rents, as purchaser. Subject to the proviso in the preceding
sentence, the description of Collateral contained in this Section 5 includes
after acquired Collateral and proceeds of the Collateral.
6. Fraudulent Conveyance. Notwithstanding any provision of this Agreement
to the contrary, Debtor agrees that if, but for the application of this Section
6, the Obligations or any Security Interest would constitute a preferential
transfer under 11 U.S.C. ss. 547, a fraudulent conveyance under 11 U.S.C. ss.
548 (or any successor section of that Code) or a fraudulent conveyance or
transfer under any state fraudulent conveyance or fraudulent transfer law or
similar Law in effect from time to time (each a "Fraudulent Conveyance"), then
the Obligations and each affected Security Interest will be enforceable to the
maximum extent possible without causing the Obligations or any Security Interest
to be a Fraudulent Conveyance, and shall be deemed to have been automatically
amended to carry out the intent of this Section 6.
7. Representations and Warranties. Debtor represents and warrants to
Secured Party that:
(a) Binding Obligation. This Agreement creates a legal, valid, and
binding security interest in, and Lien upon, the Collateral in favor of Secured
Party and enforceable against Debtor. The Security Interest created under this
Agreement will be duly perfected once the action required for perfection under
applicable Law has been taken. Once perfected, the Security Interest will
constitute a first priority Lien on the Collateral. The creation of the Security
Interest does not require the consent of any third party.
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(b) Place of Business; Location of Records. The location of Debtor's
chief executive office or principal place of business is set out on Schedule 2.
Debtor's state of organization and its organizational identification number is
set out on Schedule 2. Debtor's books and records concerning the Collateral are
located at its chief executive office or principal place of business. All
Inventory (other than on consignment or in transit) are located until disposed
of in the ordinary course of business) at one or more of the locations set out
on Schedule 2.
(c) No Prior Lien. Debtor has not executed any prior transfer,
assignment, pledge, security interest, Lien or hypothecation covering the
Collateral or any interest in the Collateral other than a subordinated Lien on
the Inventory granted to the lenders under Debtor's senior credit facility with
JP Morgan Chase, as agent for such lenders.
(d) No Defenses. No portion of the Collateral is subject to any setoff,
counterclaim, defense, allowance, or adjustment.
8. Additional Collateral. The delivery at any time by Debtor to Secured
Party of Collateral or of additional specific descriptions of certain Collateral
will constitute a representation and warranty by Debtor to Secured Party under
this Agreement that the representations and warranties in Section 7 are true and
correct with respect to each item of such Collateral.
9. Affirmative Covenants. Debtor further covenants and agrees with Secured
Party that until the Obligation is irrevocably paid and performed in full,
Debtor shall:
(a) Relocation of Office or Books and Records; Change of Name or
Address; and Organizational Structure. Give Secured Party thirty (30) days prior
written notice of (i) any proposed relocation of its principal place of business
or chief executive office, (ii) any proposed relocation of the place where its
books and records relating to the Collateral are kept, and (iii) a change of its
name, organizational structure or taxpayer identification number.
(b) Change in Collateral. Promptly notify Secured Party of any material
change in the Collateral or in any fact or circumstance represented or warranted
by Debtor with respect to any of the Collateral.
(c) Insurance. Debtor shall obtain and maintain insurance upon and
relating to the Inventory insuring against general liability, personal injury
and death, loss by fire and such other hazards, casualties, and contingencies
(including but not limited to fire, lightning, hail, windstorm, explosion,
malicious mischief, and vandalism) as are covered by extended coverage policies
in effect where the such property is located and such other risks as may be
reasonably specified by Secured Party from time to time, all in such amounts and
with such insurers of recognized responsibility as are reasonably acceptable to
Secured Party. Upon request, Debtor shall provide Secured Party with
certificates of insurance in amounts and with deductibles reasonably required by
Secured Party. Secured Party shall have the right, but not the obligation, to
make premium payments, at Debtor's expense, to prevent any cancellation,
endorsement, alteration or reissuance, and such payments shall be accepted by
the insurer to prevent same, provided that, to the extent Secured Party makes
any premium payments or pays any other amount in respect of such insurance
policies, such amount shall become part of the Obligations and shall accrue
interest at the maximum rate permitted by applicable law.
