EXHIBIT 10.3
AMENDED AND RESTATED LOAN AGREEMENT
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THIS AMENDED AND RESTATED LOAN AGREEMENT ("Agreement"), dated as of the
28th day of February, 1997, is made and entered into on the terms and conditions
hereinafter set forth, by and between CHECK INTO CASH, INC., a Delaware
corporation ("Borrower"), and SIRROM CAPITAL CORPORATION, a Tennessee
corporation ("Lender").
RECITALS:
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WHEREAS, Lender made a loan to Creditcorp of Tennessee, Inc. (f/k/a
Creditcorp.), Creditcorp of Kentucky, LLC, Creditcorp of Illinois, LLC,
Creditcorp of Indiana, LLC and Creditcorp of Wisconsin, LLC (the "Original
Borrowers") in the original principal amount of up to $3,500,000 (the "Loan")
pursuant to a Loan Agreement dated as of November 8, 1996 (the "Original Loan
Agreement"), and Borrower has assumed the obligations of the Original Borrowers
in connection with the Loan; and
WHEREAS, Lender and Borrower, in connection with Borrower's assumption of
the obligations of the Original Borrowers under the Loan Agreement, desire to
amend and restate the Loan Agreement;
WHEREAS, in order to induce Lender to agree to the assumption of the Loan
by Borrower, Borrower has made certain representations to Lender; and
WHEREAS, Lender, in reliance upon the representations and inducements of
Borrower, has agreed to the assumption of the Loan by Borrower upon the terms
and conditions hereinafter set forth.
AGREEMENT:
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NOW, THEREFORE, in consideration of the agreement of Lender to make the
Loan, the mutual covenants and agreements hereinafter set forth, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower and Lender hereby agree as follows:
ARTICLE 1
THE LOAN
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1.1 Evidence of Loan Indebtedness and Repayment. Subject to the terms and
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conditions hereof, Lender shall make the Loan to Borrower by wire transfer in
immediately available funds. The Loan shall be advance to Borrower in up to
eight (8) advances (individually, an "Advance" and collectively, the
"Advances"). The first Advance was in the principal amount of $500,000 and was
made on November 8, 1996. The second advance was in the principal amount of
$500,000 and was made on December 26, 1996. Subsequent Advances shall be in
amount of not less than $500,000 each (except for the last advance which may be
for the remainder of the Loan amount) and shall be made as requested by
Borrower, provided, however, that Lender's obligation to fund subsequent
Advances shall be subject to the conditions set forth in Section 4.2. The Loan
shall be evidenced by one (1) or more Secured Promissory Notes in the original
principal amount of the applicable advance, substantially in the form of Exhibit
A attached hereto and incorporated herein by this reference (individually, a
"Note" and collectively, the "Notes"), dated as of the date of the applicable
Advance, executed by Borrower, in favor of Lender. Each Advance shall be payable
in accordance with the terms of the applicable Note. The Notes, this Agreement
and any other instruments and documents executed by Borrower, any guarantor of
the Loan, or any shareholder, member, partner, subsidiary, or affiliate of
Borrower, now or hereafter evidencing, securing or in any way related to the
indebtedness evidenced by the Notes are herein individually referred to as a
"Loan Document" and collectively referred to as the "Loan Documents."
1.2 Processing Fee. A processing fee of $70,000 has been paid to Lender
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in connection with the Loan.
1.3 Purpose(s) of Loan and Use of Proceeds. The purposes of the Loan shall
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be (i) to provide working capital to Borrower and any or all of the other CIC
Entities (as hereinafter defined), (ii) to finance new store expansion
(including expansion into other states through other affiliates of Borrower),
(iii) to pay all costs and expenses incurred by the parties hereto in connection
with the making and documenting of the Loan, including attorneys' fees and
expenses, and (iv) for general corporate and business purposes.
1.4 Prepayment. Borrower any prepay the indebtedness evidenced by the
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Notes in whole or in part at any time and from time to time without premium or
penalty.
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES
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2.1 Borrower's Representations. Borrower hereby represents and warrants to
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Lender as follows:
(a) Corporate Status. Borrower is a corporation duly organized,
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validly existing and in good standing under the laws of the State of
Delaware; and has the corporate power to own and operate its properties, to
carry on its business as now conducted and to enter into and to perform its
obligations under this Agreement and the other Loan Documents to which it
is a party. Borrower is duly qualified to do business and in good standing
in each state in which a failure to be so qualified and in good standing
would have a material adverse effect on Borrower's financial position or
its ability to conduct its business in the manner now conducted.
(b) Other Business Organizations. Schedule 2.1(b) hereto is a
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complete list as of the date hereof of each corporation, limited liability
company, partnership, joint venture or other business organization (whether
now or hereafter existing, the "Subsidiary" or, with respect to all
organizations, the "Subsidiaries"; Borrower, the Subsidiaries, Creditcorp
of Illinois, LLC and Creditcorp of Ohio, LLC are referred to hereinafter,
individually as a "CIC Entity" and collectively as the "CIC Entities") in
which Borrower or any Subsidiary owns, directly or indirectly, and capital
stock or other equity interest, or with respect to which Borrower or any
Subsidiary, alone or in combination with others, is in a control position,
which list shows the jurisdiction of incorporation or other organization
and the percentage of stock or other equity interest of each Subsidiary.
Each CIC Entity which is a corporation is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified to transact business as a foreign
corporation and is in good standing in the jurisdictions listed in Schedule
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2.1(b), and there is no other jurisdiction in which a failure to be so
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qualified and in good standing would have a material adverse effect on such
CIC Entity's financial position or its ability to conduct its business in
the manner now being conducted. Each CIC Entity which is not a corporation
is a limited liability company duly organized and validly existing under
the laws of the jurisdiction of its organization and is duly qualified to
transact business as a foreign entity and is in good standing in the
jurisdictions listed in Schedule 2.1(b), and then is no other jurisdiction
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in which a failure to be so qualified and in good standing would have a
material adverse effect on such CIC Entity's financial position or its
ability to conduct is business in the manner now being conducted. The
outstanding capital stock of each CIC Entity which is a corporation is
validly issued, fully paid and nonassessable. The CIC Entities have good
and valid title to the equity interests in the Subsidiaries shown as owned
by each of them on Schedule 2.1(b), free and clear of all liens, claims,
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charges, restrictions, security interests, equities, proxies, pledges or
encumbrances of any kind, except for any and all pledges in favor of
Lender.
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(c) Authorization. Each of the CIC Entities has full legal right,
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power and authority to conduct its business and affairs. Each of the CIC
Entities has full legal right, power and authority to enter into and
perform its obligations under the Loan Documents to which it is a party,
without the consent or approval of any other person, firm, governmental
agency or other legal entity. The execution and delivery of this Agreement,
the borrowing hereunder, the execution and delivery of each Loan Document
to which each CIC Entity is a party, and the performance by each CIC Entity
of its obligations thereunder are within the powers of such CIC Entity
(corporate or otherwise) and have been duly authorized by all necessary
action (corporate or otherwise) properly taken, have received all necessary
governmental approvals, if any were required, and do not and will not
contravene or conflict with any provision of law, any applicable judgment,
ordinance, regulation or order of any court or governmental agency, the
charter of bylaws or other organizational documents of such CIC Entity, or
any agreement binding upon such CIC Entity. The officer(s) executing this
Agreement, the Note and all of the other Loan Documents to which Borrower
is a party are duly authorized to act on behalf of such Borrower, The
officers executing the Loan Documents on behalf of each of the other CIC
Entities are duly authorized to act on behalf of such other CIC Entities.
(d) Validity and Binding Effect. This Agreement and the other Loan
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Documents to which any CIC Entity is a party are the legal, valid and
binding obligations of such CIC Entity, enforceable in accordance with
their respective terms, subject to limitations imposed by bankruptcy,
insolvency, moratorium or other similar laws affecting the rights of
creditors generally or the application of general equitable principles.
(e) Capitalization of Borrower and CIC Entities Which Are Not
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Subsidiaries.
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(1) As of the date hereof, the authorized capital stock of
Borrower consists solely of ten thousand (10,000) shares of common
stock, $0.01 par value per share ("Common Stock"), of which one
thousand ten (1,010) shares are issued and outstanding (the "Shares")
and sixty-five (65) shares of which shall be reserved for issuance
upon exercise of the Stock Purchase Warrant dated as of the date
hereof and issued to Lender by Borrower (the "Borrower Warrant");
provided, however, that the number shares reserved for issuance upon
exercise of the Borrower Warrant shall be increased from time to time
in accordance with the terms of the Borrower Warrant. As of the date
hereof, Borrower shall not have outstanding any stock or securities
convertible or exchangeable for any shares of its Common Stock or
containing any profit participation features, nor (other than employee
stock options which grant options entitling the holders thereof to
acquire shares which do not exceed 15% of the shares outstanding
provided that the exercise price per share of capital stock under each
option or other right granted under the option plan shall in no event
be less than 100% of the fair market value of the capital
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stock on the date such option or other right is granted) shall it have
outstanding any rights or options to subscribe for or to purchase its Common
Stock or any stock or securities convertible into or exchangeable for its Common
Stock or any stock appreciation rights or phantom stock plans, except for the
Borrower Warrant. As of the date hereof, Borrower shall not be subject to any
obligation (contingent or otherwise) to repurchase, redeem, retire or otherwise
acquire any shares of its capital stock or any warrants, options or other rights
to aquire its capital stock (other than forfeitures which do not require
Borrower to pay consideration), except as set forth in the Warrant. As of the
date hereof, all of the outstanding shares of Borrower's capital stock shall be
validly issued, fully paid and nonassessable. There are no statutory or
contractual preemptive rights, rights of first refusal, antidilution rights or
any similar rights, held by stockholders or option holders of Borrower, with
respect to the issuance of the Warrant or the issuance of the Common Stock upon
exercise of the Warrant. Borrower has not violated any applicable federal or
state securities laws in connection with the offer, sale or issuance of any of
its capital stock, and (assuming Lender is an "accredited investor" as defined
in SEC Rule 501(a) and complies with the covenants therein contained) the offer,
sale and issuance of the Warrant hereunder do not require registration under the
Securities Act or any applicable state securities laws. To the best of
Borrower's knowledge, there are no agreements among Borrower's stockholders with
respect to any aspect of Borrower's affairs.
(2) Creditcorp of Illinois, LLC and Creditcorp of Ohio, LLC are
hereinafter referred to sometimes as the "Non-Subsidiary Entities." As of the
date hereof, the membership interests of the Non-Subsidiary Entities are owned
as follows: W. ▇▇▇▇▇ ▇▇▇▇▇ - 81% and ▇▇▇▇▇ ▇. ▇▇▇▇▇ - 19%. As of the date
hereof, neither of the Non-Subsidiary Entities is subject to any obligation
(contingent or otherwise) to repurchase, redeem, retire or otherwise acquire any
of its membership interests or any warrants, options or other rights to acquire
its membership interests, except for warrants issued or to be issued by the Non-
Subsidiary Entities to Lender in connection with the Loan (the "Non-Subsidiary
Warrants") and employee options which grant options entitling the holders
thereof to acquire interests which do not exceed 15% of the membership interests
outstanding (provided that the exercise price for any interests under each
option or other right granted under the option plan shall in no event be less
than 100% of the fair market value of the interests on the date such option or
other right is granted). There are no statutory or contractual rights of first
refusal, or any similar rights, held by members or option holders of any of the
Non-Subsidiary Entities, with respect to the Non-Subsidiary Entities or the
issuance of membership interests upon exercise of any of the Non-Subsidiary
Warrants. Neither of the Non-Subsidiary Entities has violated any applicable
federal or state securities laws in connection with the offer, sale or issuance
of its membership interest, and (assuming Lender
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is an "accredited investor" as defined in SEC Rule 501(a) and complies with
the covenants therein contained) the offer, sale and issuance of the Non-
Subsidiary Warrants hereunder do not require registration under the
Securities Act or any applicable state securities law. Except for their
Operating Agreements, there are no agreements among the members of the Non-
Subsidiary Entities with respect to any aspect of the Non-Subsidiary
Entities' affairs.
