Exhibit 99.2
SUPPLEMENT NO. 1 TO AMENDED AND RESTATED SERIES 2002-A SUPPLEMENT
This SUPPLEMENT NO. 1 TO AMENDED AND RESTATED SERIES 2002-A SUPPLEMENT,
dated as of August 14, 2008 (this "Amendment") is made between CONN FUNDING II,
L.P. (the "Issuer") and ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION (successor by
merger to ▇▇▇▇▇ Fargo Bank Minnesota, National Association), as Trustee (the
"Trustee"). 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, the "Base Indenture"), between the Issuer
and the Trustee or, if not defined therein, in the that certain Amended and
Restated Series 2002-A Supplement, dated as of September 10, 2007 (as amended
from time to time, the "Series Supplement"), between the Issuer and the Trustee.
Background
A. The parties hereto have entered into the Base Indenture and the Series
Supplement to finance the purchase of Receivables by the Issuer from Conn
Appliances, Inc.
B. The Trustee will also enter into an Intercreditor Agreement, dated as
of the date hereof by and among Bank of America, N.A., Conn Appliances, Inc.,
Conn Credit Corporation, Inc. and Conn Credit I, L.P in connection with the
execution of documents in connection with the ABL Facility (as defined below).
C. The parties hereto wish to amend the Series Supplement.
D. The parties hereto are willing to agree to such an amendment, all as
set out in this Amendment.
Agreement
0. Amendments of the Series Supplement.
( ) Section 1 of the Series Supplement is hereby amended by adding
the following new definitions as alphabetically appropriate:
"ABL Facility" has the meaning set forth in the Note Purchase
Agreement.
"Financing Facility" has the meaning set forth in the definition of
"Serviced Net Portfolio Yield".
"Pool Contract" means, any retail installment sale contract
originated by the Parent or any of its Affiliates in connection with
a sale of (i) home appliances, electronic goods, computers,
telephones and other goods and merchandise of the type sold by the
Parent or any of its Affiliates from time to time in the ordinary
course of business, which in each case constitute "consumer goods"
under and as defined in Article 9 of the UCC of all applicable
jurisdictions, (ii) service maintenance contracts and services in
respect of any goods or merchandise referred to in clause (i) above,
or (iii) credit insurance (including life, disability, property and
involuntary unemployment) in respect of any goods or merchandise
referred to in clause (i) above or any obligor's payment obligations
in respect of the receivable created in connection therewith
(collectively, "Pool Merchandise") and all amounts due thereunder
from time to time or any retail revolving charge account agreement
originated by the Parent or any of its Affiliates with an obligor
pursuant to which such obligor is obligated to pay for Pool
Merchandise purchased under a credit plan and permits such obligor
to purchase such Pool Merchandise on credit.
"Serviced Collections" means, with respect to any Serviced
Receivable, all cash collections and other cash proceeds of such
Serviced Receivable.
"Serviced Contract" means, any retail installment sale contract
serviced by the Parent or any of its Affiliates in connection
with a sale of (i) home appliances, electronic goods, computers,
telephones and other goods and merchandise of the type sold by
the Parent or any of its Affiliates from time to time in the
ordinary course of business, which in each case constitute
"consumer goods" under and as defined in Article 9 of the UCC of
all applicable jurisdictions, (ii) service maintenance contracts
and services in respect of any goods or merchandise referred to
in clause (i) above, or (iii) credit insurance (including life,
disability, property and involuntary unemployment) in respect of
any goods or merchandise referred to in clause (i) above or any
obligor's payment obligations in respect of the receivable
(collectively, "Serviced Merchandise") and all amounts due
thereunder from time to time or any retail revolving charge
account agreement with an obligor pursuant to which such obligor
is obligated to pay for Serviced Merchandise purchased under a
credit plan and permits such obligor to purchase such Serviced
Merchandise on credit.
"Serviced Defaulted Receivable" means a Serviced Receivable which,
consistent with the credit and collection policy of the Parent or
its Subsidiaries, would be written off as uncollectible.
