UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
___________
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
___________
Date of Report (Date of
earliest event reported): March
4, 2010
___________
Conn’s,
Inc.
(Exact
name of registrant as specified in its charter)
|
Delaware
(State
or other jurisdiction of
incorporation)
|
000-50421
(Commission
File Number)
|
06-1672840
(IRS
Employer Identification No.)
|
|
3295
College Street
Beaumont,
Texas
(Address
of principal executive offices)
|
77701
(Zip
Code)
|
Registrant’s telephone
number, including area code: (409) 832-1696
___________
Not
applicable
(Former
name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ] Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
[ ] Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01 Entry into a Material Definitive
Agreement.
On March 4, 2010, Conn’s,
Inc. (the “Company”), entered a “Second
Amendment to Loan and Security Agreement”, with Bank of America, N.A., a
national banking association, individually as a “Lender”, and as the
administrative agent for the Lenders party to the Loan and Security Agreement,
effective February 26, 2010, amending and modifying its Loan and Security
Agreement dated as of August 14, 2008, as amended by the “First Amendment to
Loan and Security Agreement” effective January 30, 2010, by
|
(i)
|
replacing
the “Leverage Ratio” covenant with the “Maximum Total Liabilities to
Tangible Net Worth Ratio” covenant, including necessary calculation
definitions and requirements,
|
|
(ii)
|
modifying
the existing “Fixed Charges”
definition,
|
|
(iii)
|
modifying
the existing “Fixed Charges Coverage Ratio”
calculation,
|
|
(iv)
|
modifying
the existing “Applicable Margin” definition and margins based upon the
Fixed Charge Coverage Ratio,
|
|
(v)
|
modifying
the definition of “Dominion Trigger
Period”,
|
|
(vi)
|
modifying
the existing “Unused Line Fee Percentage”
definition,
|
|
(vii)
|
modifying
the existing “Collateral Report” definition and
requirements,
|
|
(viii)
|
modifying
the “Minimum Fixed Charge Coverage Ratio” requirements,
and
|
|
(ix)
|
providing
for an additional “Availability Reserve” calculation and
implementation.
|
Also, on March 5, 2010,
Conn Funding II, L.P., a qualified special purpose entity of the Company,
entered an “Amendment
No. 4 to Second Amended and Restated Note Purchase Agreement”, effective
February
26, 2010, with Three Pillars Funding LLC, JPMorgan Chase Bank, N.A., Park
Avenue Receivables Company, LLC and SunTrust Robinson Humphrey, Inc., amending
and modifying the Second Amended and Restated Note Purchase Agreement dated
August 14, 2008, as amended, supplemented and modified from time to time ("Note
Purchase Agreement"), by (i)
moving the calculation date for certain covenants from February 28, 2010 to
March 31, 2010, and, where applicable, providing that applicable covenant
calculations shall be for the trailing twelve month period ending March 31,
2010, (ii) changing the date of calculation from March 12, 2010 to April 12,
2010, and (iii) agreeing to modify and
amend the Note Purchase Agreement and certain other of the transaction
documents, including without limitation, the Series Supplement, (as defined in
the Base Indenture) for the
2002-A Notes, and enter into certain letter agreements on or before March
12, 2010, to provide for, among other requirements
|
(i)
|
the
addition to and modification of the financial
covenants,
|
|
(ii)
|
the
payment to or the agreement to pay certain structuring and other
fees.
|
|
(iii)
|
a
reduction in each of the commitment and the tenor of the Notes and an
increase in the interest rate applicable to the Notes,
and
|
|
(iv)
|
certain
other modifications to the Series Supplement and the Note Purchase
Agreement.
|
The Amendment
No. 4 to Second Amended and Restated Note
Purchase Agreement also provides that, in the event the Restructuring
Amendments are not executed effective on or before March 12, 2010, such failure
will constitute a “Series 2002-A Payout Event” as defined in the Series
Supplement.