(d) Taxes and Assessments. Debtor shall pay all taxes and assessments
on all of the Collateral when due and upon Secured Party's request, provide
Secured Party with evidence of payment of such taxes. Secured Party shall have
the right, but not the obligation, to pay such taxes or assessments, at Debtor's
expense, to prevent any lien or other legal process from attaching or arising,
provided that, to the extent Secured Party pays any such tax or assessment or
any other amount in respect of such tax or assessment, such amount shall become
part of the Obligation and shall accrue interest at the maximum rate permitted
by applicable law.
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(e) Record of Collateral. Maintain at its chief executive office or
principal place of business a current record of all of the Collateral and permit
Secured Party or its representatives to inspect and make copies from such
records, and upon Secured Party's request, furnish to Secured Party such
documents, lists, descriptions, certificates, and other information with respect
to the identity, status, condition, terms of, parties to, and value of the
Collateral.
(f) Adverse Claim. Immediately notify Secured Party in writing of any
claim, action, or proceeding challenging the Security Interest or affecting
title to or any loss or casualty, with respect to all or any portion of the
Collateral or the Security Interest and, at Secured Party's request, appear in
and defend any such appropriate action or proceeding at Debtor's sole cost and
expense.
(g) Hold Collateral In Trust. While an Event of Default exists, hold in
trust (and not commingle with its other assets) for Secured Party all Collateral
at any time received by it and promptly deliver same to Secured Party upon
Secured Party's request unless Secured Party at its option gives Debtor written
permission to retain that Collateral. While an Event of Default exists, at
Secured Party's request, the Collateral so retained shall be marked to state
that it is assigned to Secured Party and each instrument shall be endorsed to
the order of Secured Party (but failure to so mark or endorse shall not impair
the Security Interest).
(h) Perform Obligations. Perform all of its obligations under or in
connection with the Collateral in accordance with customary business practices
and applicable Law.
(i) Amendment. Not amend, alter, or modify, or permit the amendment,
alteration or modification of, all or any portion (individually or collectively)
of the Collateral in any adverse manner without Secured Party's prior written
consent.
(j) Impairment of Collateral. Not do or permit any act which would
adversely impair all or any portion of the Collateral.
(k) Default Under Collateral. Immediately notify Secured Party in
writing of any default or event of default by Debtor or, to the best of Debtor's
knowledge, by any other party under or in connection with all or any portion
(individually or collectively) of the Collateral and immediately use its
commercial efforts to remedy the same or immediately demand that the same be
remedied.
(l) Further Assurances. From time to time Debtor shall promptly
execute, authorize, authenticate and deliver to Secured Party all other
assignments, certificates, supplemental documents, and financing statements, and
all other acts Secured Party requests in order to create, evidence, perfect,
continue or maintain the existence and priority of the Security Interest and in
order to perfect the Lien on, and Security Interest in, all future Collateral
including, without limitation, (i) amendments to Schedule 1 and/or Schedule 2,
and (ii) the authentication and filing of such financing statements as Secured
Party may require. A carbon, photographic, or other reproduction of this
Agreement or of any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement and may be filed as a
financing statement.
10. Negative Covenants. Debtor further covenants and agrees with Secured
Party that until the Obligation is paid and performed in full, Debtor shall not:
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(a) Use Violations. Debtor will not use, maintain, operate, or occupy,
or allow the use, maintenance, operation, or occupancy of the Collateral in any
manner which violates any Law.
(b) Alterations. Debtor will not commit or permit any waste of the
Collateral that would diminish its value in any material respect.
(c) Prohibition on Transfer of Property. Debtor will not sell, trade,
transfer, assign, exchange, or otherwise dispose of any of the Collateral except
in the ordinary course of Debtor's business.
