Exhibit 99.1
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is made and
entered into effective as of April 7, 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
heretofore amended. 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:
Amendments to Credit Agreement.
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 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 => 2.75 1.00%
2.25 <= x < 2.75 0.75%
1.75 <= x < 2.25 0.50%
1.25 <= x < 1.75 0.25%
x < 1.25 0.00%
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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 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 => 2.75 0.50%
2.25 <= x < 2.75 0.375%
x < 2.25 0.25%
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:
"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 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 => 2.75 2.25%
2.25 <= x < 2.75 2.00%
1.75 <= x < 2.25 1.75%
1.25 <= x < 1.75 1.50%
x < 1.25 1.25%
Section 5.16 of the Credit Agreement is hereby amended to read in its entirety
as follows:
SECTION 5.16. Fee Properties and Leases. Concurrent with the
acquisition of any fee property of which the net book value exceeds
$250,000 or the execution of any lease of real property for a term of
five years or more (excluding any optional renewal terms), each
Borrower will, and will cause the other Loan Parties and each of their
Subsidiaries to, execute, acknowledge and deliver to the Administrative
Agent a deed of trust or mortgage, as the case may be, in form and
substance satisfactory to the Administrative Agent, covering (i) such
fee property or (ii) all of such Person's rights and interests as
lessee, in, to and under such real estate lease, together with evidence
satisfactory to the Administrative Agent and its counsel, in form and
substance satisfactory to the Administrative Agent, that such deed of
trust or mortgage creates a valid, first and prior Lien on the fee
estate or the leasehold estate, as the case may be, in favor of the
Administrative Agent subject only to Liens permitted under Section 6.02
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hereof. To the extent that any applicable landlord or lessor fails or
refuses to grant its consent to such a leasehold mortgage or lien
notwithstanding good faith efforts by Borrower to obtain such consent,
Borrower shall not be required to execute and deliver such deed of
trust or mortgage; provided, however, that at least fifty percent (50%)
of the leasehold estates owned or held by Borrowers from time to time
must be subject to a deed of trust or mortgage in favor of the
Administrative Agent.
Section 6.04 of the Credit Agreement is hereby amended to read in its entirety
as follows:
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. Each Borrower will not, and will not permit any Loan
Party or any of their Subsidiaries to, purchase, hold or acquire
(including pursuant to any merger with any Person any capital stock,
evidences of indebtedness or other securities (including any option,
warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, guarantee any obligations of,
or make or permit to exist any investment or any other interest in, any
other Person, or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person constituting a
business unit, or become a general partner of any other Person, except:
(a) Permitted Investments;
(b) investments by Parent in the capital stock of CAI;
(c) loans or advances permitted under Section 6.01 hereof;
(d) Guarantees by the Borrowers or their Subsidiaries, in an
aggregate amount not to exceed $15,000,000 at any one time outstanding,
of Indebtedness incurred in connection with the acquisition and
development of sites (and construction of improvements thereon) which
are subject to leases in favor of a Borrower or a Subsidiary of a
Borrower (such Guarantees to be permitted in addition to and cumulative
of the other Indebtedness permitted under Section 6.01 hereof);
(e) investments in the form of membership or partnership
interests, as applicable, in Conn Funding LLC, Conn Funding I LP, Conn
Funding II LP and Conn Funding II GP LLC; and
(f) investments which are consistent with the corporate
investment policy of CAI from time to time in effect, as approved by
the Administrative Agent (such approval not to be unreasonably
withheld).
Section 6.06 of the Credit Agreement is hereby amended to read in its entirety
as follows:
SECTION 6.06. Restricted Payments. Each Borrower will not, and
will not permit any of their Subsidiaries to, declare or make, or agree
to pay or make, directly or indirectly, any Restricted Payment other
than as specifically included in the definition of the IPO Transaction;
provided, however, that so long as no Default or Event of Default has
occurred, is continuing or would be created thereby, CAI may make
Restricted Payments in an aggregate amount not to exceed $10,000,000
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from and after January 1, 2004. Notwithstanding anything herein to the
contrary, any Subsidiary which is wholly-owned (directly or indirectly)
by CAI may declare and pay dividends to the owners of its equity
interests.
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 and the undrawn face amounts of the Bank of America
Letters of Credit) 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.
Section 6.22 of the Credit Agreement is hereby amended to read in its entirety
as follows:
SECTION 6.22. [Intentionally Left Blank]
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 a decrease in the Revolving Loan Commitments by the amount
of $10,000,000, resulting in total Revolving Loan Commitments of $30,000,000.
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.
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.
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.
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, 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
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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.
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.
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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/ C. William Frank
--------------------
Name: C. William Frank
Title: Executive Vice President
CAI CREDIT INSURANCE AGENCY, INC.,
a Louisiana corporation
By: /s/ David R. Atnip
------------------
Name: David R. Atnip
Title: President
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JPMORGAN CHASE BANK,
as Administrative Agent and as a Lender
By: /s/Robert L. Mendoza
--------------------
Name: Robert L. Mendoza
Title: Vice President
BANK OF AMERICA, N.A.,
as Syndication Agent and as a Lender
By: /s/Gary L. Mingle
-----------------
Name: Gary L. Mingle
Title: Senior Vice President
SUNTRUST BANK,
as Documentation Agent and as a Lender
By: /s/Heidi M. Khambatta
--------------------
Name: Heidi M. Khambatta
Title: Vice President
HIBERNIA NATIONAL BANK
By: /s/ Bill C. Darling
-------------------
Name: Bill C. Darling
Title: Vice President
GUARANTY BANK
By: /s/ Eric Luttrell
-----------------
Name: Eric Luttrell
Title: Vice President
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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. Codess.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/ Victoria L. Garrett
-----------------------
Name: Victoria L. Garrett
Title: President
CAI L.P., a Texas limited partnership
By: Conn Appliances, Inc., its General Partner
By: /s/ David R. Atnip
------------------
Name: David R. Atnip
Title: Senior Vice President & Secretary
-Treasurer
CAI CREDIT INSURANCE AGENCY L.P., a
Louisiana limited partnership
By: CAI Credit Insurance Agency, Inc., its
General Partner
By: /s/ David R. Atnip
----------------------
Name: David R. Atnip
Title: President
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CONN'S, INC, a Delaware corporation
By: /s/ C. William Frank
--------------------
Name: C. William Frank
Title: Executive Vice President and Chief
Financial Officer
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SCHEDULE 2.02
-------------
REVOLVING COMMITMENTS
---------------------
JPMorgan Chase Bank $ 6,000,000
Bank of America, N.A. $ 6,000,000
Hibernia National Bank $ 6,000,000
SunTrust Bank $ 6,000,000
Guaranty Bank $ 6,000,000
TOTAL $30,000,000
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