SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT
EXHIBIT
4.2
SECOND
AMENDMENT TO REVOLVING CREDIT AGREEMENT
THIS
SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT
("Amendment") is dated effective as of September 30, 2005, by and among
AMERICA’S
CAR MART, INC.,
an
Arkansas corporation and TEXAS
CAR-MART, INC.,
a Texas
corporation (separately and collectively, “Borrower”) and BANK
OF OKLAHOMA, N.A.
(“Bank”).
RECITALS
A.
Reference
is made to the Revolving Credit Agreement dated as of June 23, 2005, and
amended
by the First Amendment to Revolving Credit Agreement, dated effective as
of June
23, 2005, and executed August 19, 2005 (as amended, the "Credit Agreement"),
by
and among Borrowers and Bank, pursuant to which the Bank established a
$5,000,000 Revolving Line of Credit in favor of Borrower for the purpose
of
refinancing existing indebtedness and for working capital needs and general
business purposes.
B.
Borrower
has requested that Bank increase the $5,000,000 Revolving Line of Credit
to
$10,000,000, and extend the maturity date thereof; and Bank has agreed to
accommodate Borrower’s request, subject to the terms and conditions hereof.
Terms used herein shall have the meanings given in the Credit Agreement unless
otherwise defined herein.
AGREEMENT
For
valuable consideration received, the parties agree to the
following.
1.
Amendments
to Credit Agreement.
The
Credit Agreement is amended as follows.
1.1. In
Section 1.01 (Defined Terms), the definition of “ACM-Texas Sub-Debt” is hereby
deleted and replaced with the following:
“’ACM-Texas
Sub-Debt’ means the revolving line of credit provided to the Borrower by
ACM-Texas, in an amount not to exceed Ten Million and No/100 Dollars
($10,000,000.00).”
1.2. In
Section 1.01 (Defined Terms), the definition of “Borrowing Base” is hereby
deleted and replaced with the following:
“’Borrowing
Base’ means, as of the date of determination, (i) $2,000,000, plus
(ii)
eighty percent (80%) of Borrower’s Eligible Inventory, plus
(iii)
eighty percent (80%) of the purchase price of the real property and equipment
set forth on Exhibit
“A-1”
hereto.”
The
list
of real property and equipment to be attached to the Credit Agreement as
Exhibit
“A-1”
is
attached to this Amendment as Schedule
1.1.
1.3. In
Section 1.01 (Defined Terms), the definition of “Commitment” is amended to
evidence that the Commitment is hereby increased to $10,000,000.
1
1.4. In
Section 1.01 (Defined Terms), the definition of “Funded Debt” is hereby deleted
and replaced with the following:
“’Funded
Debt’ means all outstanding Debt for Borrowed Money (not including the Colonial
Sub-Debt up to a maximum amount of $3,000,000).”
1.5. In
Section 1.01 (Defined Terms), the definition of “Interest Period” is hereby
deleted and replaced with the following:
“Interest
Period” means, with respect to any LIBOR Loan, the period commencing on the date
such Loan is made and ending, as the Borrower may select, pursuant to
Section
2.04,
on the
numerically corresponding day in the first, second, third, sixth, ninth,
or
twelfth calendar month thereafter, except that each such Interest Period
that
commences on the last day of a calendar month (or on any day for which there
is
no numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last day of the appropriate subsequent calendar month;
provided, however, that no Interest Period may extend beyond the Termination
Date.”
1.6. In
Section 1.01 (Defined Terms), the definition of “Termination Date” is amended to
evidence that the Termination Date is hereby extended to April 30,
2009.
1.7. Section
2.03 (Interest) is amended to evidence that the table contained therein is
hereby deleted and replaced with the following:
Borrower’s
Ratio of
Funded
Debt to EBITDA
|
Adjusted
LIBOR
Rate
|
Adjusted
Prime
Rate
|
<
1.75
>
1.75 and < 2.0
> 2.0
and < 2.25
> 2.25
|
LIBOR
Rate plus 2.75%
LIBOR
Rate plus 3.0%
LIBOR
Rate plus 3.25%
LIBOR
Rate plus 3.5%
|
Prime
Rate minus .25%
Prime
Rate plus 0.0%
Prime
Rate plus .25%
Prime
Rate plus .5%
|
1.8. Section
2.03 (Interest) is hereby amended to evidence the addition the following
paragraph:
“The
Adjusted LIBOR Rate and Adjusted Prime Rate shall be recalculated on not
less
than a monthly basis, upon Bank’s receipt of Borrower’s monthly financial
statements.”