"Serviced Finance Charges" means any finance, interest, late or
similar charges or fee owing under a Serviced Receivable (other than
with respect to Serviced Defaulted Receivables).
"Serviced Gross Loss Rate" means, with respect to any Monthly
Period, the ratio (expressed as a percentage) computed as of the
last day of such Monthly Period, by dividing (i) the outstanding
principal balance of Serviced Defaulted Receivables which were
deemed to be Serviced Defaulted Receivables during such Monthly
Period by (ii) (A) the aggregate outstanding principal balance of
all Serviced Receivables as of the last day of the previous Monthly
Period plus (B) the aggregate outstanding principal balance of all
Serviced Receivables as of such last day of such Monthly Period
divided by (C) two and multiplying the result by (iii) twelve.
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"Serviced Net Portfolio Yield" for any Monthly Period (as determined
as of the last day of each Monthly Period) shall mean the annualized
percentage equivalent of a fraction, (a) the numerator of which is
equal to the Serviced Net Yield Amount for such Monthly Period and
(b) the denominator of which is equal to the aggregate outstanding
principal balance of all Serviced Receivables on such day. For
purposes of this definition, "Serviced Net Yield Amount" means for
any Monthly Period an amount equal to the excess of the sum of
Serviced Collections of Serviced Finance Charges plus Serviced
Recoveries allocable to Serviced Finance Charges over the sum of (a)
interest and fees accrued for the current Monthly Period and overdue
interest and fees with respect to (i) the Notes and "Enhancement" of
all Series (together with, if applicable, interest on such overdue
interest and fees at the rate specified in the accompanying series
supplements) and (ii) any other indebtedness financed or secured by
the Serviced Receivables, including the ABL Facility (each a
"Financing Facility"), (b) accrued and unpaid Servicing Fees and
Trustee and Back-Up Servicer Fees and Expenses for such Monthly
Period and accrued and unpaid fees and expenses owed to third-party
and related service providers related to any Financing Facility,
including servicing fees and expenses, (c) the aggregate outstanding
principal balance of all Serviced Receivables that became Serviced
Defaulted Receivables during such Monthly Period (each respective
outstanding principal balance being measured as of the date the
relevant Serviced Receivable became a Serviced Defaulted
Receivable), and (d) any other costs, expenses, or liability of any
nature whatsoever incurred during such Monthly Period (i) of the
Issuer (except for the obligations of the Issuer to pay any
principal on the Notes outstanding at such time or any Business
Taxes and except for fee and indemnity expenses for which cash other
than such Monthly Period's Collections are available to the Issuer)
and (ii) of any other Subsidiary of the Parent with respect to any
other Financing Facility (except for the obligations of the
Subsidiary of the Parent to pay any principal on the notes
outstanding under such Financing Facility at such time or any
Business Taxes and except for fee and indemnity expenses for which
cash other than such Monthly Period's Serviced Collections are
available to the Subsidiary of the Parent).
"Serviced Payment Rate" shall mean, with respect to any Monthly
Period, the ratio (expressed as a percentage) computed as of the
last day of such Monthly Period by dividing (i) an amount equal to
all Serviced Collections received with respect to the Serviced
Principal Receivables and Serviced Finance Charges during such
Monthly Period and each of the previous two Monthly Periods by (ii)
the sum of the aggregate outstanding principal balance of all
Serviced Receivables plus unearned interest related thereto as of
the first day of such Monthly Period and each of the previous two
Monthly Periods.
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"Serviced Principal Receivables" means the principal portion of the
Serviced Receivables (other than Serviced Defaulted Receivables),
excluding any Serviced Recoveries and any accrued and unpaid
Serviced Finance Charges.
"Serviced Receivable" means the indebtedness of any obligor under a
Serviced Contract, whether constituting an account, chattel paper,
an instrument, a general intangible, payment intangible, promissory
note or otherwise, and shall include (i) the right to payment of
such indebtedness and any interest or finance charges and other
obligations of such obligor with respect thereto (including, without
limitation, the principal amount of such indebtedness, periodic
finance charges, late fees and returned check fees), and (ii) all
proceeds of, and payments or Serviced Collections on, under or in
respect of any of the foregoing.