(f) Trademarks, Patents, Etc. Schedule 2.1(f) is an accurate and complete
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list of all patents, trademarks, tradenames, trademark registrations, service
names, service marks, copyrights, licenses, formulas and applications therefor
owned by any of the CIC Entities or used or required by any of the CIC Entities
in the operation of its business, title to each of which is, except as set
forth in Schedule 2.1(f) hereto, held by Borrower, free and clear of all adverse
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claims, liens, security agreements, restrictions or other encumbrances. There is
no infringement action, lawsuit, claim or complaint which asserts that the
operations of any of the CIC Entities violate or infringe the rights or the
trade names, trademarks, trademark registration, service name, service ▇▇▇▇ or
copyright of others with respect to any apparatus or method of any of the CIC
Entities or any adversely held trademark, trade name, trademark registration,
service name, service ▇▇▇▇ or copyright, nor are any of the CIC Entities in any
way making use of any confidential information or trade secrets of any person
except with the consent of such person.
(g) No Conflicts. Consummation of the transactions hereby contemplated and
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the performance of the obligations of any of the CIC Entities under and by
virtue of the respective Loan Documents to which they are a party will not
result in any breach of, or constitute a default under, any material mortgage,
security deed or agreement, deed of trust, lease, bank loan or credit agreement,
corporate charter or bylaws, articles or certificate of organization or
operating agreement, agreement or certificate of limited partnership,
partnership agreement, license, franchise or any other material instrument or
agreement to which any of the CIC Entities are a party or by which any of the
CIC Entities, or their respective properties may be bound or affected or to
which any of the CIC Entities have not obtained an effective waiver.
(h) Litigation. Except as set forth on Schedule 2.1(h), as of the date of
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this Agreement there are no actions, suits or proceedings pending, or, to the
knowledge of Borrower, threatened, against or affecting any of the CIC Entities
or involving the validity or enforceability of any of the Loan Documents at law
or in equity, or before any governmental or administrative agency; and to
Borrower's knowledge, none of the CIC Entities are in default with respect to
any order, writ, injunction, decree or demand of any court or any governmental
authority where such default could have a material adverse effect on it.
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(i) Financial Statements. The financial statements of the CIC Entities,
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dated December 31, 1996, attached hereto as Schedule 2.1(i)(A), are true and
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correct in all material respects have been prepared on the basis of accounting
principles consistently applied, and fairly present the financial condition of
the CIC Entities as of the date(s) thereof. No material adverse change has
occurred in the financial condition of Borrower since the date(s) thereof, and
as of the date of this Agreement, no additional borrowings beyond those
borrowings reflected on such financial statements have been made by any of the
CIC Entities since the date(s) thereof other than as set forth on Schedule
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2.1(i)(B).
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(j) Other Agreements; No Defaults. None of the CIC Entities is a party to
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indentures, loan or credit agreements, leases or other agreements or
instruments, or subject to any charter or corporate restrictions that could have
a material adverse effect on its business, properties, assets, operations or
conditions, financial or otherwise, or its ability to carry out its obligations
under the Loan Documents to which it is a party. None of the CIC Entities is in
default in any respect in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any agreement or
instrument material to its business, including but not limited to this Agreement
and the other Loan Documents to which it is a party, and no other default or
event has occurred and is continuing that with notice or the passage of time or
both would constitute a default or event of default under any of same.
(k) Compliance With Law. Each of the CIC Entities has obtained all
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material licenses, permits and approvals and authorizations necessary or
required in order to conduct its business and affairs as heretofore conducted
and as hereafter intended to be conducted. To Borrower's knowledge, each of the
CIC Entities is in compliance with all laws, regulations, decrees and orders
applicable to it (including but not limited to laws, regulations, decrees and
orders relating to environmental, occupational and health standards and
controls, antitrust, monopoly, restraint of trade or unfair competition), except
to the extent that noncompliance, in the aggregate, cannot reasonably be
expected to have a material adverse effect on its business, operations, property
or financial condition and will not materially adversely affect its ability to
perform its obligations under the Loan Documents to which it is a party.
(l) Debt. Schedule 2.1(l) is a complete and correct list of all credit
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agreements, indentures, purchase agreements, promissory notes and other
evidences of indebteness, guaranties, capital leases and other instruments,
agreements and arrangements presently in effect providing for or relating to
extensions of credit (including agreements and arrangements for the issuance of
letters of credit or for acceptance financing) in respect of which any of the
CIC Entities, or any of the properties thereof, are in any manner directly or
contingently obligated as of the date hereof; and the maximum principal or face
amounts of the credit in question that are outstanding and that can be
outstanding are correctly stated, and all liens of any
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nature given or agreed to be given as security therefor are correctly
described or indicated in such Schedule.
(m) Taxes. Each of the CIC Entities has filed or caused to be filed
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all tax returns that to Borrower's knowledge are required to be filed
(except for returns that have been appropriately extended), and has paid,
or will pay when due, all taxes shown to be due and payable on said returns
and all other taxes, impositions, assessments, fees or other charges
imposed on them by any governmental authority, agency or instrumentality,
prior to any delinquency with respect thereto (other than taxes,
impositions, assessments, fees and charges currently being contested in
good faith by appropriate proceedings, for which appropriate amounts have
been reserved). No tax liens have been filed against any of the CIC
Entities, or any of the property thereof.
(n) [Intentionally omitted.]
(o) Certain Transactions. Except as set forth on Schedule 2.1(o), as
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of the date hereof, none of the CIC Entities is indebted, directly or
indirectly, to any of its shareholders, officers, directors, members,
governors or managers, or to their respective spouses or children, in any
amount whatsoever; except as set forth on Schedule 2.1(o), as of the date
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hereof, none of said shareholders, officers, directors, members, governors
or managers or any members of their immediate families, is indebted to any
of the CIC Entities or has any direct or indirect ownership interest in any
firm or corporation with which any of the CIC Entities have a business
relationship, or any firm or corporation which competes with any of the CIC
Entities, except that shareholders, officers, directors, members, governors
or managers of any of the CIC Entities may own no more than 4.9% of
outstanding stock of publicly traded companies which may compete with any
of the CIC Entities. Except as set forth on Schedule 2.1(o), as of the date
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hereof, no officer, director, member, governor or manager of any of the CIC
Entities or any member of their immediate families, is, directly or
indirectly, interested in any material contract with any of the CIC
Entities. Except as contemplated hereby, none of the CIC Entities is a
guarantor or indemnitor of any indebtedness of any other person, firm or
corporation.
(p) Statements Not False or Misleading. No representation or warranty
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given as of the date hereof by Borrower contained in this Agreement or any
schedule attached hereto or any statement in any document, certificate or
other instrument furnished or to be furnished by any of the CIC Entities to
Lender pursuant hereto, taken as a whole, contains or will (as of the time
so furnished) contain any untrue statement of a material fact, or omits or
will (as of the time so furnished) omit to state any material fact required
to be stated therein and necessary in order to make the statements
contained therein not misleading.
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(q) Margin Regulations. None of the CIC Entities are engaged in the
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business of extending credit for the purpose of purchasing or carrying
margin stock. No proceeds received pursuant to this Agreement will be used
to purchase or carry any equity security of a class which is registered
pursuant to Section 12 of the Securities Exchange Act of 1934, as amended.
(r) Significant Contracts. Schedule 2.1(r) is a complete and correct
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list of all contracts, agreements and other documents pursuant to which any
of the CIC Entities receives, as of the date hereof, revenues in excess of
$25,000 per fiscal year. Each such contract, agreement and other document
is in full force and effect as of the date hereof and Borrower knows of no
reason why such contracts, agreements and other documents would not remain
in full force and effect pursuant to the terms thereof.
(s) Environmental Matters. Each of the CIC Entities has duly complied
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with, and its business, operations, assets, equipment, property, leaseholds
or other facilities are in compliance with, the provisions of all federal,
state and local environmental, health, and safety laws, codes and
ordinances, and all rules and regulations promulgated thereunder, except to
the extent that failure to do so would not have a material adverse effect
on its business. Each of the CIC Entities has been issued and will
maintain all required federal, state and local permits, licenses,
certificates and approvals relating to (1) air emissions; (2) discharges to
surface water or groundwater; (3) noise emissions; (4) solid or liquid
waste disposal; (5) the use, generation, storage, transportation or
disposal of toxic or hazardous substances or wastes (which shall include
any and all such materials listed in any federal, state or local law, code
or ordinance and all rules and regulations promulgated thereunder as
hazardous or potentially hazardous); or (6) other environmental, health or
safety matters, except to the extent that failure to do so would not have a
material adverse effect on its business. None of the CIC Entities has
received notice of, or knows of, or suspects facts which might constitute
any violations of any federal, state or local environmental, health or
safety laws, codes or ordinances, and any rules or regulations promulgated
thereunder with respect to its businesses, operations, assets, equipment,
property, leaseholds, or other facilities. Except in accordance with a
valid governmental permit, license, certificate or approval, with respect
to the operation of the CIC Entities, there has been no emission, spill,
release or discharge into or upon (1) the air; (2) soils, or any
improvements located thereon; (3) surface water or groundwater; or (4) the
sewer, septic system or waste treatment, storage or disposal system
servicing the premises, of any toxic or hazardous substances or wastes at
or from the premises; and accordingly the premises of each of the CIC
Entities are free of all such toxic or hazardous substances or wastes.
There has been no complaint, order, directive, claim, citation or notice by
any governmental authority or any person or entity with respect to (1) air
emissions; (2) spills, releases or discharges to soils or improvements
located thereon, surface water, groundwater or the sewer, septic system or
waste treatment, storage or disposal systems servicing the premises; (3)
noise emissions; (4) solid or liquid waste disposal; (5) the use,
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generation, storage, transportation or disposal of toxic or hazardous substances
or waste; or (6) other environmental, health or safety matters affecting any of
the CIC Entities or their respective businesses, operations, assets, equipment,
property, leaseholds or other facilities. None of the CIC Entities has any
indebtedness, obligation or liability (absolute or contingent, matured or not
matured), with respect to the storage, treatment, cleanup or disposal of any
solid wastes, hazardous wastes or other toxic or hazardous substances (including
without limitation any such indebtedness, obligation, or liability with respect
to any current regulation, law or statute regarding such storage, treatment,
cleanup or disposal).
(t) Fees; Commissions. Except for the processing and commitment fees paid
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pursuant to Section 1.2 and paid to Decosimo Management Consulting, LLP, none of
the CIC Entities has agreed to pay any finder's fee, commission, origination fee
or other fee or charge to any person or entity with respect to the Loan and
investment transactions contemplated hereunder.