(d) No Further Encumbrances. Debtor will not create, place, suffer, or
permit to be created or placed or, through any act or failure to act, acquiesce
in the placing of or allow to remain, any mortgage, pledge, Lien (statutory,
constitutional, or contractual), security interest, encumbrance, or charge on,
or conditional sale or other title retention agreement, regardless of whether
same are expressly subordinate to the Liens of this Agreement with respect to
the Collateral other than Liens incurred under Debtor's senior credit facility.
11. Event of Default; Remedies. Upon the occurrence and during the
continuance of any default under any application and agreement for the issuance
of commercial letter of credit or similar agreement executed and delivered in
connection with the Import Letter of Credit Line, or any breach of this
Agreement, or a Credit Agreement Event of Default (each an "Event of Default"),
Secured Party has the following cumulative rights and remedies under this
Agreement:
(a) Debtor's Agent. Secured Party shall be deemed to be irrevocably
appointed as Debtor's agent and attorney-in-fact with all right and power to
enforce all of Debtor's rights and remedies under or in connection with the
Collateral. All costs, expenses and liabilities incurred and payments made by
Secured Party as Debtor's agent and attorney-in-fact, including, without
limitation, attorney's fees and expenses, shall be considered a loan by Secured
Party to Debtor which shall be repayable on demand and shall accrue interest at
the maximum rate of interest allowed by Law and shall be part of the
indebtedness secured hereby.
(b) Obligors. Secured Party may notify or require each Obligor to make
payment directly to Secured Party and Secured Party may take control of the
proceeds paid to Debtor. Until Secured Party elects to exercise these Rights,
Debtor is authorized to collect and enforce the Collateral and to retain and
expend all payments made on the Collateral. After Secured Party elects to
exercise these rights, Secured Party shall have the Right in its own name or in
the name of Debtor to (i) compromise or extend time of payment with respect to
all or any portion of the Collateral for such amounts and upon such terms as
Secured Party may reasonably determine, (ii) demand, collect, receive, receipt
for, sue for, compound, and give acquittance for any and all amounts due or to
become due with respect to Collateral, (iii) take control of cash and other
proceeds of any Collateral, (iv) endorse Debtor's name on any notes,
acceptances, checks, drafts, money orders, or other evidences of payment on
Collateral that may come into Secured Party's possession, (v) sign Debtor's name
on any invoice or bill of lading relating to any Collateral, on any drafts
against Obligors or other Persons making payment with respect to Collateral, on
assignments and verifications of accounts or other Collateral and on notices to
Obligors making payment with respect to Collateral, (vi) send requests for
verification of obligations to any Obligor, and (vii) do all other acts and
things reasonably necessary to carry out the intent of this Agreement. If any
Obligor fails to make payment on any Collateral when due, Secured Party is
authorized, in its sole discretion, either in its own name or in Debtor's name,
to take such action as Secured Party shall deem appropriate for the collection
of any amounts owed with respect to Collateral or upon which a delinquency
exists. Regardless of any other provision of this Agreement, Secured Party shall
not be liable for its failure to collect, or for its failure to exercise
diligence in the collection of, any amounts owed with respect to Collateral, nor
shall he be under any duty whatsoever to anyone except Debtor to account for
funds that it shall actually receive under this Agreement. A receipt if given by
Secured Party to any Obligor shall be a full and complete release, discharge,
and acquittance to such Obligor, to the extent of any amount so paid to Secured
Party. Secured Party may apply or set off amounts paid on Collateral and the
deposits against any liability of Debtor to Secured Party.