Item
9.01 Financial Statements and Exhibits.
(c) Exhibits
|
Exhibit
Number
|
Exhibit
Title
|
|
|
10.1
|
Second
Amendment to Loan and Security Agreement
|
|
|
10.2
|
Amendment
No. 4 to Second Amended and Restated Note Purchase
Agreement
|
SIGNATURE
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
|
CONN’S,
INC.
|
||
|
Date:
March 5, 2010
|
By:
|
/s/
Michael J. Poppe
|
|
Name:
|
Michael
J. Poppe
|
|
|
Title:
|
Chief
Financial Officer
|
|
Exhibit
10.1
SECOND
AMENDMENT TO LOAN AND SECURITY AGREEMENT
This
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT, dated to be effective as of
February __, 2010 (this “Amendment”) is made
among CONN’S, INC., a Delaware corporation (the “Parent”), CONN
APPLIANCES, INC., a Texas corporation (“CAI”), CONN CREDIT I,
LP, a Texas limited partnership (“CCI”), CONN CREDIT
CORPORATION, INC., a Texas corporation (“CCCI”, together with
CAI and CCI, collectively, “Borrowers”), BANK OF
AMERICA, N.A., a national banking association, individually as a Lender (“BOA”) and as the
administrative agent for the Lenders party to the Loan Agreement (as defined
below) (in such latter capacity, together with any other Person who becomes
Administrative Agent pursuant to Section 12.8 thereof,
the “Agent”)
and the banks and other financial institutions listed on the signature pages
hereof under the caption “Lenders” (together
with BOA, collectively, the “Lenders”).
Background
A.
The Parent, the Borrowers, the Agent and the Lenders have entered into a Loan
and Security Agreement, dated as of August 14, 2008, (as amended, modified or
supplemented from time to time, the “Loan
Agreement”). All capitalized terms used and not otherwise
defined in this Amendment are used as defined in the Loan
Agreement.
B. The
parties hereto wish to amend the certain terms of the Loan
Agreement.
NOW
THEREFORE, in consideration of the premises and the mutual agreements,
representations and warranties herein set forth and for other good and valuable
consideration, the Parent, the Borrowers, the Agent and the Lenders hereto
hereby agree as follows:
Agreement
1.
Amendment to the Loan
Agreement.
(a)
The
following Definitions are added to Section 1.1 of the Loan Agreement in
alphabetical order:
Adjusted Tangible
Assets: all assets of Parent and Borrowers together with assets under the
Existing Securitization Facility, on a consolidated basis, except
(a) patents, copyrights, trademarks, trade names, franchises,
goodwill, and other similar intangibles; (b) assets constituting intercompany
Accounts; (c) assets located and notes and receivables due from obligors
domiciled outside the United States of America or Canada; and (d) fixed assets
to the extent of any write-up in the book value thereof.
Increased Reporting
Period: any time (i) a Default or Event of Default exists, or
(ii) average Availability during any month (as reflected in the Loan Account) is
less than 20% of the amount of aggregate outstanding Revolver Loans and stated
amount of Letters of Credit.
1
Tangible Net Worth:
at any date means an amount equal to: (i) the net book value (after deducting
related depreciation, obsolescence, amortization, valuation and other proper
reserves) at which the Adjusted Tangible Assets of a Person would be shown on a
balance sheet at such date in accordance with GAAP, less (ii) the amount at
which such Person’s liabilities would be shown on such balance sheet in
accordance with GAAP (together with the outstanding obligations under the
Existing Securitization Facility and to the extent such obligations are not
included on the balance sheets, a pro forma calculation thereof), and including
as liabilities all reserves for contingencies and other potential
liabilities.
Total Liabilities to
Tangible Net Worth Ratio: the ratio, determined as of the end of any
Fiscal Quarter for the Parent and its Subsidiaries, on a consolidated basis, of
(a) all items that would be included as liabilities on a balance sheet in
accordance with GAAP (together with the outstanding obligations under the
Existing Securitization Facility and to the extent such obligations are not
included on the balance sheets, a pro forma calculation thereof) as of the last
day of such Fiscal Quarter, to (b) Tangible Net Worth as of the last day of such
Fiscal Quarter.