(u) ERISA. Each of the CIC Entities is in compliance in all material
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respects with all applicable provisions of ERISA (as defined in Section 3.11
hereof). With respect to each of the CIC Entities, neither a reportable event
nor a prohibited transaction (as defined in ERISA) has occurred and is
continuing with respect to any Plan (as defined in Section 3.11 hereof); no
notice of intent to terminate a Plan has been filed nor has any Plan been
terminated; no circumstances exist which constitute grounds entitling the
Pension Benefit Guaranty Corporation (together with any entity succeeding to any
or all of its functions, the "PBGC") to institute proceedings to terminate, or
appoint a trustee to administer, a Plan, nor has the PBGC instituted any such
proceedings; neither the CIC Entities, nor any commonly controlled entity (as
defined in ERISA) has completely or partially withdrawn from a multiemployer
plan (as defined in ERISA); Each of the CIC Entities and each commonly
controlled entity has met its minimum funding requirements under ERISA with
respect to all of its Plans and the present fair market value of all Plan
property exceeds the present value of all vested benefits under each Plan, as
determined on the most recent valuation date of the Plan and in accordance with
the provisions of ERISA and the regulations thereunder for calculating the
potential liability of each of the CIC Entities, or any commonly controlled
entity to the PBGC or the Plan under Title IV of ERISA; and neither the CIC
Entities, nor any commonly controlled entity has incurred any liability to the
PBGC under ERISA.
(v) Title to Properties. Each of the CIC Entities has good, indefeasible
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and insurable title to, or valid leasehold interests in, all its real properties
and good title to its other assets, free and clear of all liens other than
Permitted Liens (as defined in Section 3.15 hereof).
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(w) Material Adverse Effect. Since December 31, 1996, no event has
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occurred which has resulted or which Borrower reasonably believes could be
expected to result in a material adverse effect on any of the CIC Entity's
ability to perform its obligations under the Loan Documents to which it is
a party. No default or event of default under any other agreement will
occur as a result of the transactions contemplated by this Agreement or by
the Warrant.
(x) Financial Solvency. Neither Borrower nor any of the other CIC
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Entities are entering into the arrangements contemplated by this Agreement
and the other Loan Documents to which each is a party with actual intent to
hinder, delay or defraud either present or future creditors. On and as of
the date hereof on a pro forma basis after giving effect to the
transactions contemplated by the Loan Documents and to all debts incurred
or to be created in connection herewith:
(1) the present fair salable value of the assets of each of the
CIC Entities (on a going concern basis) will exceed its probable
liability on its debts (including its contingent obligations);
(2) None of the CIC Entities has incurred, nor does it intend to
or believe that it will incur, debts (including contingent
obligations) beyond its ability to pay such debts as such debts mature
(taking into account the timing and amounts of cash to be received
from any source, and of amounts to be payable on or in respect of
debts); and the amount of cash available to each of the CIC Entities
after taking into account all other anticipated uses of funds is
anticipated to be sufficient to pay all such amounts on or in respect
of debts, when such amounts are required to be paid; and
(3) Each of the CIC Entities will have sufficient capital with
which to conduct its present and proposed business and the property of
each of the CIC Entities does not constitute unreasonably small
capital with which to conduct its current business at present levels
of operations.
For purposes of this Section 2.1(x) "debt" means any liability on a
(i) right to payment whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured; or (ii) right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such a right to an equitable remedy is reduced to
judgment, fixed, contingent, unmatured, disputed, undisputed, secured, or
unsecured.
(y) Offering of Notes and Warrant. None of the CIC Entities, nor
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anyone acting on their behalf, has offered the Notes, the Warrants (as
hereinafter defined) or any similar securities for sale, to or solicited
any offer to buy any of the same from, or otherwise approached or
negotiated in respect thereof, with, any person other than Lender and not
more than 35 other institutional investors. None of the
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CIC Entities, nor anyone acting on their behalf, has taken, or will take,
any action which would subject the issuance or sale of the Notes or the
Warrants to Section 5 of the Securities Act of 1933, as amended, or the
registration or qualification provisions of the blue sky laws of any state.
(z) Registration Rights. Except as described in the Warrants, none of
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the CIC Entities is under any obligation to register under the Securities
Act of 1933, as amended, or the Trust Indenture Act of 1939, as amended,
any of its presently outstanding securities or any of its securities that
may subsequently be issued.
(aa) Employees. None of the CIC Entities has any current labour
---------
problems or disputes which have resulted in, or which Borrower reasonably
believes could be expected to have, a material adverse effect.
(ab) Issuance Taxes. All taxes imposed on any of the CIC Entities in
--------------
connection with the issuance, sale and delivery of the Notes, the Warrants,
and the capital stock or other equity interests issuable upon exercise of
the Warrants have been or will be fully paid, and all laws imposing such
taxes have been or will be fully satisfied.
(ac) List of Deposit Institutions. Schedule 2.1(ac) sets forth a true
---------------------------- ---------------
and complete list of all deposit institutions at which any of the CIC
Entities has or maintains an account or deposits of any kind.
(ad) Locations and Names. Except as set forth on Schedule 2.1(ad),
------------------- ------------
none of the CIC Entities has, during the five years preceding the date of
this Agreement, been known as or used any other corporate, trade or
fictitious name, nor acquired all or substantially all of the assets,
capital stock or operating units of any person. None of the CIC Entities
has, during the five years preceding the date of this Agreement, had a
business location at any address other than its address(es) set forth on
Schedule 2.1(ad).
---------------
ARTICLE 3
COVENANTS AND AGREEMENTS
------------------------
Borrower covenants and agrees that during the term of this Agreement:
3.1 Payment of Obligations. Borrower shall pay the indebtedness evidenced
----------------------
by the Notes according to the respective terms thereof, and shall timely pay or
perform, as the case may be, all of the other obligations of Borrower to Lender,
direct or contingent, however evidenced or denominated, and however and whenever
incurred, including but not limited to indebtedness incurred pursuant to any
present or future commitment of Lender to Borrower, together with interest
thereon, and any extensions, modifications, consolidations and/or renewals
thereof and any notes given in payment thereof.
12
3.2 Financial Statements and Reports. Borrower shall furnish to Lender (i)
--------------------------------
as soon as practicable and in any event within ninety (90) days after the end of
each fiscal year of the CIC Entities, a consolidated or combined balance sheet
of the CIC Entities as of the close of such fiscal year, a consolidated or
combined statement of earnings and retained earnings of the CIC Entities as of
the close of such fiscal year and a consolidated or combined statement of cash
flows for the CIC Entities for such fiscal year, prepared in accordance with
generally accepted accounting principles consistently applied ("GAAP"), audited
by an independent certified public accountant reasonably acceptable to Lender
and certified by an officer of Borrower and accompained by a certificate of the
President of Borrower stating that to the best of the knowledge of such officer,
each of the CIC Entities has kept, observed, performed and fulfilled each
covenant, term and condition of this Agreement and the other Loan Documents to
which it is a party during the preceding fiscal year and that no Event of
Default, as herein defined, has occurred and is continuing (or if an Event of
Default has occurred and is continuing, specifying the nature of same, the
period of existence of same and the action taken or proposed to be taken in
connection therewith), (ii) within fifteen (15) days after the end of each
calendar month, a consolidated or combined balance sheet of the CIC Entities as
of the close of such month and a consolidated or combined statement of earnings
and retained earnings of the CIC Entities as of the close of such month, all in
reasonable detail (including financial information for the preceding six (6)
months), and prepared substantially in accordance with GAAP (except for the
absence of footnotes and subject to year-end adjustments), and (iii) with
reasonable promptness, such other financial data as Lender may reasonably
request. Without Lender's prior written consent, none of the CIC Entities shall
modify or change any accounting policies or procedures in effect on the date
hereof.
3.3 Maintenance of Books and Records; Inspection. Each of the CIC Entities
--------------------------------------------
shall maintain its books, accounts and records in accordance with GAAP, and
after reasonable notice from Lender, shall permit Lender, its officers,
employees and any professionals designated by Lender in writing, at such CIC
Entity's expense, to visit, inspect and/or audit any of its properties, books
and financial records, and to discuss its accounts, affairs and finances with
such CIC Entity or the principal officers of such CIC Entity during reasonable
business hours, all at such times as Lender may reasonably request; provided
that no such visit, inspection and/or audit shall materially interfere with the
conduct of such CIC Entity's business and the cost of such visit, inspection
and/or audit shall not exceed an aggregate of $5,000 per year.
3.4 Insurance. Without limiting any of the requirements of any of the
---------
other Loan Documents, each of the CIC Entities shall maintain in amounts
customary for entities engaged in comparable business activity (i) to the extent
required by applicable law, worker's compensation insurance (or maintain a
legally sufficient amount of self insurance against worker's compensation
liabilities, with adequate reserves, under a plan approved by Lender, such
approval not to be unreasonably withheld or delayed) and (ii) fire and "all
risk" casualty insurance on its properties against such hazards and in at least
such amounts as are customary in its business. Each of the CIC Entities will
make reasonable efforts to obtain and maintain public liability insurance in an
amount, and at a cost, deemed reasonable to
13
its Board of Directors or Board of Governors, as the case may be. At the request
of Lender, Borrower will deliver forthwith a certificate specifying the details
of such insurance in effect.
3.5 Taxes and Assessments. Each of the CIC Entities shall (i) file all tax
---------------------
returns and appropriate schedules thereto that are required to be filed under
applicable law, prior to the date of delinquency, (ii) pay and discharge all
taxes, assessments and governmental charges or levies imposed upon it with
respect to its income and profits or upon any properties belonging to it, prior
to the date on which penalties attach thereto, and (iii) pay all taxes,
assessments and governmental charges or levies that, if unpaid, might become a
lien or charge upon any of its properties; provided, however, that any of the
CIC Entities, in good faith, may contest any such tax, assessment, governmental
charge or levy described in the foregoing clauses (ii) and (iii) so long as
appropriate reserves are maintained with respect thereto.
3.6 Legal Existence. Each of the CIC Entities shall maintain its legal
---------------
existence and good standing in the state of its formation, and its
qualification and good standing as a foreign entity in each jurisdiction in
which a failure to be so qualified would have a material adverse effect on its
financial position or its ability to conduct its business in the manner now
being conducted.
3.7 Compliance with Law and Other Agreements. Except where the failure to
----------------------------------------
do so would not materially adversely affect such CIC Entity's operations or its
ability to fulfill its obligations under the Loan Documents to which it is a
party, each of the CIC Entities shall maintain its business, operations and
property owned or used in connection therewith in compliance with (i) all
applicable federal, state and local laws, regulations and ordinances governing
such business operations and the use and ownership of such property, and (ii)
all agreements, licenses, franchises, indentures and mortgages to which it is a
party or by which it or any of its properties is bound. Without limiting the
foregoing, each of the CIC Entities shall pay all of its indebtedness promptly
in accordance with the terms thereof.
3.8 Notice of Default. Borrower shall give written notice to Lender of the
-----------------
occurrence of any default or Event of Default under this Agreement or any other
Loan Document promptly upon the occurrence thereof.
3.9 Notice of Litigation. Borrower shall give notice, in writing, to
--------------------
Lender of (i) any actions, suits or proceedings instituted by any persons
whomsoever against any of the CIC Entities, or affecting any of the assets of
any the CIC Entities, wherein the amount at issue is in excess of Twenty-Five
Thousand and No/100ths Dollars ($25,000.00), and (ii) any dispute, not resolved
within sixty (60) days of the commencement thereof, between any of the CIC
Entities on the one hand and any governmental regulatory body on the other hand,
which dispute might materially interfere with the normal operations of any of
the CIC Entities.