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(c) UCC Rights. Secured Party may exercise any and all Rights available
to a secured party under the UCC, in addition to any and all other Rights
afforded by this Agreement, at law, in equity, or otherwise, including, without
limitation, (i) requiring Debtor to assemble all or part of the Collateral and
make it available to Secured Party at a place to be designated by Secured Party
which is reasonably convenient to Debtor and Secured Party, (ii) applying by
appropriate judicial proceedings for appointment of a receiver for all or part
of the Collateral, (iii) applying to the Obligation then due and payable any
cash held by Secured Party, (iv) reducing any claim to judgment, (v) exercising
the rights of offset against the interest of Debtor in and to every account and
other property of Debtor in Secured Party's possession to the extent of the full
amount of the Obligation then due and payable, (vi) foreclosing the Security
Interest and any other liens Secured Party may have or otherwise realize upon
any and all of the rights Secured Party may have in and to the Collateral, or
any part thereof, and (vii) bringing suit or other proceedings before any
Governmental Authority either for specific performance of any covenant or
condition contained herein or in aid of the exercise of any right granted to
Secured Party hereunder.
(d) Notice. Reasonable notification of the time and place of any public
sale of the Collateral, or reasonable notification of the time after which any
private sale or other intended disposition of the Collateral is to be made,
shall be sent to Debtor and to any other Person entitled to notice under the
UCC, provided that, if any of the Collateral threatens to decline speedily in
value or is of the type customarily sold on a recognized market, Secured Party
may sell or otherwise dispose of the Collateral without notification,
advertisement, or other notice of any kind. It is agreed that notice sent or
given not fewer than ten (10) calendar days prior to the taking of the action to
which the notice relates is reasonable notification and notice for the purposes
of this subsection. It shall not be necessary that the Collateral be at the
location of the sale.
(e) Application of Proceeds. Secured Party shall apply the proceeds of
any sale, casualty, condemnation or other disposition of the Collateral as
follows: first, to the payment of all its expenses incurred in retaking,
holding, and preparing any of the Collateral for sale(s) or other disposition,
in arranging for such sale(s) or other disposition, and in actually selling or
disposing of the same (all of which is part of the Obligation); second, toward
repayment of amounts expended by Secured Party under Section 12 of this
Agreement; and third, toward payment of the balance of the Obligations in the
order and manner as Secured Party elects.
(f) Sale. Secured Party's sale of less than all the Collateral shall
not exhaust Secured Party's Rights under this Agreement and Secured Party is
specifically empowered to make successive sales until all the Collateral is
sold. If the proceeds of a sale of less than all the Collateral shall be less
than the Obligations, this Agreement and the Security Interest shall remain in
full force and effect as to the unsold portion of the Collateral just as though
no sale had been made. In the event any sale under this Agreement is not
completed or is, in Secured Party's reasonable opinion, defective, such sale
shall not exhaust Secured Party's rights under this Agreement and Secured Party
shall have the right to cause a subsequent sale or sales to be made. Any and all
statements of fact or other recitals made in any bill of sale or assignment or
other instrument evidencing any foreclosure sale under this Agreement as to
nonpayment of the Obligations, or as to the occurrence of any Event of Default,
or as to Secured Party's having declared all of such Obligation to be due and
payable, or as to notice of time, place and terms of sale and the properties to
be sold having been duly given, or as to any other act or thing having been duly
done by Secured Party, shall be taken as prima facie evidence of the truth of
the facts so stated and recited. Secured Party may appoint or delegate any one
or more Persons as agent to perform any act or acts necessary or incident to any
sale held by Secured Party, including the sending of notices and the conduct of
sale, but such acts must be done in the name and on behalf of Secured Party.
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(g) Existence of Event of Default. Regarding the existence of any Event
of Default for purposes of this Agreement, Debtor agrees that the Obligors on
any Collateral may rely upon written certification from Secured Party that such
an Event of Default exists. Debtor expressly agrees that Secured Party shall not
be liable to Debtor for any claims, damages, costs, expenses or causes of action
of any nature whatsoever in connection with, arising out of, or related to
Secured Party's exercise of any rights, powers or remedies under this Agreement.