1.9. Section
2.05 (Unused Portion Fee) is hereby deleted and replaced with the
following:
“Section
2.05. Unused Portion Fee.
The
Borrower agrees to pay to the Bank a commitment fee on the average daily
unused
portion of the Bank’s Commitment from the date hereof until the Termination Date
at the rate of one-tenth of one percent (1/10 of 1%) per annum, calculated
monthly and payable on the last day of each June and December during the
term of
the Bank’s Commitment, commencing December 31, 2005, and ending on the
Termination Date; provided, however, that no Unused Portion Fee will be paid
for
any given month during which the average monthly revolving balance exceeds
(i)
from the date hereof to March 31, 2007, $5,000,000, and (ii) from March 31,
2007
to the Termination Date, $6,000,000.”
2
1.10. Section
2.14 (Termination Fee) is hereby amended to evidence that ”six (6) months” and
“$10,000” are hereby deleted and replaced with “fifteen (15) months” and
“$25,000”, respectively.
1.11. Section
2.15 (Audit Fees) is amended to evidence that the following sentence is hereby
added as the first sentence of said Section 2.15:
“Section
2.15. Audit Fees.
To the
extent that Bank’s auditors reasonably determine that any amounts reported by
the Borrower are incorrect (including amounts on a Borrowing Base Certificate,
pursuant to the Financial Covenants in Article 7, or elsewhere pursuant to
the
loan documents), then the adjusted amount(s) reasonably determined by the
Bank’s
auditors shall be deemed to be the correct amount(s) until such time, if
ever,
that the Borrower shall provide convincing evidence to the Bank to the contrary.
The Borrower agrees . . .”
1.12. Section
5.08 (Reporting Requirements) is amended to evidence that a new subsection
(14)
is hereby added, as follows:
“(14) In
the
event Borrower ceases to sell Vehicle Contracts to Colonial, Borrower shall
provide to Bank, as soon as available and in any event by the fifteenth
(15th)
day of
each calendar month for the immediately preceding calendar month: (a) a
collateral and loan status report; (b) an aging of the Borrower’s Contracts on a
summary basis; (c) a summary list of Contracts where the Contract Debtor
is
subject to an insolvency proceeding; (d) a report of Net Charge-Offs; (e)
a lot
status report; and (f) other reports as to the Collateral of the Borrower
as the
Bank may reasonably request from time to time.”
1.13. The
Borrowing Base Certificate attached to the Credit Agreement as Exhibit
“A”
is
hereby deleted and replaced with the Borrowing Base Certificate attached
as
Schedule
“1.10”
hereto.
1.14. A
new
Section 5.15 is hereby added, as follows:
“5.15 Additional
Security.
Upon
the occurrence of an Event of Default, or at the request of Bank, Borrower
shall
grant to Bank a first priority security interest in the real property and
equipment set forth on Exhibit
“A-1”
hereto,
and shall execute all documents and agreements and take all steps required
or
requested by Bank in order for Bank to perfect its liens and security interests
in such real property and equipment.”
1.15. A
new
Section 6.18 is hereby added, as follows:
“6.18 Negative
Pledge.
Borrower shall not give power to, create, incur, permit, or suffer to exist,
or
allow any Subsidiary to give power to, create, incur, permit, or suffer to
exist, any Lien upon the real property and equipment set forth on Exhibit
“A-1”,
or any
improvements thereon, except for Liens permitted under Section 6.01
herein.”
2. Conditions
Precedent.
The
obligations of the Bank to perform under the Credit Agreement, as amended
hereby, are subject to the satisfaction of the following.