14
3.10 Conduct of Business, Name and Location of Business. Each of the CIC
--------------------------------------------------
Entities will continue to engage in a business of the same general type and
manner as conducted by it on the date of this Agreement. Without Lender's prior
written consent (which will not be unreasonably withheld), none of the CIC
Entities shall modify or change any terms or conditions of any material
contracts and/or agreements to which it is a party on the date hereof. None of
the CIC Entities will change its name or any location of its business without
providing Lender with 10 days' written notice of such change. In the event any
of the CIC Entities makes a change of its name or location of business, Borrower
shall cause it to promptly execute any and all financing statements, and
amendments or continuations thereof and any other documents that Lender may
reasonably request to evidence, continue, and/or perfect any security interest
in or pledge of collateral securing the Loan.
3.11 ERISA Plan. If any of the CIC Entities has in effect, or hereafter
----------
institutes, a pension plan that is subject to the requirements of Title IV of
the Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406,
September 2, 1974, ▇▇ ▇▇▇▇. ▇▇▇, ▇▇ ▇.▇.▇.▇. (S) 1001 et seq. (1975), as amended
------
from time to time ("ERISA"), then the following warranty and covenants shall be
applicable during such period as any such plan (the "Plan") shall be in effect:
(i) Borrower hereby warrants that no fact that might constitute grounds for the
involuntary termination of the Plan, or for the appointment by the appropriate
United States District Court of a trustee to administer the Plan, exists at the
time of execution of this Agreement, (ii) Borrower hereby covenants that
throughout the existence of the Plan, the contributions of such CIC Entity under
the Plan will meet the minimum funding standards required by ERISA and such CIC
Entity will not institute a distress termination of the Plan, and (iii) Borrower
covenants that it will send to Lender a copy of any notice of a reportable event
(as defined in ERISA) required by ERISA to be filed with the Labor Department or
the Pension Benefit Guaranty Corporation, at the time that such notice is so
filed.
3.12 Dividends, Distributions, Stock Rights, etc. Except as set forth in
-------------------------------------------
this Section 3.12 below, none of the CIC Entities which are corporations shall
declare or pay any dividend of any kind (other than stock dividends payable to
all holders of any class of capital stock), in cash or in property, on any class
of its capital stock, or purchase, redeem, retire or otherwise acquire for value
any shares of such stock, nor make any distribution of any kind in cash or
property in respect thereof, nor make any return of capital of shareholders, nor
make any payments in cash or property in respect of any stock options, stock
bonus or similar plan (except as required or permitted hereunder), nor make any
payments in cash or property in respect of any bonus or similar plan, nor pay
any performance bonuses (in excess of $400,000 in the aggregate in any calendar
year) and similar payments to management or key employees nor grant any
preemptive rights with respect to its capital stock, without the prior written
consent of Lender. Except as set forth in this Section 3.12 below, none of the
CIC Entities which are limited liability companies shall make any distributions
to their members (except to the extent necessary for members to pay taxes
attributable to income from their operations) or purchase, redeem, retire or
otherwise acquire for value any membership interest, nor make any distribution
of any kind in cash or
15
property in respect thereof, nor make any return of capital of members, nor make
any payments in cash or property in respect of any bonus or similar plan,
performance bonuses (in excess of $400,000 in the aggregate in any calendar
year) and similar payments to management or key employees, nor grant any
preemptive rights with respect to their membership interests, without the prior
written consent of Lender. Notwithstanding anything in this Section 3.12 or
elsewhere to the contrary, nothing herein shall prevent any CIC Entity from
declaring or paying any dividend of any kind or making any other distribution of
any kind to Borrower.
3.13 Guaranties; Loans; Payment of Debt. Without Lender's prior express
----------------------------------
written consent, none of the CIC Entities shall guarantee nor be liable in any
manner, whether directly or indirectly, or become contingently liable after the
date of this Agreement in connection with the obligations or indebtedness in
excess of $100,000 of any person or entity whatsoever, except for the
endorsement of negotiable instruments payable to any of the CIC Entities for
deposit or collection in the ordinary course of business. Without Lender's
prior express written consent, except as set forth in Section 3.14 hereof, none
of the CIC Entities shall (i) make any loan, advance or extension of credit to
any person other than in the normal course of its business or (ii) make any
payment on any subordinated debt.
3.14 Debt. Without the express prior written consent of Lender, none of
----
the CIC Entities may create, incur, assume or suffer to exist indebtedness of
any description whatsoever, excluding (i) the indebtedness evidenced by the
Notes, (ii) the endorsement of negotiable instruments payable to any of the CIC
Entities for deposit or collection in the ordinary course of business, (iii)
indebtedness incurred in the ordinary course of business (each of which,
individually, does not exceed $100,000), (iv) the indebtedness listed on
Schedule 2.1(1) hereto), and (v) loans by any of the CIC Entities to any of the
---------------
other CIC Entities. Notwithstanding the foregoing, Lender agrees that Borrower
may incur additional indebtedness up to $2,500,000 in the aggregate (the
"Additional Indebtedness") from a bank, venture capital company or other
institutional lender and Lender agrees to subordinate the Loan and any security
interest in favor of Lender with respect to the Loan to the Additional
Indebtedness and enter into intercreditor agreements with respect to the
Additional Indebtedness, all on terms reasonably acceptable to Lender.
3.15 No Liens. None of the CIC Entities shall create, incur, assume or
--------
suffer to exist any lien, security interest, security title, mortgage, deed of
trust or other encumbrance upon or with respect to any of its properties, now
owned or hereafter acquired, except the following permitted liens (the
"Permitted Liens"):
(a) liens in favor of Lender;
(b) liens for taxes or assessments or other governmental charges
or levies if not yet due and payable;
(c) liens in connection with the leasing of equipment in favor
of the lessor of such equipment;
16
(d) liens described on Schedule 2.1(I) hereto;
---------------
(e) liens securing the Additional Indebtedness;
(f) rights reserved to or vested in any public authority by the terms
of any provision of law affecting the properties of any of the CIC
Entities;
(g) any liens of mechanics, materialmen and laborers for work or
services performed or materials furnished in connection with the properties
of any of the CIC Entities, which are not due and payable or which are not
delinquent or which, or the amount or validity of which, are being
contested in good faith by proper proceedings or otherwise preliminary to
the institution of such proceedings and for which reasonable reserves have
been established; and
(h) easements, rights-of-way, servitudes, restrictions and other
minor defects, encumbrances and irregularities in the title to such
property (including, without limitation, leases in the ordinary course of
business) which do not materially adversely affect the value thereof.
3.16 Mergers, Consolidations, Acquisitions and Sales. Without the prior
-----------------------------------------------
written consent of Lender which consent will not be unreasonably withheld, none
of the CIC Entities shall (a) be a party to any merger, consolidation or
reorganization unless (i) all of the parties to the merger, consolidation or
reorganization are CIC Entities, (ii) if Borrower is a party to the merger,
consolidation or reorganization, Borrower survives the merger, consolidation or
reorganization, and (iii) Borrower causes each CIC Entity that survives the
merger, consolidation or reorganization to execute and deliver to Lender any and
all documents requested by Lender in order for Lender to receive a pledge of,
and/or security interest in, the capital stock or other ownership interest of
said CIC Entity, a security interest and/or lien on all of the assets of such
CIC Entity, and a guaranty by such CIC Entity of the obligations of Borrower
pursuant hereto, nor (b) except in connection with the organization of
subsidiaries to do business in additional states, purchase or otherwise acquire
all or substantially all of the assets or stock of, or any partnership or joint
venture interest in, any other person, firm or entity, nor (c) except for
Permitted Liens, sell, transfer, convey, grant a security interest in or lease
all or any substantial part of its assets, nor (d) except in connection with the
organization of subsidiaries to do business in additional states, create any
Subsidiaries nor convey any of its assets to any Subsidiary. In the event that
any of the CIC Entities (or individual owners thereof with respect to the
creation of new entities for the purpose of conducting business in other states)
create or acquire any new subsidiaries, then any such CIC Entity shall, and/or
shall cause each new subsidiary to, execute any and all documents requested by
Lender in order for Lender to receive a pledge of, and/or a security interest
in, the capital stock or other ownership of said subsidiary, a security interest
in and/or lien on all of the assets of said subsidiary, and a guarantee by said
subsidiary of the obligations of the CIC Entities pursuant hereto.
17
3.17 Transactions With Affiliates. None of the CIC Entities shall enter
----------------------------
into any transaction, including, without limitation, the purchase, sale or
exchange of property or the rendering of any service, with any affiliate, except
as set forth on Schedule 2.1(o) on the date hereof or, subsequently, in the
---------------
ordinary course of and pursuant to the reasonable requirements of their
respective business and upon fair and reasonable terms no less favorable to them
than they would obtain in a comparable arm's length transaction with a person
not an affiliate. For the purposes of this Section 3.17, "affiliate" shall mean
a person, corporation, partnership or other entity controlling by or under
common control with any CIC Entity.
3.18 Environment. Each of the CIC Entities shall be and remain in
-----------
compliance with the provisions of all federal, state and local environmental,
health, and safety laws, codes and ordinances, and all rules and regulations
issued thereunder; notify Lender immediately of any notice of a hazardous
discharge or environmental complaint received from any governmental agency or
any other party; notify Lender immediately of any hazardous discharge from or
affecting its premises; immediately contain and remove the same, in compliance
with all applicable laws; promptly pay any fine or penalty assessed in
connection therewith; permit Lender to inspect the premises, to conduct tests
thereon, and to inspect all books, correspondence, and records pertaining
thereto; and at Lender's request, and at its expense, provide a report of a
qualified environmental engineer, satisfactory in scope, form, and content to
Lender, and such other and further assurances reasonably satisfactory to Lender
that the condition has been corrected.
ARTICLE 4
CONDITIONS TO CLOSING
---------------------
4.1 Closing of the Loan. The obligation of Lender to fund the Loan on the
-------------------
date hereof (the "Closing Date") is subject to the fulfillment, on or prior to
the Closing Date, of each of the following conditions:
(a) Borrower shall have performed and complied in all material
respects with all of the covenants, agreements, obligations and conditions
required by this Agreement.
(b) Lender shall have received an opinion of Borrower's counsel,
▇▇▇▇▇▇ & Bird dated the Closing Date, in form and substance satisfactory to
Lender's counsel, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, PLLC.
(c) Lender shall have received opinions of local counsel to Check
Into Cash of Iowa, Inc. and Creditcorp of Ohio, LLC (such local counsel
must be satisfactory to Lender's counsel, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, PLLC), dated
the Closing Date, in form and substance satisfactory to Lender's counsel,
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, PLLC.
(d) Borrower shall have delivered to Lender an Amended, Restated and
Consolidated Second Promissory Note executed by Borrower.
18
(e) Borrower shall have delivered to Lender the Borrower Warrant
executed by Borrower, in a form acceptable to Lender and each of the Non-
Subsidiary Warrants executed by the applicable Non-Subsidiary Entity, each
in a form acceptable to Lender (collectively, by the "Warrants").
(f) Borrower shall have delivered to Lender a Security Agreement
executed by Borrower (in form acceptable to Lender) and related UCC-1
Financing Statement(s) (in form acceptable to Lender) executed by
Borrower.