12. Other Rights of Secured Party.
(a) Performance. In the event Debtor fails to preserve the priority of
the Security Interest in any of the Collateral, or, upon the occurrence and
during the continuance of an Event of Default, otherwise fails to perform any of
its obligations hereunder with respect to the Collateral, then Secured Party may
(but is not required to) prosecute or defend any suits in relation to the
Collateral or take any other action which Debtor is required to take under this
Agreement or applicable Law, but has failed to take. Any sum which may be
reasonably expended or paid by Secured Party under this subparagraph (including,
without limitation, court costs and attorneys' fees and expenses) shall bear
interest from the date of expenditure or payment at the maximum rate permitted
by applicable law until paid and, together with such interest, shall be payable
by Debtor to Secured Party upon demand and shall be part of the indebtedness
secured hereby.
(b) Collateral in Secured Party's Possession. If, while an Event of
Default exists, any Collateral comes into Secured Party's possession, Secured
Party may use such Collateral for the purpose of preserving it or its value
pursuant to the order of a court of appropriate jurisdiction or in accordance
with any other Rights held by Secured Party in respect of such Collateral.
Debtor covenants to promptly reimburse and pay to Secured Party, at Secured
Party's request, the amount of all expenses incurred by Secured Party in
connection with its custody and preservation of such Collateral, and all such
expenses, costs, taxes, and other charges shall bear interest at the maximum
rate permitted by applicable Law until repaid and, together with such interest,
shall be payable by Debtor to Secured Party upon demand and shall be part of the
indebtedness secured hereby. However, the risk of accidental loss or damage to,
or diminution in value of, Collateral is on Debtor. Provided that Secured Party
acts in accordance with all applicable Law, Secured Party shall have no
liability for failure to obtain or maintain insurance, nor to determine whether
any insurance ever in force is adequate as to amount or as to the risks insured.
With respect to Collateral that is in the possession of Secured Party, Secured
Party shall have no duty to fix or preserve Rights against prior parties to such
Collateral and shall never be liable for any failure to use diligence to collect
any amount payable in respect of such Collateral, but shall be liable only to
account to Debtor for what it may actually collect or receive thereon.
13. Miscellaneous.
(a) Term. Upon full and final payment of the indebtedness secured
hereby (other than as a result of Secured Party having exercised his rights
under this Agreement), this Agreement shall terminate, provided that no Obligor
on any of the Collateral shall be obligated to inquire as to the termination of
this Agreement, but shall be fully protected in making payment directly to
Secured Party, which payment shall be promptly paid over to Debtor after
termination of this Agreement.
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(b) Actions Not Releases. The Security Interest and Debtor's obligation
and Secured Party's Rights under this Agreement shall not be released,
diminished, impaired, or adversely affected by the occurrence of any one or more
of the following events: (i) the taking or accepting of any other security or
assurance for any or all of the Obligations, (ii) any release, surrender,
exchange, subordination, or loss of any security or assurance at any time
existing in connection with any or all of the Obligations, (iii) the
modification of, amendment to, or waiver of compliance with any terms of any
application or agreement for the issuance of commercial letter of credit or
similar agreement executed and delivered in connection with the Import Letter of
Credit Line, (iv) the insolvency, bankruptcy, or lack of corporate or trust
power of any party at any time liable for the payment of any or all of the
Obligation, whether now existing or hereafter occurring, (v) any renewal,
increase, extension, or rearrangement of the payment of any or all of the
Obligations, either with or without notice to or consent of Debtor, or any
adjustment, indulgence, forbearance, or compromise that may be granted or given
by Secured Party to Debtor, (vi) any neglect, delay, omission, failure, or
refusal of Secured Party to take or prosecute any action in connection with any
other agreement, document, guaranty, or instrument evidencing, securing, or
assuring the payment of all or any of the Obligation, (vii) any failure of
Secured Party to notify Debtor of any renewal, extension, or assignment of the
Obligation or any part thereof, or the release of any security under any other
document or instrument, or of any other action taken or refrained from being
taken by Secured Party against Debtor or any new agreement between Secured Party
and Debtor, it being understood that Secured Party shall not be required to give
Debtor any notice of any kind under any circumstances whatsoever with respect to
or in connection with the Obligation, including, without limitation, notice of
acceptance of this Agreement or any Collateral ever delivered to or for the
account of Secured Party under this Agreement, (viii) the illegality,
invalidity, or unenforceability of all or any part of the Obligation against any
third party obligated with respect thereto by reason of the fact that the
Obligation, or the interest paid or payable with respect thereto, exceeds the
amount permitted by Law, the act of creating the Obligation, or any part
thereof, is ultra vires, or the officers, partners, or trustees creating same
acted in excess of their authority, or for any other reason, or (ix) if any
payment by any party obligated with respect thereto is held to constitute a
preference under applicable Laws or for any other reason Secured Party is
required to refund such payment or pay the amount thereof to someone else.