(b)
The term
“Applicable Margin” as defined in Section 1.1 of the Loan Agreement is hereby
deleted in its entirety and the following is substituted therefor:
Applicable Margin:
with respect to any Type of Revolver Loan, the margin set forth in the chart
below, as determined by the Fixed Charge Coverage Ratio for
the last Fiscal Quarter, measured on a trailing 12 month basis:
|
Level
|
Fixed Charge
Coverage Ratio
|
Base Rate Revolver
Loans
|
LIBOR Revolver
Loans
|
|
I
|
>
1.75:1.00
|
2.25%
|
3.25%
|
|
II
|
≤1.75:1.00
and ≥
1.50:1.00
|
2.50%
|
3.50%
|
|
III
|
<1.50:1.00
|
2.75%
|
3.75%
|
Until
July 1, 2010, margins shall be determined as if Level III were
applicable. Thereafter, the margins shall be subject to increase or
decrease upon receipt by Agent pursuant to Section 10.1.2 of the
financial statements and corresponding Compliance Certificate for the most
recently ended Fiscal Quarter, which change shall be effective on the first day
of the calendar month following receipt. If any financial statements
and Compliance Certificate due in the preceding Fiscal Quarter have not been
received on the due dates set forth in Section 10.1.2, then the
margins shall be determined as if Level III were applicable, from such day
until the first day of the calendar month following actual receipt.
(c)
The term
“Dominion Trigger Period” as defined in Section 1.1 of the Loan Agreement is
hereby deleted in its entirety and the following is substituted
therefor:
2
Dominion Trigger
Period: the period (a) commencing on the day that (i) an Event of Default
occurs, or (ii) average Availability during a month (as reflected in the Loan
Account) is less than 15% of the amount of aggregate outstanding Revolver Loans
and stated amount of Letters of Credit; or (iii) Availability is at any time
less than 10% amount of aggregate outstanding Revolver Loans and stated amount
of Letters of Credit, and (b) ending on the day (i) on which, during the
preceding 90 consecutive days, no Event of Default has existed and Availability
has at all times been greater than 10% of the amount of aggregate outstanding
Revolver Loans; provided, that this
clause (b)(i) shall only be applicable to the first commencement of such period
hereunder, and (ii) determined by Agent in its sole discretion for any
subsequent commencement of such period; provided, that with
respect to any subsequent commencement of such period in order for the period to
end the requirements in clause (b)(i) shall be satisfied.
(d)
The term
“Fixed Charges” as defined in Section 1.1 of the Loan Agreement is hereby
deleted in its entirety and the following is substituted therefor:
Fixed Charges:
without double counting, the sum (together with the applicable charges incurred
under the Existing Securitization Facility) of interest expense (other than
payment-in-kind), scheduled/amortized principal payments made on Borrowed Money,
un-scheduled principal payments made on Borrowed Money (other than payments on
account of the Obligations or any other revolving Debt permitted hereunder or
amortization of Debt under the Existing Securitization Facility), book rent
expense, cash income taxes paid, and Distributions made.
(e)
The term
“Fixed Charge Coverage Ratio” as defined in Section 1.1 of the Loan Agreement is
hereby deleted in its entirety and the following is substituted
therefor:
Fixed Charge Coverage
Ratio: the ratio, determined on a consolidated basis for Parent and its
Subsidiaries for the most recent four Fiscal Quarters, of (a) EBITDAR (including
the interest expense and amortization expense associated with the Existing
Securitization Facility) minus unfinanced Net
Capital Expenditures, to (b) Fixed Charges.
(f)
The term
“Leverage Ratio” as defined in Section 1.1 of the Loan Agreement is hereby
deleted in its entirety.
(g)
The term
“Unused Line Fee Percentage” as defined in Section 1.1 of the Loan Agreement is
hereby deleted in its entirety and the following is substituted
therefor:
Unused Line Fee
Percentage: a percentage equal to (i) 0.75% per annum if the average
daily balance of Revolver Loans and stated amount of Letters of Credit during
the measurement quarter is less than 50% of the Revolver Commitments, and (b)
0.50% per annum if the average daily balance of Revolver Loans and stated amount
of Letters of Credit during the measurement quarter is equal to or greater than
50% of the Revolver Commitments.