(g) Borrower shall have delivered to Lender a Pledge and Security
Agreement (in a form acceptable to Lender) and a related stock proxy, stock
power, and stock certificate (all in form acceptable to Lender), executed
by each shareholder of Borrower, and a related stock pledge letter (in the
form acceptable to Lender) executed by Borrower with respect to each such
shareholder.
(h) Borrower shall have delivered to Lender a Security Agreement and
Collateral Assignment of Membership Interests (all in a form acceptable to
Lender) and related UCC-1 Financing Statements (all in a form acceptable to
Lender) executed by Borrower with respect to each of the Subsidiaries which
are limited liability companies.
(i) Borrower shall have delivered to Lender a Security Agreement and
Collateral Assignment of Membership Interests (all in form acceptable to
Lender) and related UCC-1 Financing Statements (all in a form acceptable to
Lender) executed by W. ▇▇▇▇▇ ▇▇▇▇▇, Jr. with respect to each of the Non-
Subsidiary Entities.
(j) Borrower shall have delivered to Lender a Security Agreement and
Collateral Assignment of Membership Interests (all in form acceptable to
Lender) and related UCC-1 Financing Statements (all in a form acceptable to
Lender) executed by ▇▇▇▇▇ ▇. ▇▇▇▇▇ with respect to each of the Non-
Subsidiary Entities.
(k) Borrower shall have delivered to Lender a Pledge and Security
Agreement (in form acceptable to Lender) executed by Borrower with respect
to each of the Subsidiaries which are corporations.
(l) Borrower shall have delivered to Lender an Amended and Restated
Security Agreement executed by each of the CIC Entities other than Borrower
(in form acceptable to Lender) and related UCC-1 Financing Statements (in
form acceptable to Lender) executed by each of the CIC Entities other than
Borrower.
(m) Borrower shall have delivered to Lender a Guaranty Agreement
executed by each of the CIC Entities other than Borrower (in form
acceptable to Lender).
(n) Borrower shall have delivered to Lender a Landlord's Consent and
Subordination of Lien with respect to Borrower's corporation headquarters,
executed by the applicable landlord and in a form acceptable to Lender.
19
(o) Lender shall have received copies of the charter (or certificate of
incorporation) and other publicly filed organizational documents of Borrower
(and each of the other CIC Entities which are corporations), certified by the
Secretary of State or other appropriate public official in the jurisdiction in
which Borrower (and each of the other CIC Entities which are corporations) is
incorporated.
(p) Lender shall have received copies of the operating agreements of each
of the CIC Entities which are limited liability companies, certified to Lender
by an officer, manager or member of the applicable CIC Entity, and copies of the
articles of organization and other publicly filed documents of each of the CIC
Entities which are limited liability companies, certified by the Secretary of
State or other appropriate public official jurisdiction in which each of such
CIC Entities is organized.
(q) Lender shall have received certified (as of the date of this
Agreement) copies of all corporate action taken by Borrower, including
resolutions of its Board of Directors, authorizing the execution, delivery and
performance of the Loan Documents to which Borrower is a party.
(r) Lender shall have received certified (as of the date of this
Agreement) copies of all actions taken by each of the CIC Entities other than
Borrower, including resolutions of their directors, members or managers (as
applicable), authorizing the execution, delivery and performance of the Loan
Documents to which each such CIC Entity is a party.
(s) Lender shall have received a certificate as to the legal existence and
good standing of Creditcorp of Ohio, LLC and Check Into Cash of Iowa, Inc.,
issued by the Secretary of State or other appropriate public official in the
jurisdiction in which each such party is incorporated or formed.
(t) With respect to each of the CIC Entities, Lender shall have received
certificates of the Secretaries of State or other appropriate public officials
as to their qualification to do business and good standing in each jurisdiction
in which a failure to be so qualified would have a material adverse effect on
their financial positions or their ability to conduct their business in the
manner now conducted and as hereafter intended to be conducted.
(u) Each of the CIC Entities shall have delivered to Lender a Collateral
Assignment of Note, executed by each of them, in a form acceptable to Lender,
together with all original promissory notes held by each of them.
(v) Borrower shall have delivered to Lender a Trademark Security Agreement
executed by Borrower (in form acceptable to Lender) and related UCC-1 Financing
Statement(s) (in form acceptable to Lender) executed by Borrower.
20
(w) Lender shall have received an Intercreditor Estoppel Agreement
executed by Cleveland Bank & Trust Company in a form acceptable to Lender.
(x) Lender shall have received an Intercreditor Agreement executed by
W. ▇▇▇▇▇ ▇▇▇▇▇, Jr. d/b/a ▇▇▇▇▇ Properties in a form acceptable to Lender.
4.2 Subsequent Advances. The obligation of Lender to fund the subsequent
-------------------
Advances of the Loan on the date of each such Advance is subject to the
fulfillment, on or prior to such date, of each of the following conditions:
(a) An Event of Default (as herein defined) shall not have occurred
and be continuing.
(b) Borrower shall have delivered a Note executed by Borrower in the
original principal amount of the applicable Advance.
(c) Borrower shall have delivered a Closing Certificate (in form
acceptable to Lender), executed by Borrower.
(d) Borrower shall have caused to be delivered to Lender any and all
documents reasonably necessary to secure the Loan with the assets and
ownership interest of any subsidiaries and/or affiliates of Borrower
created for the expansion of Borrower's business into a state other than
one in which Borrower operates on the date hereof.
ARTICLE 5
DEFAULT AND REMEDIES
--------------------
5.1 Events of Default. The occurrence of any of the following shall
-----------------
constitute an Event of Default hereunder:
(a) Default by Borrower in the payment of the principal of or
interest on the indebtedness evidenced by the Note in accordance with the
terms of the Note, which default is not cured within five (5) days;
(b) Any misrepresentation by any of the CIC Entities, or any
subsidiary, member, shareholder or affiliate of any of the CIC Entities, as
to any material matter hereunder or under any of the other Loan Documents,
or delivery by any of the CIC Entities or any subsidiary, member,
shareholder or affiliate of any of the CIC Entities of any schedule,
statement, resolution, report, certificate, notice or writing to Lender
that is untrue in any material respect on the date as of which the facts
set forth therein are stated or certified;
21
(c) Failure of any of the CIC Entities, or any subsidiary, member,
shareholder or affiliate of any of the CIC Entities, to perform any of its
obligations, covenants or agreements under this Agreement, the Note or any
of the other Loan Documents to which it is a party;
(d) Any of the CIC Entities or their members (i) shall generally not
pay or shall be unable to pay its debts as such debts become due; or (ii)
shall make an assignment for the benefit of creditors or petition or apply
to any tribunal for the appointment of a custodian, receiver or trustee
for it or a substantial part of its assets; or (iii) shall commence any
proceeding under any bankruptcy, reorganization, arrangement, readjustment
of debt, dissolution or liquidation law or statute of any jurisdiction,
whether now or hereafter in effect; or (iv) shall have had any such
petition or application filed or any such proceeding commenced against it
in which an order for relief is entered or an adjudication or appointment
is made; or (v) shall indicate, by any act or intentional and purposeful
omission, its consent to, approval of or acquiescence in any such petition,
application, proceeding or order for relief or the appointment of a
custodian, receiver or trustee for it or a substantial part of its assets;
or (vi) shall suffer any such custodianship, receivership or trusteeship to
continue undischarged for a period of sixty (60) days or more;
(e) Any of the CIC Entities shall be liquidated, dissolved,
partitioned or terminated, or the charter thereof shall expire or be
revoked;
(f) A default or event of default shall occur under any of the other
Loan Documents and, if subject to a cure right, such default or event of
default shall not be cured within the applicable cure period;
(g) Any of the CIC Entities shall default in the timely payment or
performance of any obligation now or hereafter owed to Lender in connection
with any other indebtedness of Borrower or any of the CIC Entities now or
hereafter owed to Lender;
(h) Any of the CIC Entities shall have defaulted and continue to be
in default in the timely payment or performance of any other indebtedness
or obligation, which in the aggregate exceeds Fifty Thousand and No/100ths
Dollars ($50,000.00) or materially adversely affects Borrower's financial
condition;
(i) W. ▇▇▇▇▇ ▇▇▇▇▇, Jr. shall no longer be significantly involved in
the management of Borrower.
With respect to any Event of Default described above that is capable of being
cured and that does not already provide its own cure procedure (a "Curable
Default"), the occurrence of such Curable Default shall not constitute an Event
of Default hereunder if such Curable Default is fully cured and/or corrected
within thirty (30) days (ten (10) days, if such Curable Default may be cured by
payment of a sum of money) of notice thereof to Borrower given in accordance
with the provisions hereof; provided, however, that this provision shall not
require notice to
22
Borrower and an opportunity to cure any Curable Default of which Borrower
has had actual knowledge for the requisite number of days set forth.
5.2 Acceleration of Maturity; Remedies. Upon the occurrence of any
----------------------------------
Event of Default described in subsection 5.1(d), the indebtedness evidenced
by the Notes as well as any and all other indebtedness of any of the CIC
Entities to Lender shall be immediately due and payable in full; and upon
the occurrence of any other Event of Default described above, Lender at any
time thereafter may at its option accelerate the maturity of the
indebtedness evidenced by the Notes as well as any and all other
indebtedness of any of the CIC Entities to Lender; all without notice of
any kind. Upon the occurrence of any such Event of Default and the
acceleration of the maturity of the indebtedness evidenced by the Notes:
(a) Lender shall be immediately entitled to exercise any and all
rights and remedies possessed by Lender pursuant to the terms of the
Notes and all of the other Loan Documents; and
(b) Lender shall have any and all other rights and remedies that
Lender may now or hereafter possess at law, in equity or by statute.
5.3 Remedies Cumulative; No Wavier. No right, power or remedy
------------------------------
conferred upon or reserved to Lender by this Agreement or any of the other
Loan Documents is intended to be exclusive of any other right, power or
remedy, but each and every such right, power and remedy shall be cumulative
and concurrent and shall be in addition to any other right, power and
remedy given hereunder, under any of the other Loan Documents or now or
hereafter existing at law, in equity or by statute. No delay or omission by
Lender to exercise any right, power or remedy accruing upon the occurrence
of any Event of Default shall exhaust or impair any such right, power or
remedy or shall be construed to be a waiver of any such Event of Default or
an acquiescence therein, and every right, power and remedy given by this
Agreement and the other Loan Documents to Lender may be exercised from time
to time and as often as may be deemed expedient by Lender.
5.4 Proceeds of Remedies. Any or all proceeds resulting from the
--------------------
exercise of any or all of the foregoing remedies shall be applied as set
forth in the Loan Document(s) providing the remedy or remedies exercised;
if none are specified, or if the remedy is provided by this Agreement, then
as follows:
First, to the costs and expenses, including, without limitation,
reasonable attorney's fees incurred by Lender in connection with the
exercise of its remedies;
Second, to the expenses of curing the default that has occurred,
in the event that Lender elects, in its sole discretion, to cure the
default that has occurred;
Third, to the payment of the obligations of the CIC Entities
under the Loan Documents (the "Obligations"), including but not
limited to the payment of the principal
23
of and interest on the indebtedness evidenced by the Note, in such
order of priority as Lender shall determine in its sole discretion;
and
Fourth, the remainder, if any, to Borrower or to any other person
lawfully thereunto entitled.
