Exhibit 99.1
------------
SECOND AMENDMENT TO CREDIT AGREEMENT
------------------------------------
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is made and
entered into effective as of November 12, 2004 by and among CONN APPLIANCES,
INC., a Texas corporation ("CAI") and CAI CREDIT INSURANCE AGENCY, INC., a
Louisiana corporation ("Louisiana Insurance Company") (CAI and Louisiana
Insurance Company being herein collectively called "Borrowers"); each of the
Lenders which is or may from time to time become a party to the Credit Agreement
(as defined below) (individually, a "Lender" and, collectively, the "Lenders"),
and JPMORGAN CHASE BANK, acting as administrative agent for the Lenders (in such
capacity, together with its successors in such capacity, the "Administrative
Agent").
RECITALS
--------
A. The Borrowers, the Lenders and the Administrative Agent executed and
delivered that certain Credit Agreement dated as of April 23, 2003, as amended
by instrument dated as of April 7, 2004. Said Credit Agreement, as amended,
supplemented and restated, is herein called the "Credit Agreement". Any
capitalized term used in this Amendment and not otherwise defined shall have the
meaning ascribed to it in the Credit Agreement.
B. The Borrowers, the Lenders and the Administrative Agent desire to
amend the Credit Agreement in certain respects.
NOW, THEREFORE, in consideration of the premises and the mutual agreements,
representations and warranties herein set forth, and further good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Borrowers, the Lenders and the Administrative Agent do hereby agree as follows:
SECTION 1. Amendments to Credit Agreement.
(a) The definition of "Base Rate Margin" set forth in Section 1.01 of
the Credit Agreement is hereby amended to read in its entirety as follows:
"Base Rate Margin" means, with respect to any ABR Loan, the applicable
margin set forth below under the caption "Base Rate Margin," based upon the
ratio of (i) the sum of (x) Consolidated Total Debt (exclusive of the
undrawn face amounts of the Collection Account Letters of Credit, the
undrawn face amounts of the Bank of America Letters of Credit and the
undrawn face amounts of the Letters of Credit issued under this Agreement)
plus (y) eight times Consolidated Rent Expense divided by (ii) Consolidated
EBITDA plus Consolidated Rent Expense, as determined quarterly on a rolling
four quarter basis.
Ratio Base Rate Margin
----- ----------------
x greater than or equal to 2.75 0.75%
2.25 less than or equal to x less than 2.75 0.50%
1.75 less than or equal to x less than 2.25 0.25%
x less than 1.75 0.00%
(b) The definition of "Commitment Fee Rate" set forth in Section 1.01
of the Credit Agreement is hereby amended to read in its entirety as follows:
"Commitment Fee Rate" means, with respect to the commitment fees
payable hereunder, the applicable fee rate as set forth below under the
caption "Commitment Fee," based upon the ratio of (i) the sum of (x)
Consolidated Total Debt (exclusive of the undrawn face amounts of the
Collection Account Letters of Credit, the undrawn face amounts of the Bank
of America Letters of Credit and the undrawn face amounts of the Letters of
Credit issued under this Agreement) plus (y) eight times Consolidated Rent
Expense divided by (ii) Consolidated EBITDA plus Consolidated Rent Expense,
as determined quarterly on a rolling four quarter basis
Ratio Commitment Fee Rate
----- -------------------
x greater than or equal to 2.75 0.375%
2.25 less than or equal to x less than 2.75 0.30%
1.75 less than or equal to x less than 2.25 0.25%
1.25 less than or equal to x less than 1.75 0.225%
x less than 1.25 0.20%
(c) A new definition of "Letter of Credit Agreement" is hereby added to
Section 1.01 of the Credit Agreement, such new definition to read in its
entirety as follows:
"Letter of Credit Agreement" means the Letter of Credit Agreement
dated November 12, 2004 executed by and among Borrowers, Lenders and
Administrative Agent, as it may from time to time be amended, modified,
restated or supplemented.