3
(h)
Section
8.1 of the Loan Agreement is hereby deleted in its entirety and the following is
substituted therefor:
8.1 Collateral
Reports. By the 20th day of each month and at such other times
as Agent may request, Borrowers shall deliver to Agent (and Agent shall promptly
deliver same to Lenders) (i) a Borrowing Base Certificate prepared as of the
close of business of the previous month (provided, that
Borrowing Base Certificates shall be delivered weekly during a Increased
Reporting Period; further provided, that the
calculation of contracts not qualifying as Eligible Contracts, the CAI
Availability Reserve and CCI Availability Reserve shall be provided by Borrower
on a monthly basis at all times), (ii) an aggregate list of the Borrowers’
Contracts, aged in 30 days contractual delinquency intervals and separately
identifying the revolving Contracts; (iii) a calculation of the Past Due
Percent, the Cash Recovery Percent, Collateral Adjustment Percentage, the
Charge-Off Percent; the Eligible Contracts, the Eligible Inventory, the Eligible
Credit Card Accounts; (iv) an Inventory turn report of the Borrowers’
Inventory; (v) a listing of each Borrower’s Inventory by location, specifying
the amount of Inventory at each location; (vi) the summary balances of the
Borrowers’ “primary portfolio” and “secondary portfolio” (as such portfolios are
described in the Parent’s SEC filings) and delinquent balances of each such
portfolio; (vii) such other reports as to the Collateral of the Borrower as the
Agent shall reasonably request from time to time, together with a reconciliation
to the general ledger; and (viii) a certificate of an officer of the
Borrower Agent certifying as to the accuracy and completeness of the
foregoing. All calculations of Availability in any Borrowing Base
Certificate shall originally be made by Borrowers and certified by a Senior
Officer, provided that Agent may from time to time review and adjust any such
calculation (a) to reflect its reasonable estimate of declines in value of any
Collateral, due to collections received in the Dominion Account or otherwise;
(b) to adjust advance rates to reflect changes in dilution, quality, mix and
other factors affecting Collateral; and (c) to the extent the calculation is not
made in accordance with this Agreement or does not accurately reflect the CAI
Availability Reserve or CCI Availability Reserve.
(i)
Section
10.1.1(b) of the Loan Agreement is hereby deleted in its entirety and the
following is substituted therefor:
(b) Reimburse
Agent for all charges, costs and expenses of Agent in connection with (i)
examinations of any Obligor’s books and records or any other financial or
Collateral matters as Agent deems appropriate, up to 2 times per Loan Year; and
(ii) appraisals of Inventory up to 2 times per Loan Year; provided, however, that if an
examination or appraisal is initiated during an Increased Reporting Period, all
charges, costs and expenses therefor shall be reimbursed by Borrowers without
regard to such limits. Subject to and without limiting the foregoing,
Parent and Borrowers specifically agree to pay Agent’s then standard charges for
each day that an employee of Agent or its Affiliates is engaged in any
examination activities, and shall pay the standard charges of Agent’s internal
appraisal group. This Section shall not be construed to limit Agent’s
right to conduct examinations or to obtain appraisals at any time in its
discretion, nor to use third parties for such purposes.
4
(j)
Section
10.3.1 of the Loan Agreement is hereby deleted in its entirety and the following
is substituted therefor:
10.3.1 Minimum Fixed Charge
Coverage Ratio. Maintain Fixed Charge Coverage
Ratio measured quarterly on the last day of each Fiscal
Quarter on a trailing twelve month basis (i) for the Fiscal Quarter ending
January 31, 2010 and April 30, 2010, at least equal to 1.10:1.00, and (ii)
thereafter at a ratio at least equal to 1.30:1.00.