ARTICLE 6
TERMINATION
-----------
6.1 Termination of this Agreement. This Agreement shall remain in
-----------------------------
full force and effect until the later of (i) the Maturity Date (as defined
in the Notes), or (ii) the payment by Borrower of all amounts owed to
Lender, at which time Lender shall cancel the Notes and deliver them to
Borrower; provided, however, that if at any time Borrower has satisfied all
obligations to Lender, Borrower may terminate this Agreement by providing
written notice to Lender.
ARTICLE 7
MISCELLANEOUS
-------------
7.1 Performance By Lender. If Borrower shall default in the payment,
---------------------
performance or observance of any covenant, term or condition of this
Agreement, which default is not cured within the applicable cure period,
then Lender may, at its option, pay, perform or observe the same, and all
payments made or costs or expenses incurred by Lender in connection
therewith (including but not limited to reasonable attorney's fees), with
interest thereon at the highest default rate provided in the Note, shall be
immediately repaid to Lender by Borrower and shall constitute a part of the
Obligations. Lender shall be the sole judge of the necessity for any such
actions and of the amounts to be paid.
7.2 Successors and Assigns Included in Parties. Whenever in this
------------------------------------------
Agreement one of the parties hereto is named or referred to, the heirs,
legal representatives, successors, successors-in-title and assigns of such
parties shall be included, and all covenants and agreements contained in
this Agreement by or on behalf of Borrower or by or on behalf of Lender
shall bind and inure to the benefit of their respective heirs, legal
representatives, successors-in-title and assigns, whether so expressed or
not.
7.3 Costs and Expenses. Borrower agrees to pay all reasonable costs
------------------
and expenses incurred by Lender in connection with the making of the Loan,
including but not limited to filing fees, recording taxes, indebtedness
taxes, and reasonable attorneys' fees, promptly upon demand of Lender.
Borrower further agrees to pay all premiums for insurance required to be
maintained by the CIC Entities pursuant to the terms of the Loan Documents
and all of the out-of-pocket costs and expenses incurred by Lender in
connection with the collection of the Loan, amendment to the Loan
Documents, or prepayment of the Loan, including but not limited to
reasonable attorneys' fees, promptly upon demand of Lender.
24
7.4 Assignment. The Note, this Agreement and the other Loan Documents may
----------
be endorsed, assigned and/or transferred in whole or in part by Lender, and any
such holder and/or assignee of the same shall succeed to and be possessed of the
rights and powers of Lender under all of the same to the extent transferred and
assigned. Lender may grant participations in all or any portion of its interest
in the indebtedness evidenced by the Notes, and in such event Borrower shall
continue to make payments due under the Loan Documents to which it is a party to
Lender and Lender shall have the sole responsibility of allocating and
forwarding such payments in the appropriate manner and amounts. Borrower
covenants that none of the CIC Entities shall assign any of its rights nor
delegate any of its duties hereunder or under any of the other Loan Documents
without the prior express written consent of Lender.
7.5 Time of the Essence. Time is of the essence with respect to each and
-------------------
every covenant, agreement and obligation of any of the CIC Entities hereunder
and under all of the other Loan Documents.
7.6 Severability. If any provision(s) of this Agreement or the application
------------
thereof to any person or circumstance shall be invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such provisions
to other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
7.7 Interest and Loan Charges Not to Exceed Maximum Allowed by Law.
--------------------------------------------------------------
Anything in this Agreement, the Notes or any of the other Loan Documents to the
contrary notwithstanding, in no event whatsoever, whether by reason of
advancement of proceeds of the Loan, acceleration of the maturity of the unpaid
balance of the Loan or otherwise, shall the interest and loan charges agreed to
be paid to Lender for the use of the money advanced or to be advanced hereunder
exceed the maximum amounts collectible under applicable laws in effect from time
to time. It is understood and agreed by the parties that, if for any reason
whatsoever the interest or loan charges paid or contracted to be paid by
Borrower in respect of the indebtedness evidenced by the Notes shall exceed the
maximum amounts collectible under applicable laws in effect from time to time,
then ipso facto, the obligation to pay such interest and/or loan charges shall
----------
be reduced to the maximum amounts collectible under applicable laws in effect
from time to time, and any amounts collected by Lender that exceed such maximum
amounts shall be applied to the reduction of the principal balance of the
indebtedness evidenced by the Notes and/or refunded to Borrower so that at no
time shall the interest or loan charges paid or payable in respect of the
indebtedness evidenced by the Notes exceed the maximum amounts permitted from
time to time by applicable law.
7.8 Article and Section Headings: Terminology. Numbered and titled article
-----------------------------------------
and section headings and defined terms are for convenience only and shall not be
construed as amplifying or limiting any of the provisions of this Agreement. All
personal pronouns used in this Agreement, whether used on the masculine,
feminine or neuter gender, shall include all other genders; the singular shall
include the plural and vice versa.
25
7.9 Notices. Any and all notices, elections or demands permitted or
-------
required to be made under this Agreement or any of the Loan Documents shall be
in writing, signed by the party giving such notice, election or demand and shall
be delivered personally, telecopied, or sent by certified mail or overnight via
nationally recognized courier service (such as Federal Express), to the other
party at the address set forth below, or at such other address as may be
supplied in writing and of which receipt has been acknowledged in writing. The
date of personal delivery, telecopy or telex or two (2) business days after the
date of mailing (or the next business day after delivery to such courier
service), as the case may be, shall be the date of such notice, election or
demand. For the purposes of this Agreement:
The Address of Lender is: Sirrom Capital Corporation
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: 615/726-1208
with a copy to: ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, PLLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telecopy: 423/265-9574
The Address of Borrower is: Check into Cash, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: W. ▇▇▇▇▇ ▇▇▇▇▇, Jr.
Telecopy: 423/476-9200
with a copy to: ▇▇▇▇▇▇ & Bird
One Atlantic Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
7.10 Entire Agreement. This Agreement and the other written agreements
----------------
between Borrower and Lender represent the entire agreement between the parties
concerning the subject matter hereof, and all oral discussions and prior
agreements are merged herein; provided, if there is a conflict between this
Agreement and any other document executed contemporaneously herewith with
respect to the Obligations, the provision of this Agreement shall control. The
execution and delivery of this Agreement and the other Loan Documents by the CIC
Entities were not based upon any fact or material provided by Lender, nor were
the
26
CIC Entities induced or influenced to enter into this Agreement or the other
Loan Documents by any representation, statement, analysis or promise by Lender.
7.11 Governing Law and Amendments. This Agreement and all of the Loan
----------------------------
Documents shall be construed and enforced under the laws of the State of
Tennessee applicable to contracts to be wholly performed in such State except to
the extent certain rights and privileges may be granted Lender under applicable
federal laws in which event federal law shall control. No amendment or
modification hereof shall be effective except in a writing executed by each of
the parties hereto.
7.12 Survival of Representations and Warranties. All covenants,
------------------------------------------
representations and warranties contained herein or in any of the Loan Documents,
or made by or furnished on behalf of the CIC Entities in connection herewith or
any of the Loan Documents, shall survive the execution and delivery of this
Agreement and all other Loan Documents and shall continue in full force and
effect so long as the Obligations are unpaid.
7.13 Jurisdiction and Venue. Borrower, for itself and the other CIC
----------------------
Entities, hereby consents to the jurisdiction of the courts of the State of
Tennessee and the United States District Court for the Middle District of
Tennessee, as well as to the jurisdiction of all courts from which an appeal may
be taken from such courts, for the purpose of any suit, action or other
proceeding arising out of any obligations arising under this Agreement or any
other Loan Documents or with respect to the transactions contemplated hereby,
and expressly waives any and all objections it may have as to venue in any of
such courts.
7.14 Waiver of Trial by Jury. LENDER AND BORROWER (FOR ITSELF AND THE
-----------------------
OTHER CIC ENTITIES) HEREBY WAIVE TRIAL BY JURY IN ANY ACTIONS, PROCEEDINGS,
CLAIMS OR COUNTER-CLAIMS, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY,
ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT OR THE LOAN DOCUMENTS.
7.15 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by different parties to this Agreement in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same Agreement.
7.16 Construction and Interpretation. Should any provision of this
-------------------------------
Agreement require judicial interpretation, the parties hereto agree that the
court interpreting or construing the same shall not apply a presumption that the
terms hereof shall be more strictly construed against one party by reason of the
rule of construction that a document is to be more strictly construed against
the party that itself or through its agent prepared the same, it being agreed
that Borrower, Lender and their respective agents have participated in the
preparation hereof.
27
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or
have caused this Agreement to be executed by their duly authorized officers, as
of the day and year first above written.
LENDER:
------
SIRROM CAPITAL CORPORATION, a Tennessee
corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Title: VP
-------------------------
BORROWER:
--------
CHECK INTO CASH, INC., a Delaware
corporation
By: /s/ ▇▇▇▇▇▇ Bechhon
-----------------------------
Title: President
--------------------------
28
FIRST AMENDMENT TO
AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT (the
"Amendment") dated as of the 1st day of July, 1997, is made and entered into on
the terms and conditions hereinafter set forth, by and between CHECK INTO CASH,
INC., a Delaware corporation ("Borrower"), and SIRROM CAPITAL CORPORATION, a
Tennessee corporation ("Lender").
WITNESSETH:
----------
WHEREAS, Lender made a term loan to Borrower in the original principal
amount of Three Million Five Hundred Thousand and No/100ths Dollars
($3,500,000.00) (the "Loan") on the terms and conditions set forth in that
certain Amended and Restated Loan Agreement dated as of February 28, 1997, by
and between Lender and Borrower (as now or hereafter amended, the "Loan
Agreement"); capitalized terms used herein but not otherwise defined shall have
the meanings ascribed thereto in the Loan Agreement; and
WHEREAS, Borrower has created certain new Subsidiaries which are Check into
Cash of California, Inc., Check into Cash of Missouri, Inc., and Check into Cash
of Nebraska, Inc. (collectively, the "New Subsidiaries"), changed the name of
other Subsidiaries, and taken other actions with respect to its corporate
structure, and in connection therewith, is obligated pursuant to the Loan
Agreement to execute and deliver to Lender the additional agreements and
documents described below; and
WHEREAS, this Agreement shall amend the Loan Agreement.
AGREEMENT:
---------
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower and Lender hereby agree as follows:
1. Borrower confirms to Lender that the representations, warranties and
covenants contained in the Loan Agreement apply to all of its Subsidiaries (as
defined in the Loan Agreement).
2. Borrower hereby represents and warrants to Lender that all of the
representations made in Section 2.1 of the Loan Agreement are (i) now applicable
to Borrower and the Subsidiaries and (ii) true and correct as of the date
hereof.