(d) The definition of "LIBO Rate Margin" set forth in Section 1.01 of
the Credit Agreement is hereby amended to read in its entirety as follows:
2
"LIBO Rate Margin" means, with respect to any Eurodollar Loan, the
applicable margin set forth below under the caption "LIBO Rate Margin,"
based upon the ratio of (i) the sum of (x) Consolidated Total Debt
(exclusive of the undrawn face amounts of the Collection Account Letters of
Credit, the undrawn face amounts of the Bank of America Letters of Credit
and the undrawn face amounts of the Letters of Credit issued under this
Agreement) plus (y) eight times Consolidated Rent Expense divided by (ii)
Consolidated EBITDA plus Consolidated Rent Expense, as determined quarterly
on a rolling four quarter basis
Ratio LIBO Rate Margin
----- ----------------
x greater than or equal to 2.75 2.00%
2.25 less than or equal to x less than 2.75 1.75%
1.75 less than or equal to x less than 2.25 1.50%
1.25 less than or equal to x less than 1.75 1.25%
x less than 1.25 1.00%
(e) The definition of "Obligations" set forth in Section 1.01 of the
Credit Agreement is hereby amended to read in its entirety as follows:
"Obligations" means, as at any date of determination thereof, the sum
of the following: (i) the aggregate principal amount of Loans outstanding
hereunder, plus (ii) the aggregate amount of the LC Exposure (as defined in
the Letter of Credit Agreement), plus (iii) all other liabilities,
obligations and indebtedness under any Loan Document of Borrower or any
other Loan Party.
(f) The definition of "Revolving Credit Exposure" set forth in Section
1.01 of the Credit Agreement is hereby amended to read in its entirety as
follows:
"Revolving Credit Exposure" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's
Revolving Loans and its LC Exposure (as defined in the Letter of Credit
Agreement) at such time.
(g) The definition of "Revolving Maturity Date" set forth in Section
1.01 of the Credit Agreement is hereby amended to read in its entirety as
follows:
"Revolving Maturity Date" shall mean October 31, 2007, or any earlier
date on which (i) the Revolving Loan Commitments shall have terminated in
accordance with this Agreement and (ii)(a) all unpaid amounts owing under
the Revolving Notes have been declared due and payable in accordance with
this Agreement or (b) all unpaid amounts owing under the Revolving Notes
shall have been prepaid in accordance with this Agreement.
3
(h) Section 6.19 of the Credit Agreement is hereby amended to read in
its entirety as follows:
SECTION 6.19. Total Leverage Ratio. The Borrowers will not permit the
ratio of (i) the sum of (x) Consolidated Total Debt (exclusive of the
undrawn face amounts of the Collection Account Letters of Credit, the
undrawn face amounts of the Bank of America Letters of Credit and the
undrawn face amounts of the Letters of Credit issued under this Agreement)
plus (y) eight times Consolidated Rent Expense divided by (ii) Consolidated
EBITDA plus Consolidated Rent Expense, as determined as of the last day of
each fiscal quarter for the twelve-month period ending on such day, to be
greater than 3.00 to 1.00.
(i) Clause (a) of Article VII of the Credit Agreement is hereby amended
to read in its entirety as follows:
(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;
(j) Schedule 2.02 (Revolving Loan Commitments) of the Credit Agreement
is hereby amended to be identical to Schedule 2.02 attached hereto. The
revisions to Schedule 2.02 reflect an increase in the Revolving Loan Commitments
by the amount of $5,000,000, resulting in total Revolving Loan Commitments of
$35,000,000.
SECTION 2. Conditions. No part of this Amendment shall become effective
until the Borrowers shall have delivered (or shall have caused to be delivered)
to the Administrative Agent each of the following:
(i) certificates dated as of the date hereof of the Secretary or any
Assistant Secretary of each of the Borrowers authorizing the
execution, delivery and performance of this Amendment and each other
applicable Loan Document and certifying to the current organizational
documents for the Borrowers, and such other related documents and
information as the Administrative Agent may reasonably request;
(ii) an opinion of counsel for the Borrowers covering such matters related
to this Amendments and the other Loan Documents as the Administrative
Agent may reasonably request;
(iii) payment of all fees, interest and other amounts that may be due and
payable under the terms of any of the Loan Documents or any other
written agreement entered into between the Borrowers and the
Administrative Agent, including without limitation an amendment fee of
0.10% of the sum of each Lender's allocated Revolving Loan Commitment
(after giving effect to this Amendment); and
4
(iv) an agreement governing the issuance of letters of credit under the
revolving credit facility provided in the Credit Agreement, with a
$5,000,000 limit and otherwise in form and substance satisfactory to
the Administrative Agent and the Lenders, duly executed by the
Borrower and joined in by the Guarantors.