"Serviced Recoveries" means, with respect to any period, all
Serviced Collections received during such period in respect of
Serviced Receivables that became Serviced Defaulted Receivables
prior to the first day of such period.
(a) The definition of "Maximum Principal Amount" set forth in
Section 1 of the Series Supplement is hereby amended and restated in its
entirety as follows:
"Maximum Principal Amount" means, for any date of determination, the
sum of (i) the Tranche A Commitment then in effect, plus (ii) the
Tranche B Commitment then in effect.
(b) The definition of "Monthly Interest" set forth in Section 1 of
the Series Supplement is hereby amended by adding the following sentence
at the conclusion of such definition:
"For clarification purposes, the term "Term Interest" (as defined in
the Note Purchase Agreement) shall be a component of and calculated
as Monthly Interest."
(c) The definition of "Required Reserve Amount" set forth in Section
1 of the Series Supplement is hereby amended and restated in its entirety
as follows:
"Required Reserve Amount" shall mean, at any time, the greater of
(a) $7,500,000 and (b) an amount equal to (i) the Note Principal at
such time, multiplied by (ii)(A) the Required Reserve Percentage at
such time, divided by (B) 100% minus the Required Reserve Percentage
at such time, plus the Additional Cash Reserve Amount; provided,
however, that the Required Reserve Amount shall be fixed during the
Rapid Amortization Period as of the Rapid Pay Out Commencement Date;
provided, further, that the Required Reserve Amount may only
increase from time to time to the extent of the Investor Percentage
(determined with regard to only (and only to the extent of) those
Series with respect to which the "Required Reserve Amount" is
increasing at such time) of the Available Issuer Interest (after
giving effect to any reductions pursuant to Section 5.16 but prior
to any reductions with respect to Principal Reallocation Amounts on
such day, or pursuant to any comparable provisions of any other
Series Supplement for any Series on such day) at such time.
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(d) The definition of "Required Reserve Percentage" set forth in
Section 1 of the Series Supplement is hereby amended by deleting "15.0%"
therein and substituting "until (and including) August 30, 2008, 15.0%
from August 31, 2008 to and (and including) September 29, 2008, 20.0% and
thereafter, 24.0%" therefor.
(e) Section 5.15(g) of the Series Supplement is hereby amended and
restated in its entirety as follows:
(g) On any Payment Date in connection with a Decrease pursuant
to Section 3.2, the amount of such Decrease shall be paid to the
Noteholders, pro rata (or, to the extent such Decrease is solely as
the result of the occurrence of the Tranche A Purchase Expiration
Date or Tranche B Purchase Expiration Date with respect to some, but
not all, of the Noteholders, such amount shall be allocated pro rata
solely among the Noteholders for which the Tranche A Purchase
Expiration Date or Tranche B Purchase Expiration Date has occurred),
from (i) Available Investor Principal Collections, (ii) the proceeds
of a partial refinancing of any outstanding Series of Notes or (iii)
amounts otherwise available to the Issuer, all to the extent that
such amounts have been deposited in the Payment Account.