3. Contemporaneous with the execution and delivery of this Amendment.
Borrower shall cause to be delivered to Lender the following:
(a) an Amended and Restated Stock Purchase Warrant executed by Borrower,
together with a warrant valuation letter, each in form and substance acceptable
to Lender;
(b) a Second Amended and Restated Security Agreement and an Amended and
Restated Guaranty Agreement executed by each of the Subsidiaries and in form and
substance satisfactory to Lender;
(c) UCC-3 Financing Statements executed by each of the Subsidiaries
("changed Subsidiaries") whose names have changed since February 28, 1997, for
filing with the Tennessee Secretary of State and each of the Changed
Subsidiaries' state of incorporation, each in form and substance satisfactory to
Lender;
(d) UCC-1 Financing Statements executed by each of the New Subsidiaries as
debtors for filing with the Tennessee Secretary of State and the state of each
of the New Subsidiaries' incorporation, each in form and substance statisfactory
to Lender;
(e) a First Amended to Security Agreement and Collateral Assignment of
Membership Interests and an Amended and Restated Membership Assignment Letter,
each executed by Borrower and in form and substance satisfactory to Lender;
(f) Amendments to Pledge and Security Agreement executed by ▇▇▇▇▇ ▇▇▇▇▇
and ▇▇▇▇▇ ▇▇▇▇▇ in form and substance acceptable to Lender;
(g) such additional stock powers, stock proxies, and other instruments as
may be required to evidence Lender's security interests and/or pledges in
Borrower and the Subsidiaries, all in form and substance satisfactory to Lender;
(h) certified resolutions of the New Subsidiaries approving the Loan
Documents to which each is a party; and
(i) UCC-3 Amendments executed by Borrower and Check into Cash Holdings,
Inc. reflecting the name changes to the Changed Subsidiaries.
4. The terms "Loan Document" and "Loan Documents" as defined in the Loan
Agreement are amended to include this Amendment and any and all other documents
relating to the Loan or the Additional Loan (i) by and between Borrower or any
other person or entity and Lender or (ii) executed by Borrower or any other
person or entity in favor of Lender. All capitalized terms not defined herein
shall have the meanings given to them in the Loan Agreement.
5. Except as modified and amended hereby, the Loan Agreement shall remain
in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment, or
have caused this Amendment to be executed by their duly authorized officers, as
of the day and year first above written.
BORROWER: LENDER:
-------- ------
CHECK INTO CASH, INC., SIRROM CAPITAL CORPORATION,
a Delaware corporation a Tennessee corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------- -----------------------------
Title: VP Title: VP
------------------------ ------------------------
3
SECOND AMENDMENT TO
-------------------
AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
THIS SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT (the
"Amendment"), dated as of September ___,1997, is made and entered into on the
terms and conditions hereinafter set forth, by and between CHECK INTO CASH,
INC., a Delaware corporation ("Borrower"), and SIRROM CAPITAL CORPORATION, a
Tennessee corporation ("Lender").
WITNESSETH
----------
WHEREAS, Lender and Borrower entered into an Amended and Restated Loan
Agreement, dated as of February 28, 1997, ("Loan Agreement") and subsequently
agreed to a First Amendment to Amended and Restated Loan Agreement, dated as of
June 2, 1997; and
WHEREAS, Borrower is an "S" corporation under the Internal Revenue Code of
1986, as amended; and
WHEREAS, Lender and Borrower agree that the affirmative covenants of
Borrower in the Loan Agreement should not prevent Borrower from making
distributions to its shareholders for the purpose of paying federal income
taxes on the income of Borrower that is attributed to Borrower's shareholders;
and
WHEREAS, Lender and Borrower agree that the covenants of the Borrower in
the Loan Agreement should not prevent the Borrower from granting a stock bonus
to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or extending a loan to ▇▇▇▇▇▇▇▇ to pay income taxes incurred
in connection with such bonus; and
WHEREAS, this Amendment shall amend the Loan Agreement.
AGREEMENT
---------
1. The Loan Agreement is hereby amended by striking the last sentence of
Section 3.l2 and replacing that sentence with the following:
"Notwithstanding anything in this Section 3.12 or elsewhere to the
contrary, nothing herein shall prevent any CIC Entity from declaring or paying
any dividend of any kind or making any other distribution of any kind to
Borrower, nor shall anything in this Section 3.12 or elsewhere prevent Borrower,
while it retains its status as an "S" corporation under the Internal Revenue
Code, from declaring or paying any dividend to is shareholders for the payment
of federal income taxes on Borrower's income that is attributed to such
shareholders."
2. The parties hereto agree that any distributions made by Borrower prior
to the date of this Amendment that would have been permissible if this Amendment
had been in effect, are hereby approved by Lender.
3. Lender hereby waives Borrower's covenants, contained in Sections 3.12
and 3.13 of the Loan Agreement, not to pay dividends, make distributions or make
any payments in cash or property to its shareholders or employees, nor to make
loans, advances or other extensions of credit, to the extent such covenants
prevent Borrower from making the following distributions, paying the following
bonuses or making the following loans:
(i) July 1, 1997, stock bonus to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, pursuant to that
certain Employment Agreement by and between Borrower and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, dated
July 31, 1997 (the "▇▇▇▇▇▇▇▇ Employment Agreement"); and
(ii) Loan to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, on a future date to be determined, pursuant
to Section 6(c) of the ▇▇▇▇▇▇▇▇ Employment Agreement, for the purpose of paying
federal income taxes incurred by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in connection with the July 1,
1997 stock bonus, and the future forgiveness of such loan in consideration of
▇▇. ▇▇▇▇▇▇▇▇' continued service to Borrower.
4. Pursuant to Section 3.13 of the Loan Agreement, this letter shall also
constitute Lender's written consent to Borrower's extension of a loan to ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, pursuant to Section 6(c) of the ▇▇▇▇▇▇▇▇ Employment Agreement, in the
amount of the income taxes payable as a result of the July 1, 1997 stock bonus,
and the future forgiveness of such loan by the Borrower in consideration of
▇▇▇▇▇▇▇▇' continued service to Borrower.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers, as of the date first written above.
SIRROM CAPITAL CORPORATION
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------
Title: VP
--------------------
CHECK INTO CASH, INC.
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------
Title: VP
--------------------
-2-
THIRD AMENDMENT TO AMENDED
AND RESTATED LOAN AGREEMENT
---------------------------
THIS THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT ("Amendment")
dated as of the 26th day of June, 1998, is made and entered into on the terms
and conditions hereinafter set forth, by and between CHECK INTO CASH, INC., a
Delaware corporation ("Borrower"), SIRROM CAPITAL CORPORATION, a Tennessee
corporation ("Lender"), and SIRROM FUNDING CORPORATION, a Delaware corporation
and a wholly-owned subsidiary of Lender ("Funding").
RECITALS:
--------
WHEREAS, Lender has previously made a term loan to Borrower in the original
principal amount of Three Million Five Hundred Thousand and No/100ths Dollars
($3,500,000.00) (the "Original Loan") on the terms and conditions set forth in
that certain Amended and Restated Loan Agreement dated February 28, 1997, by and
between Lender and Borrower, as amended by that certain First Amendment to
Amended and Restated Loan Agreement dated July 1, 1997 by and between Lender and
Borrower (the "First Amendment") and that certain Second Amendment to Amended
and Restated Loan Agreement dated September 1997 (the "Second Amendment") (the
Loan Agreement, as amended by the First Amendment and the Second Amendment, and
as now or hereafter amended, is hereinafter referred to as the "Loan
Agreement");
WHEREAS, the Original Loan is further evidenced and secured by certain
agreements, documents and instruments as more particularly described in the Loan
Agreement and defined therein as the "Loan Documents";
WHEREAS, Borrower desires to borrow from Lender and Lender desires to lend
to Borrower up to an additional Three Million Five Hundred Thousand and
No/100ths Dollars ($3,500,000.00) (the "Additional Loan") pursuant to a Secured
Promissory Note of even date herewith by Borrower in favor of Lender, on the
terms and conditions set forth in the Loan Agreement, secured by the Loan
Documents, including without limitation (a) a security interest in certain
tangible and intangible personal property granted pursuant to that certain
Security Agreement dated February 28, 1997, by and between Borrower and Lender;
(b) a security interest in certain royalties, trademarks and other general
intangibles granted pursuant to the Trademark Security Agreement dated February
28, 1997, by and between Borrower and Lender; (c) a pledge of certain securities
pursuant to the terms of that certain Pledge and Security Agreement dated
February 28, 1997, as amended, by and between ▇▇▇▇▇ ▇▇▇▇▇ and Lender (the "A.J.
Pledge Agreement"); (d) a pledge of certain securities pursuant to the terms of
that certain Pledge and Security Agreement dated February 28, 1997, as amended,
by and between ▇▇▇▇▇ ▇▇▇▇▇ and
Lender (the "J.J. Pledge Amendment"); (e) an Amended and Restated Guaranty
Agreement dated July 1, 1997 by the Current Subsidiaries (as defined on the
execution pages hereof) in favor of Lender (the "Guaranty"); (f) a Second
Amended and Restated Security Agreement dated July 1, 1997 by and between the
Current Subsidiaries and Lender (the "Guarantor Security Agreement"); (g) a
Security Agreement and Collateral Assignment of Membership Interests dated
February 28, 1997, as amended, by and between Borrower and Lender; and (h) a
Pledge and Security Agreement dated February 28, 1997, by and between Borrower
and Lender (the "Borrower Pledge Agreement").
WHEREAS, Lender has transferred the Original Loan and the Loan Documents to
Funding, subject to the reservation by Lender of certain rights with respect to
the making of additional loans to Borrower; and
WHEREAS, this Amendment shall amend the Loan Documents.
AGREEMENT:
---------
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower, Funding and Lender hereby agree as follows:
1. Capitalized terms used herein but not otherwise defined shall have the
meanings ascribed thereto in the Loan Agreement.
2. Section 1.1 of the Agreement is hereby amended to read in its entirety
as follows:
(a) Subject to the terms and conditions hereof, Lender shall make the
Loan to Borrower by wire transfer in immediately funds. The Loan shall be
evidenced by (i) certain Secured Promissory Notes (collectively, the
"Original Notes") in the aggregate original principal amount of Three
Million Five Hundred Thousand and No/100th Dollars ($3,500,000.00), dated
respectively, November 8, 1996, December 26, 1996, March 11, 1997, April 3,
1997, April 17, 1997, May 2, 1997, and May 21, 1997, each in the original
principal amount of Five Hundred Thousand and No/100th Dollars
($500,000.00), executed by Borrower in favor of Lender, substantially in
the form attached hereto as Exhibit A and incorporated herein by this
reference and (ii) a Secured Promissory Note (the "New Note") in the
original principal amount of up to Three Million Five Hundred Thousand and
No/100th Dollars ($3,500,000.00), dated of even date herewith, executed by
Borrower in favor of Lender, substantially in the form of Exhibit A
attached to the Third Amendment to Loan Agreement and
2
Loan Documents and incorporated herein by this reference (the Original
Notes and the New Note shall be referred to herein collectively as the
"Notes"). The Loan shall be payable in accordance with the Notes. The
Notes, this Agreement and any other instruments and documents executed by
Borrower, any guarantor of the Loan, or any shareholder, member, partner,
subsidiary, or affiliate of Borrower, now or hereafter evidencing, securing
or in any way related to the indebtedness evidenced by the Notes are herein
individually referred to as a "Loan Document" and collectively referred to
as the "Loan Documents."
(b) The portion of the Loan represented by the New Note shall be
advanced to Borrower in multiple advances (individually, an "Advance" and
collectively, the "Advances"). The first Advance shall be in the principal
amount of $750,000 and shall be made on the date hereof. The subsequent
Advances shall be in increments of at least $500,000. Lender's obligation
to fund the subsequent Advances shall be subject to the conditions set
forth in Section 4.2. In no event shall the subsequent Advances be made
after October 15, 1998.