(k)
Section
10.3.2 of the Loan Agreement is hereby deleted in its entirety and the following
is substituted therefor:
10.3.2
Maximum Total
Liabilities to Tangible Net Worth Ratio. Maintain Total
Liabilities to Tangible Net Worth Ratio not greater than the ratio set forth
below for each Fiscal Quarter, measured as of the last day of each Fiscal
Quarter:
|
Period
|
Ratio
|
|
Fiscal
Quarter ending on or between
January
31, 2010 and April 30, 2010
|
2.00:1.00
|
|
Fiscal
Quarters ending on or between
July
31, 2010 and January 31, 2011
|
1.75:1.00
|
|
Fiscal
Quarter ending April 30, 2011 and
each
Fiscal Quarter thereafter
|
1.50:1.00
|
2.
CCI Availability
Reserve. Pursuant to subsection (g) of the definition of CCI
Availability Reserve, the following reserve shall be implemented commencing upon
the effectiveness of this Amendment. At any time, measured as of the
first day of each month, the Revolving Collateral Adjustment Percent exceeds
15%, an additional Availability Reserve shall be implemented which shall be in
an amount equal to 1% for each whole percentage or fraction that the Revolving
Collateral Adjustment Percent exceeds 15%. “Revolving
Collateral Adjustment Percent” means the Collateral Adjustment Percentage
relating only to the portfolio of revolving Contracts as reported to Agent
pursuant to Section
8.1. For the avoidance of doubt, the adjustments to the
advance rates based on the Collateral Adjustment Percentage shall continue as
currently stated in the Loan Agreement.
3.
Representations and Warranties; No
Default. Each of the Parent and the Borrowers, hereby
represents and warrants as of the effectiveness of this Amendment
that:
(i)
no
Default or Event of Default exists; and
(ii)
its
representations and warranties set forth in Section 9 of the Loan Agreement (as
amended hereby) are true and correct as of the date hereof, as though made on
and as of such date (except to the extent such representations and warranties
relate solely to an earlier date and then as of such earlier date).
5
4.
Effectiveness; Binding Effect;
Ratification. This Amendment shall become effective, as of the
date first set forth above upon receipt by the Agent of (i) the fees set forth
in the Amendment Fee Letter dated February 4, 2010 from Agent to the Borrowers,
and (ii) executed counterparts hereof from the Borrowers and each of
the Lenders whose consent is necessary to amend the Loan Agreement as
set forth in this Amendment, and thereafter this Amendment shall be binding on
the Agent, Borrowers and Lenders and their respective successors and
assigns.
(a)
On and
after the execution and delivery hereof, this Amendment shall be a part of the
Loan Agreement and each reference in the Loan Agreement to “this Loan Agreement”
or “hereof”, “hereunder” or words of like import, and each reference in any
other Loan Document to the Loan Agreement shall mean and be a reference to such
Loan Agreement as amended hereby.
(b)
Except as
expressly amended hereby, the Loan Agreement shall remain in full force and
effect and is hereby ratified and confirmed by the parties hereto.
5.
Miscellaneous. (a) THIS
AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS. EACH
OF THE PARTIES TO THIS AMENDMENT AGREES TO THE NON-EXCLUSIVE JURISDICTION OF ANY
FEDERAL OR STATE COURT SITTING IN OR WITH JURISDICTION OVER LOS ANGELES COUNTY,
CALIFORNIA IN ANY PROCEEDING OR DISPUTE RELATING IN ANY WAY TO THIS AMENDMENT OR
ANY LOAN DOCUMENT AND AGREES THAT ANY SUCH PROCEEDING SHALL BE BROUGHT BY IT
SOLELY IN ANY SUCH COURT. EACH OF THE PARTIES HERETO HEREBY WAIVES
ANY OBJECTION BASED ON FORUM NON CONVENIENS AND ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO
THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT.
(b)
All
reasonable costs and expenses incurred by the Agent in connection with this
Amendment (including reasonable attorneys’ costs) shall be paid by the
Borrowers.
(c)
Headings
used herein are for convenience of reference only and shall not affect the
meaning of this Amendment.
(d) This
Amendment may be executed in any number of counterparts, and by the parties
hereto on separate counterparts, each of which shall be an original and all of
which taken together shall constitute one and the same agreement.