(f) Section 9(f) of the Series Supplement is hereby amended and
restated in its entirety as follows:
(f) on the close of the Issuer's business on the last day of
any Monthly Period, the Serviced Net Portfolio ▇▇▇▇▇ averaged over
any three consecutive Monthly Periods is less than 2.0% or on the
close of the Issuer's business on the last day of any Monthly Period
the Net Portfolio ▇▇▇▇▇ averaged over any three consecutive Monthly
Periods is less than 2.0%;
(g) Section 9(h) of the Series Supplement is hereby amended and
restated in its entirety as follows:
(h) on any date of determination the Serviced Gross Loss Rate
shall be equal to or exceed 10.0% on a rolling three-month average
basis or on any date of determination the Gross Loss Rate shall be
equal to or exceed 10.0% on a rolling three-month average basis;
(h) Section 9(j) of the Series Supplement is hereby amended and
restated in its entirety as follows:
(j) any default (after giving effect to any grace period but
not giving effect to any waiver or any requirement that a default be
declared by any Person) under (A) the Retailer Credit Agreement, (B)
any inventory financing agreement between any lender and the
Servicer, the Parent or the Seller, or (C) any indenture, credit or
loan agreement or other agreement or instrument of any kind
(including a loan facility secured by indebtedness of any obligor
under a Pool Contract) pursuant to which Indebtedness of the
Servicer, the Parent, the Seller or any of their Subsidiaries in an
aggregate principal amount in excess of $1,000,000 is outstanding or
by which the same is evidenced, shall have occurred;
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(i) Section 9(r) of the Series Supplement is hereby amended and
restated in its entirety as follows:
(r) the Serviced Payment Rate shall be less than or equal to
4.75% for any Monthly Period or the Payment Rate shall be less than
or equal to 3.0% for any Monthly Period;
2. Interpretation of Defined Terms. For purposes of the defined terms
"Serviced Collections," "Serviced Contract," "Serviced Defaulted Receivable,"
"Serviced Finance Charges," "Serviced Gross Loss Rate," "Serviced Net Portfolio
Yield," "Serviced Net Yield Amount," "Serviced Principal Receivables," and
"Serviced Receivable," such definitions shall be interpreted in a manner
consistent with their counterpart terms defined either in the Base Indenture or
in the Series Supplement, as applicable, which counterpart terms address matters
relating solely to the transactions contemplated by the Transaction Documents.
3. Binding Effect; Ratification. (b) This Amendment shall become
effective, as of the date first set forth above, when (i) counterparts hereof
shall have been executed and delivered by the parties hereto and (ii) the
Administrator shall have received a fully executed copy of the Second Amended
and Restated Note Purchase Agreement, and thereafter shall be binding on the
parties hereto and their respective successors and assigns and all fees owed to
the Funding Agents, the Conduit Purchasers and the Committed Purchasers shall
have been paid in full.
(b) On and after the execution and delivery hereof, this Amendment
shall be a part of the Series Supplement and each reference in the Series
Supplement to "this Series Supplement" or "hereof", "hereunder" or words
of like import, and each reference in any other Transaction Document to
the Series Supplement shall mean and be a reference to such Series
Supplement as amended hereby.
(c) Except as expressly amended hereby, the Series Supplement shall
remain in full force and effect and is hereby ratified and confirmed by
the parties hereto.
4. Representations. The Issuer represents and warrants that:
(a) no event or circumstance that, after the giving of notice or
lapse of time or both, would give rise to an Event of Default, Pay Out
Event or Servicer Default or any Event of Default, Pay Out Event or
Servicer Default has occurred, and
(b) after giving effect to this Amendment, its representations and
warranties set forth in the Transaction Documents 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), and such representations and
warranties shall continue to be true and correct (to such extent) after
giving effect to the transactions contemplated hereby.
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5. Miscellaneous. (c) 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) Headings used herein are for convenience of reference only and
shall not affect the meaning of this Amendment.
(c) 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]
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13160218.2 02936782 Exhibit A (Page 1) Amendment No. 1 to Series
2002-VFN Indenture
Supplement
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.
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, not
in its individual capacity, but solely as
Trustee
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
CONN FUNDING II, L.P., as Issuer
By: Conn Funding II GP, L.L.C., its
general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer
S-1 Amendment No. 1 to
A&R Series 2002-A Supplement
CONSENTED AND AGREED TO BY:
THREE PILLARS FUNDING LLC, as a Conduit
Purchaser
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
SUNTRUST ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, INC.,
as Administrator
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
S-2 Amendment No. 1 to
A&R Series 2002-A Supplement
JPMORGAN CHASE BANK, N.A., as Funding
Agent and as Committed Purchaser
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
PARK AVENUE RECEIVABLES COMPANY LLC, as a
Conduit Purchaser
By: JPMorgan Chase Bank, N.A.,
its attorney-in-fact
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇_____________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
S-3 Amendment No. 1 to
A&R Series 2002-A Supplement