3. Section 4.2. of the Loan Agreement is hereby amended to read as
follows:
4.2 Subsequent Advances. The obligation of Lender to fund the
-------------------
subsequent Advances on the date of any Advance is subject to the
fulfillment, on or prior to such date, of each of the following conditions:
(a) An Event of Default (as herein defined) shall not have
occurred and be continuing;
(b) Borrower shall have delivered a Closing Certificate (in a
form acceptable to Lender), executed by Borrower; and
(c) Borrower shall have delivered to Lender a Closing Statement
(in a form acceptable to Lender), executed by Borrower.
4. The obligations of Borrower in connection with and/or relating to the
Additional Loan are further evidenced and/or secured by the Loan Documents. In
connection therewith:
(a) Each of the New Subsidiaries (as defined in the execution pages
hereof) hereby agree to be a party to and subject to the Guaranty in
accordance with its terms. Without limiting the foregoing, each of the New
Subsidiaries guarantees to Lender the full and prompt payment and
performance of (a) the indebtedness evidenced by the Notes,
3
including, without limitation, principal and any and all interest accrued
or to accrue thereon, (b) the obligations of Borrower to Lender pursuant to
the Notes, the Loan Agreement and any and all other instruments, documents
and/or agreements now or hereafter further evidencing, securing or
otherwise related to the indebtedness evidenced by the Notes (collectively
the "Loan Documents") and (c) any and all other indebtedness and other
obligations of Borrower to Lender, direct or contingent (including but not
limited to obligations incurred as indorser, guarantor or surety), however
evidenced or denominated, and however and whenever incurred, including but
not limited to indebtedness incurred pursuant to any present or future
commitment of Lender to Borrower (the aforesaid indebtedness and other
obligations are sometimes herein collectively referred to as the
"Guaranteed Obligations").
(b) Each of the New Subsidiaries agree to be a party to and subject
to the Guarantor Security Agreement in accordance with its terms. Without
limiting the foregoing, each of the New Subsidiaries ("Grantor") hereby
grants to Lender a security interest in the following described property
and any and all proceeds and products thereto and accessions thereto:
(i) Equipment. All equipment and other tangible personal
---------
property of Grantor of any kind and description, whether now owned or
hereafter acquired and wherever located, together with all parts,
accessories and attachments and all replacements thereof and additions
thereto;
(ii) Inventory, Accounts, Contract Rights, Chattel Paper,
---------------------------------------------------
Documents, Instruments and General Intangibles. All of Grantor's
----------------------------------------------
inventory and any agreements for lease of same and rentals therefrom,
and all of Grantor's accounts, accounts receivable, contract rights,
chattel paper, software, documents, instruments and general
intangibles (including but not limited to goodwill, patents and
trademarks) and the proceeds therefrom, whether now in existence or
owned or hereafter arising or acquired, entered into or created, and
wherever located; and whether held for lease or sale, or furnished or
to be furnished under contracts of service;
(iii) Trademarks, Etc. All trademarks, trade names, and service
---------------
marks now held or hereafter acquired by Grantor, both those that are
registered with the United States Patent and Trademark office and any
unregistered marks used by Grantor in the United States, and trade
dress, including logos and designs, in connection with which any such
marks are used,
4
together with all registrations regarding such marks and the rights to
renewals thereof, and the goodwill of the business of Grantor
symbolized by such marks, and all patents, licenses, technology and
other intangible property of Grantor, whether now owned or
hereafter acquired;
(iv) Copyrights. All copyrights now held or hereafter acquired by
----------
Grantor and any applications for U.S. copyrights hereafter made by
Grantor; and
(v) Proprietary Information, Computer Data, Etc. All proprietary
--------------------------------------------
information and trade secrets of Grantor with respect to Grantor's
business, whether now owned or hereafter acquired, and all of
Grantor's computer programs and the information contained therein and
all intellectual property rights with respect thereto, whether now
owned or hereafter acquired.
5. Borrower hereby represents and warrants to Lender that all of the
representations made in Section 2 of the Loan Agreement are true and correct as
of the date hereof except for those representations and warranties which
expressly relate to an earlier date (which representations and warranties shall
be true and correct as of such date), and except as modified or supplemented by
Schedule A attached hereto and incorporated herein by this reference. With
----------
respect to any representations and warranties which expressly relate to an
earlier date, Borrower represents that it has set forth on Schedule A any
----------
exceptions to such representations and warranties that are necessary to make
them true and correct as of the date hereof.
6. Borrower hereby represents and warrants to Lender that the address
designated as Borrower's principal place of business on Schedule B attached
----------
hereto and incorporated herein by this reference is the principal place of
Borrower's business and that all of the locations set forth on said Schedule B
----------
are the records of all tangible collateral and the place where the records
concerning all intangible collateral are kept and/or maintained.
7. Borrower shall pay to Lender a processing fee of 2% of the Additional
Loan which will be paid on a pro rata basis at the time each Advance. In
addition, Borrower shall pay all expenses of Lender incurred in connection with
the Additional Loan upon the funding of the First Advance of the Additional
Loan.
8. Borrower hereby covenants to Lender that it shall use the proceeds of
the Additional Loan for working capital.
5
9. The obligation of Lender to fund the Additional Loan on the date
hereof is subject to Borrower's delivery to Lender or Lender's receipt of each
of the following:
(a) a Secured Promissory Note executed by Borrower, in form and
substance acceptable to Lender;
(b) a Stock Purchase Warrant executed by Borrower, in form and
substance acceptable to Lender and a related warrant valuation letter
executed by Borrower in form acceptable to Lender;
(c) an opinion of Borrower's counsel ▇▇▇▇▇▇ & Bird, in form and
substance satisfactory to Lender's counsel;
(d) a BIDCO Report executed by Borrower, in form and substance
acceptable to Lender;
(e) a Second Amendment to a Subordination Agreement between
NationsBank of Tennessee, Inc., N.A. ("NationsBank") and Borrower executed
by NationsBank in form acceptable to Lender;
(f) a UCC-3 statement of Amendment executed by Borrower for recording
with the Tennessee Secretary of State to reflect the increase in the
maximum principal indebtedness of the Loan;
(g) UCC-1 Financing Statements executed by each of the New
Subsidiaries for recording with the Tennessee Secretary of State and their
respective states of incorporation;
(h) an Amendment to Stock Pledge Agreement executed by Borrower in
form acceptable to Lenders together with related stock proxies, stock
powers and stock certificates with respect to each of the New Subsidiaries
(all in form acceptable to Lender), executed by Borrower, and related stock
pledge letters (all in form acceptable to Lender) executed by each of the
New Subsidiaries.
(i) copies of the certificates or articles of incorporation of
Borrower and each of the New Subsidiaries certified by the Secretary of
State or other appropriate public official in their respective states of
incorporation;
(j) a certificate as to the legal existence and good standing of
Borrower and each of the New Subsidiaries issued by the Secretary of State
or other appropriate public official in their respective states of
incorporation;
(k) certified resolutions of the Board of Directors of Borrower and
each of the Subsidiaries (including the Subsidiaries) set forth on the
signature page hereof
6
authorizing their participation in the transactions set forth and
contemplated hereby; and
(l) the execution of this Agreement by each of the parties set forth
on the execution pages hereof.
10. Borrower represents and warrants that (a) the Loan Documents are
valid, binding and enforceable against Borrower and each of the New Subsidiaries
and the Current Subsidiaries according to their terms, subject to principles of
equity and laws applicable to the rights of creditors generally, including
bankruptcy laws, and (b) no default or Event of Default presently exists under
the Loan Documents and no condition presently exists which, with the giving of
notice, the passing of time, or both would cause such a default or Event of
Default. Borrower further acknowledges that the obligations of Borrower and each
of the New Subsidiaries and the Current Subsidiaries evidenced by the Loan
Documents are not subject to any counterclaim, defense or right of setoff, and
Borrower hereby releases Lender from any claim, known or unknown, that Borrower
may have against Lender as of the date of execution of this Amendment.
11. The terms "Loan Document" and "Loan Documents" as defined in the Loan
Agreement are amended to include this Amendment.
12. This Amendment may be executed in any number of counterparts and by
different parties to this Amendment in separate counterparts, each of which when
so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same Amendment.
13. Borrower hereby acknowledges that the Loan Documents have been
assigned to Funding, subject to the reservation of certain rights with respect
to the making of additional loans, and that all references to Lender in the Loan
Documents shall hereafter include Funding and Funding is and shall be entitled
to all rights and benefits thereunder.
14. Except as modified and amended hereby, the Loan Documents shall remain
in full force and effect.
7
IN WITNESS WHEREOF, the parties hereto have executed this Amendment,
or have caused this Amendment to be executed by their duly authorized
officers, as of the day and year first above written.
BORROWER: LENDER:
-------- ------
CHECK INTO CASH, INC. SIRROM CAPITAL CORPORATION,
a Delaware corporation a Tennessee corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------- --------------------------
Title: VP Title: VP
----------------------- ------------------------
SIRROM FUNDING CORPORATION,
a Delaware corporation
By:▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Title: VP
-----------------------
8
CURRENT SUBSIDIARIES
--------------------
The following parties (the "Current Subsidiaries") join in the execution of
this Amendment to acknowledge and confirm that the Additional Loan is guaranteed
pursuant to the Guaranty and is secured by the Guarantor Security Agreement.
The terms of the Guaranty and the Guarantor Security Agreement are hereby
modified accordingly.
CREDITCORP OF TENNESSEE, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Title: VP
------------------------
CHECK INTO CASH HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Title: VP
------------------------
CHECK INTO CASH OF IOWA, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Title: VP
------------------------
CHECK INTO CASH OF KENTUCKY, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Title: VP
------------------------
CHECK INTO CASH OF INDIANA, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Title: VP
------------------------
CHECK INTO CASH OF ILLINOIS, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Title: VP
------------------------
9
CHECK INTO CASH OF WISCONSIN, LLC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Title: VP
----------------------------
CHECK INTO CASH OF OHIO, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Title: VP
----------------------------
▇▇▇▇▇ MANAGEMENT SERVICES, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Title: VP
----------------------------
CHECK INTO CASH OF NEBRASKA, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Title: VP
----------------------------
CHECK INTO CASH OF MISSOURI, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Title: VP
----------------------------
CHECK INTO CASH OF CALIFORNIA, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Title: VP
----------------------------
10
NEW SUBSIDIARIES
----------------
The following parties (the "New Subsidiaries") join in the execution of
this Amendment for the purpose of agreeing to be bound by Subsections 4(a) and
4(b) hereof.
CHECK INTO CASH OF PENNSYLVANIA,
INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Title: VP
------------------------
CHECK INTO CASH OR OREGON, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Title: VP
------------------------
CHECK INTO CASH OR WASHINGTON, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Title: VP
------------------------
CHECK INTO CASH OF NORTH CAROLINA,
INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Title: VP
------------------------
CHECK INTO CASH OF MISSISSIPPI,
INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Title: VP
------------------------
CHECK INTO CASH OF SOUTH CAROLINA,
INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Title:
------------------------
11
PLEDGES
-------
The following parties join in the execution of this Amendment to
acknowledge and confirm that the Additional Loan is secured by (i) the A.J.
Pledge Agreement, and (ii) the J.J. Pledge Agreement, as applicable.
/s/ W. ▇▇▇▇▇ ▇▇▇▇▇ Jr.
-------------------------
W. ▇▇▇▇▇ ▇▇▇▇▇, Jr.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
12