[Signature
Page Follows]
6
IN
WITNESS WHEREOF, the parties have caused this Amendment to be executed by their
respective officers thereunto duly authorized, as of the date first above
written.
|
PARENT:
|
|||
|
CONN’S,
INC.,
|
|||
|
a
Delaware corporation
|
|||
|
By:
|
/s/
Michael J. Poppe
|
||
|
Name:
|
Michael
J. Poppe
|
||
|
Title:
|
Chief
Financial Officer
|
||
|
BORROWERS:
|
|||
|
CONN
APPLIANCES, INC.,
|
|||
|
a
Texas corporation
|
|||
|
By:
|
/s/
Michael J. Poppe
|
||
|
Name:
|
Michael
J. Poppe
|
||
|
Title:
|
Chief
Financial Officer
|
||
|
CONN
CREDIT I, LP,
|
|||
|
a
Texas limited partnership
|
|||
|
By:
|
Conn
Credit Corporation, Inc.,
|
||
|
a
Texas corporation,
|
|||
|
its
sole general partner
|
|||
|
By:
|
/s/
Michael J. Poppe
|
||
|
Name:
|
Michael
J. Poppe
|
||
|
Title:
|
Chief
Financial Officer
|
||
S-1
|
CONN
CREDIT CORPORATION, INC.,
|
|||
|
a
Texas corporation
|
|||
|
By:
|
/s/
Michael J. Poppe
|
||
|
Name:
|
Michael
J. Poppe
|
||
|
Title:
|
Chief
Financial Officer
|
||
S-2
|
AGENT
AND LENDERS:
|
|||
|
BANK
OF AMERICA, N.A.,
|
|||
|
as
Agent and Lender
|
|||
|
By:
|
/s/
John Tolle
|
||
|
Name:
|
John
Tolle
|
||
|
Title:
|
Vice
President
|
||
S-3
|
JPMORGAN
CHASE BANK, NATIONAL
ASSOCIATION
|
|||
|
By:
|
/s/
T. C. Wilde
|
||
|
Name:
|
T.
C. Wilde
|
||
|
Title:
|
Vice
President
|
||
S-4
|
CAPITAL
ONE, N.A.
|
|||
|
By:
|
/s/
Lori S. Mitchell
|
||
|
Name:
|
Lori
S. Mitchell
|
||
|
Title:
|
Executive
Vice President
|
||
S-5
|
UNION
BANK OF CALIFORNIA, N.A.
|
|||
|
By:
|
/s/
Peter Ehlinger
|
||
|
Name:
|
Peter
Ehlinger
|
||
|
Title:
|
Vice
President
|
||
S-6
|
COMPASS
BANK, successor in interest to
GUARANTY
BANK
|
|||
|
By:
|
/s/
Stuart Murray
|
||
|
Name:
|
Stuart
Murray
|
||
|
Title:
|
Sr.
Vice President
|
||
S-7
|
FIRST
TENNESSEE BANK NATIONAL
ASSOCIATION
|
|||
|
By:
|
/s/
R. Keith Kirby
|
||
|
Name:
|
R.
Keith Kirby
|
||
|
Title:
|
Vice
President
|
||
S-8
Exhibit
10.2
AMENDMENT
NO. 4 TO SECOND AMENDED AND RESTATED
NOTE
PURCHASE AGREEMENT
This
AMENDMENT NO. 4 TO SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT (this
“Amendment”),
dated to be effective as of February 26, 2010 (the “Effective Date”) is
made among CONN FUNDING II, L.P. (the “Issuer”), CONN
APPLIANCES, INC. (“Conn Appliances”),
THREE PILLARS FUNDING LLC (f/k/a Three Pillars Funding Corporation), JPMORGAN
CHASE BANK, N.A., PARK AVENUE RECEIVABLES COMPANY, LLC and SUNTRUST ROBINSON
HUMPHREY, INC. Capitalized terms used and not otherwise defined in
this Amendment are used as defined in that certain Base Indenture, dated as of
September 1, 2002, as amended from time to time, between the Issuer and the
Wells Fargo Bank, National Association (as successor to Wells Fargo Bank
Minnesota, National Association), as Trustee (the “Trustee”) or, if not
defined therein, in that certain Amended and Restated Series 2002-A Supplement,
dated as of September 10, 2007, as amended from time to time, between the
Issuer and the Trustee.