SECTION 3. Ratification. Except as expressly amended by this Amendment, the
Credit Agreement and the other Loan Documents shall remain in full force and
effect. None of the rights, title and interests existing and to exist under the
Credit Agreement are hereby released, diminished or impaired, and the Borrowers
hereby reaffirm all covenants, representations and warranties in the Credit
Agreement.
SECTION 4. Expenses. The Borrowers shall pay to the Administrative Agent
all reasonable fees and expenses of Administrative Agent's legal counsel
incurred in connection with the execution of this Amendment.
SECTION 5. Certifications. The Borrowers hereby certify that (a) no event
or condition has occurred or arisen since the Effective Date which has had a
Material Adverse Effect and (b) no Default or Event of Default has occurred and
is continuing or will occur as a result of this Amendment.
SECTION 6. Miscellaneous. This Amendment (a) shall be binding upon and
inure to the benefit of the Borrowers, the Lenders and the Administrative Agent
and their respective successors, assigns, receivers and trustees; (b) may be
modified or amended only by a writing signed by the required parties; (c) shall
be governed by and construed in accordance with the laws of the State of Texas
and the United States of America; (d) may be executed in several counterparts by
the parties hereto on separate counterparts, and each counterpart, when so
executed and delivered either in original form or by telecopy, shall constitute
an original agreement, and all such separate counterparts shall constitute but
one and the same agreement and (e) together with the other Loan Documents,
embodies the entire agreement and understanding between the parties with respect
to the subject matter hereof and supersedes all prior agreements, consents and
understandings relating to such subject matter. The headings herein shall be
accorded no significance in interpreting this Amendment.
5
NOTICE PURSUANT TO TEX. BUS. & COMM. CODE ss.26.02
THE CREDIT AGREEMENT, AS AMENDED BY THIS AMENDMENT, AND ALL OTHER LOAN
DOCUMENTS EXECUTED BY ANY OF THE PARTIES PRIOR HERETO OR SUBSTANTIALLY
CONCURRENTLY HEREWITH CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the Borrowers, the Lenders and the Administrative Agent
have caused this Amendment to be signed by their respective duly authorized
officers, effective as of the date first above written.
Schedule 2.02 - Revolving Commitments
CONN APPLIANCES, INC.,
a Texas corporation
By: /s/ Xxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: CEO and Chairman of the Board
CAI CREDIT INSURANCE AGENCY, INC.,
a Louisiana corporation
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
6
JPMORGAN CHASE BANK,
as Administrative Agent and as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
7
BANK OF AMERICA, N.A.,
as Syndication Agent and as a Lender
By: /s/ Xxxx X. Xxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
8
SUNTRUST BANK,
as Documentation Agent and as a Lender
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Director
9
HIBERNIA NATIONAL BANK
By: /s/ Xxxx X. Xxxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
10
GUARANTY BANK
By: /s/ D. Xxxxx Xxxxxxxx
------------------------------------------
Name: D. Xxxxx Xxxxxxxx
Title: Senior Vice President
11
The undersigned Guarantors hereby join in this Amendment to evidence their
consent to execution by Borrower of this Amendment, to confirm that each Loan
Document now or previously executed by the undersigned applies and shall
continue to apply to the Credit Agreement, as amended hereby, to acknowledge
that without such consent and confirmation, Lender would not execute this
Amendment and to join in the notice pursuant to Tex. Bus. & Comm. Code ss.26.02
set forth above.
"GUARANTORS"
CAI HOLDING CO., a Delaware corporation,
CONN APPLIANCES, L.L.C., a Delaware limited
liability company, CAI CREDIT, L.L.C., a
Delaware limited liability company,
By: /s/ Xxxxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: President and Secretary
CAI L.P., a Texas limited partnership
By: Conn Appliances, Inc., its General Partner
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary - Treasurer
CAI CREDIT INSURANCE AGENCY L.P., a
Louisiana limited partnership
By: CAI Credit Insurance Agency, Inc., its
General Partner
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
12
CONN'S, INC, a Delaware corporation
By: /s/ Xxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: CEO and Chairman of the Board
13
SCHEDULE 2.02
-------------
REVOLVING COMMITMENTS
---------------------
JPMorgan Chase Bank $ 7,000,000
Bank of America, N.A. $ 7,000,000
Hibernia National Bank $ 7,000,000
SunTrust Bank $ 7,000,000
Guaranty Bank $ 7,000,000
TOTAL $35,000,000