2.1. Borrower
shall execute and deliver the $10,000,000 Promissory Note, in form and content
as set forth on Schedule
“2.1”
hereto.
3
2.2. Borrower
shall execute and deliver any other instruments, documents and/or agreements
reasonably required by Bank in connection herewith.
2.3. No
Default or Event of Default exists or will result from the execution and
delivery of this Amendment.
3. Representations
and Warranties.
Each of
the Borrower and the Guarantors, respectively, hereby ratify and confirm
all
representations and warranties set forth in Article IV of the Credit Agreement,
Section 8 of the Security Agreement, and Sections 24 through 29 of the Guaranty
Agreement other than any representation or warranty that relates to a specific
prior date and except to the extent that the Bank has been notified in writing
by the Borrower that any representation or warranty is not correct and the
Bank
has explicitly waived in writing compliance with such representation or
warranty.
4. Ratification.
Borrower hereby ratifies and confirms the Credit Agreement, and all instruments,
documents, and agreements executed by and in connection therewith.
5. Ratification
and Amendment of Guaranties.
ACM-Texas and Colonial each hereby (i) ratifies and confirms its respective
Guaranty, (ii) acknowledges and agrees that its said Guaranty is hereby amended
to evidence that the amount of the Loan and Note, as defined therein, shall
now
be $10,000,000, and (iii) acknowledges and agrees that its respective Guaranty
fully guarantees the $10,000,000 Note.
6. Ratification
and Amendment of Subordination Agreements.
ACM-Texas and Colonial each hereby (i) ratifies and confirms its respective
Subordination Agreement, (ii) acknowledges and agrees that its respective
Subordination Agreement is hereby amended to evidence that the amount of
the
Loan and Note, as defined therein, shall now be $10,000,000, (iii) acknowledges
and agrees that the Superior Obligations and Superior Liens, as defined in
its
respective Subordination Agreement, shall now include the $10,000,000 Note,
and
(iv) acknowledges and agrees that its respective Subordinate Obligations
and
Subordinate Liens are subordinate to the $10,000,000 Note.
7. Paying
Agent.
Bank
and Borrower hereby acknowledge and agree that Bank of Arkansas, N.A., shall
be
designated as paying agent for Bank. All payments which are to be made to
Bank
under the terms of the Credit Agreement and other Loan Documents shall be
made
to Bank of Arkansas, N.A. as paying agent.
8. Governing
Law.
This
Agreement and the Note shall be governed by, and construed in accordance
with,
the laws of the State of Arkansas.
9. Multiple
Counterparts.
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 agreement.
10. Costs,
Expenses and Fees.
Borrower agrees to pay all costs; expenses and fees incurred by Banks in
connection herewith, including without limitation the reasonable attorney
fees
of Riggs, Abney, Neal, Turpen, Orbison and Xxxxx.
[Signature
page to follow.]
4
“BORROWER”
|
|
AMERICA’S
CAR MART, INC.,
an Arkansas corporation
|
|
By
/s/ Xxxx X.
Xxxxxxx
|
|
Xxxx X. Xxxxxxx, Vice President
|
|
TEXAS
CAR-MART, INC.,
a
Texas corporation
|
|
By
/s/ Xxxx X.
Xxxxxxx
|
|
Xxxx X. Xxxxxxx, Vice President
|
|
"GUARANTOR"
and “SUBORDINATING PARTY”
|
|
AMERICA’S
CAR-MART, INC.,
a
Texas corporation,
formerly
known as Crown Group, Inc.
|
|
By
/s/ Xxxx X.
Xxxxxxx
|
|
Xxxx X. Xxxxxxx, Vice President
|
|
COLONIAL
AUTO FINANCE, INC.,
|
|
an
Arkansas corporation
|
|
By
/s/ Xxxxxx X. Xxxxxxx,
III
|
|
Xxxxxx X. Xxxxxxx, III, President
|
|
“BANK”
|
|
BANK
OF OKLAHOMA, N.A.
|
|
By
/s/ Xxxxxxx X. Xxxx
|
|
|
Xxxxxxx X. Xxxx, Vice President
|
5