Background
A. The
parties hereto have entered into the Second Amended and Restated Note Purchase
Agreement, dated as of August 14, 2008, among the parties hereto (as
amended from time to time, the “Note Purchase
Agreement”) to finance the purchase of Receivables by the Issuer from
Conn Appliances, Inc.
B. The
parties hereto wish to amend the Note Purchase Agreement.
C. The
parties hereto are willing to agree to such an amendment, all as set out in this
Amendment.
Agreement
1. Amendments to the Note Purchase
Agreement. The Note Purchase Agreement is hereby amended as
follows:
|
(a)
|
Section 7.6(a)
of the Note Purchase Agreement is hereby amended by replacing the words
(i) “March 12, 2010” in each and every place where such words appear in
that Section with the words “April 12, 2010” and (ii) “February 28, 2010”
in each and every place where such words appears in that Section with the
words “March 31, 2010.”
|
|
(b)
|
Section 7.6(c)
of the Note Purchase Agreement is hereby amended and restated in its
entirety as follows:
|
|
|
The
Issuer hereby agrees that it shall, and shall cause the Seller, the
Servicer, Wells Fargo Bank, National Association (f/k/a Wells Fargo Bank
Minnesota, National Association), as back-up servicer (the “Back-Up
Servicer”) and the Trustee, and shall obtain all other
consents necessary to, enter into amendments to one or more Transaction
Documents (including, without limitation, the Note Purchase Agreement, the
Series Supplement and, if necessary, the Back-Up Servicing Agreement) and
letter agreements (each such amendment and letter agreement, a “Restructuring
Amendment”, and collectively, the “Restructuring
Amendments”) on or prior to March 12, 2010, which shall provide
for, among other things, (i) the payment to or the agreement to pay to the
Administrator and the Funding Agent (or their designees) of structuring
and other fees by the Seller, as determined by the Administrator and the
Funding Agent, (ii) a reduction in each of the Commitment and the tenor of
the Notes and an increase in the interest rate applicable to the Notes,
each as required by the Administrator and the Funding Agent, (iii) the
addition or modification of financial covenants, (iv) the procurement
of a rating on the Notes at the request of the Administrator or the
Funding Agent, (v) the addition of certain independent manager
covenants, (vi) reports to be delivered by the Servicer regarding Obligor
address verification and the expected effect of reducing or eliminating
in-store payments by Obligors and (vii) such other terms as the
Administrator or the Funding Agent shall request, in each case in form and
substance satisfactory to the Administrator and the Funding Agent (it
being understood and agreed that none of the Administrator, the Funding
Agent, the Conduit Purchaser, the Committed Purchaser, Three Pillars nor
any Noteholder shall have any obligation whatsoever to enter into any
Restructuring Amendment). For the avoidance of doubt, each of
the parties hereto hereby acknowledges and agrees that any failure by any
party to execute (or, if required, consent to) the Restructuring
Amendments, in form and substance satisfactory to the Administrator and
the Funding Agent or any failure of such Restructuring Amendments to
become effective on or prior to March 12, 2010 shall constitute a “Series
2002-A Payout Event” as set forth in Section 9(a)(ii) of the Series
Supplement.
|
2. Representations and Warranties; No
Default.
(a) Each
of the Issuer and Conn Appliances, as Seller and as Servicer, hereby represents
and warrants as of the effectiveness of this Amendment that:
(i) as
of the Effective Date and as of the date of this Amendment is executed, no event
or condition has occurred and is continuing which would constitute a Event of
Default, Pay Out Event, Servicer Default or Block Event; and
(ii) its
representations and warranties set forth in the Note Purchase Agreement (as
amended hereby) and the other Transaction Documents are true and correct as of
the Effective Date and as of the date this Amendment is executed, as though made
on and as of such date (except to the extent such representations and warranties
relate solely to an earlier date and then as of such earlier date), and such
representations and warranties shall continue to be true and correct (to such
extent) after giving effect to the transactions contemplated
hereby.