(c) Waivers. Except to the extent expressly otherwise provided in this
Agreement, Debtor waives (i) any Right to require Secured Party to proceed
against any other Person, to exhaust its Rights in the Collateral, or to pursue
any other Right which Secured Party may have, (ii) with respect to the
Obligation, presentment and demand for payment, protest, notice of protest and
nonpayment, notice of acceleration, and notice of the intention to accelerate,
and (iii) all Rights of marshalling in respect of any and all of the Collateral.
(d) Financing Statement. Secured Party shall be entitled at any time to
file this Agreement or a carbon, photographic, or other reproduction of this
Agreement, as a financing statement, but the failure of Secured Party to do so
shall not impair the validity or enforceability of this Agreement.
(e) Amendments. This Agreement may only be amended by a writing
executed by Debtor and Secured Party.
(f) Multiple Counterparts. This Agreement may be executed in any number
of counterparts with the same effect as if all signatories had signed the same
document. All counterparts must be construed together to constitute one and the
same Agreement.
(g) Parties Bound. This Agreement shall be binding on Debtor and its
successors and assigns and shall inure to the benefit of Secured Party and its
successors and assigns.
(h) Assignment. Debtor may not, without Secured Party's prior written
consent, assign any Rights, duties, or obligations under this Agreement. In the
event of an assignment of all or part of the Obligation, the Security Interest
and other Rights and benefits under this Agreement, to the extent applicable to
the part of the Obligations so assigned, may be transferred with the
Obligations.
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(i) Notices. Any notice or communication required or permitted under
this Agreement must be given to the address specified under each party's
signature below. Any notice or demand given hereunder shall be deemed to have
been given and received (a) when actually received by the recipient, if
delivered in person, or (b) if mailed to the address below (whether ever
received or not), two business days after deposit in the U.S. Mail, postage
prepaid.
(j) Amendment and Restatement. This Agreement amends and restates in
its entirety the Existing Security Agreement and shall not be construed to be a
novation of the Existing Security Agreement.
(k) Governing Law. THIS AGREEMENT MUST BE CONSTRUED, AND ITS
PERFORMANCE ENFORCED, UNDER TEXAS LAW.
[Signatures appear on following page.]
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EXECUTED as of the date set forth in the preamble.
DEBTOR:
CONN APPLIANCES, INC., a Texas
corporation
By: /s/ David R. Atnip
--------------------------------------
David R. Atnip, Secretary/Treasurer
Address:
P.O. Box 2358
Beaumont, TX 77704-2358
Facsimile No.: (409) 832-4967
Attention: Thomas J. Frank, CEO
CAI, L.P., a Texas limited partnership
By: Conn Appliances, Inc., its sole
general partner
By: /s/ David R. Atnip
--------------------------------------
David R. Atnip, Secretary/Treasurer
Address:
P.O. Box 2358
Beaumont, TX 77704-2358
Facsimile No.: (409) 832-4967
Attention: David R. Atnip
SECURED PARTY:
BANK OF AMERICA, N.A., a Texas
corporation
By: /s/ Gary L. Mingle
--------------------------------------
Gary L. Mingle, Senior Vice President
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