(b) The
Administrator, on behalf of Three Pillars, and the Funding Agent, on behalf of
PARCO and the Committed Purchaser, hereby represent and warrant that together
that they own 100% of the Notes.
2
3. Effectiveness; Binding Effect;
Ratification.
(a) This
Amendment shall become effective as of the Effective Date and binding on the
parties hereto and their respective successors and assigns upon receipt by the
Administrator and the Funding Agent of (i) executed counterparts hereof from
each of the parties hereto and (ii) the fees and reasonable expenses of the
Administrator and the Funding Agent (including fees of counsel) incurred in
connection with the negotiation, execution and delivery of this
Amendment.
(b) On
and after the execution and delivery hereof, this Amendment shall be a part of
the Note Purchase Agreement as of the Effective Date and each reference in the
Note Purchase Agreement to “this Note Purchase Agreement” or “hereof”,
“hereunder” or words of like import, and each reference in any other Transaction
Document to the Note Purchase Agreement shall mean and be a reference to such
Note Purchase Agreement as amended hereby.
(c) Except
as expressly amended hereby, the Note Purchase Agreement shall remain in full
force and effect and is hereby ratified and confirmed by the parties
hereto.
4. Miscellaneous. i) THIS
AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS. EACH OF THE PARTIES TO THIS AMENDMENT AGREES TO THE
NON-EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND ANY APPELLATE COURT HAVING JURISDICTION TO REVIEW THE
JUDGMENTS THEREOF. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY
OBJECTION BASED ON FORUM NON
CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER
IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL
OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
(b) All
reasonable costs and expenses incurred by the Conduit Purchasers, the
Administrator, the Funding Agent and the Committed Purchaser in connection with
this Amendment (including reasonable attorneys’ costs) shall be paid by the
Issuer.
(c) Headings
used herein are for convenience of reference only and shall not affect the
meaning of this Amendment.
(d) This
Amendment may be executed in any number of counterparts, and by the parties
hereto on separate counterparts, each of which shall be an original and all of
which taken together shall constitute one and the same agreement.
(e) In
case any provision in this Amendment shall be held by a court of competent
jurisdiction to be invalid, illegal or unenforceable, this Amendment shall be
and shall be deemed to be void ab initio and unenforceable
in its entirety.
[Signature Page
Follows]
3
IN
WITNESS WHEREOF, the parties have caused this Amendment to be executed by their
respective officers thereunto duly authorized this 5th day of March,
2010.
CONN
FUNDING II, L.P., as Issuer
By: Conn
Funding II GP, L.L.C., its general partner
By:
/s/ David
R.
Atnip
|
|
Name:
|
David
R. Atnip
|
|
|
Title:
|
Treasurer
|
CONN
APPLIANCES, INC.
By:
/s/ Michael J.
Poppe
|
|
Name:
|
Michael
J. Poppe
|
|
|
Title:
|
Chief
Financial Officer
|
S-1
THREE
PILLARS FUNDING LLC,
as a
Conduit Purchaser
By: /s/ Doris J.
Hearn
|
|
Name:
Doris J. Hearn
|
|
|
Title:
Vice President
|
SUNTRUST
ROBINSON HUMPHREY, INC.,
as
Administrator
By: /s/ Joseph R.
Franke
|
|
Name:
Joseph R. Franke
|
|
|
Title:
Director
|
S-2
JPMORGAN
CHASE BANK, N.A., as Committed
Purchaser
and Funding Agent
By: /s/ Scott
Cornelis
Name
Scott Cornelis
Title
Vice President
PARK
AVENUE RECEIVABLES COMPANY LLC,
as a
Conduit Purchaser
By:
JPMorgan Chase Bank, N.A.,
its
attorney-in-fact
By: /s/ Scott
Cornelis
Name
Scott Cornelis
Title
Vice President
S-3