Exhibit 10.2
 

AMENDMENT NO. 3 TO SECOND AMENDED AND RESTATED
NOTE PURCHASE AGREEMENT
 

This AMENDMENT NO. 3 TO SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
(this “Amendment”), dated to be effective as of January 30, 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.
 
D. The parties hereto have determined that the terms and provisions of this
Amendment are not material for purposes of Section 7.3(a) of the Note Purchase
Agreement.
 
Agreement
 
1. Amendments to the Note Purchase Agreement.  The Note Purchase Agreement is
hereby amended as follows:
 
a.           The defined term “Leverage Ratio” in Section 1.1 of the Note
Purchase Agreement is hereby amended  and restated as follows:
 
“Leverage Ratio” has the meaning specified in the ABL Agreement as amended by
the First Amendment thereto dated to be effective as of January 30,
2010  (without giving effect to any future amendment, supplement or other
modification to the ABL Agreement).
 
b.           The defined term “Fixed Charge Coverage Ratio” is hereby added to
Section 1.1 of the Note Purchase Agreement:
 

--------------------------------------------------------------------------------

 
“Fixed Charge Coverage Ratio” has the meaning specified in the ABL Agreement as
amended by the First Amendment thereto dated to be effective as of January 30,
2010 (without giving effect to any future amendment, supplement or other
modification to the ABL Agreement).
 
c.           The term “Minimum Fixed Charge Coverage Ratio” in Section 1.1 of
the Note Purchase Agreement is hereby deleted in its entirety.
 
d.           Section 7.6(a) of the Note Purchase Agreement is hereby amended and
restated in its entirety as follows:
 
Parent and Issuer shall cause Consolidated Parent to, on a consolidated basis
with its Subsidiaries, maintain (i) a Fixed Charge Coverage Ratio at least equal
to 1.30:1.00 measured monthly on the last day of the month for the month ending
February 28, 2010 and thereafter measured quarterly as of the last day of each
Fiscal Quarter, in each case on a trailing twelve month basis and (ii) a
Leverage Ratio not greater than the ratio set forth below for each Fiscal
Quarter or month, as applicable, during the specified period, measured as of the
last day of each Fiscal Quarter or month, as applicable:
 
Period
Ratio
Month ending February 28, 2010
4.00:1.00
Fiscal Quarter ending April 30, 2010 and each
Fiscal Quarter thereafter
4.00:1.00

 
The Fixed Charge Coverage Ratio and the Leverage Ratio for the month ending
February 28, 2010, shall be calculated and reported to the Administrator and the
Funding Agent by March 12, 2010
 
e.           Section 7.6 of the Note Purchase Agreement is hereby amended by
adding a new subsection (c) 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 the Servicing Agreement,
as applicable) and the Back-Up Servicing Agreement (as defined in the Base
Indenture) (each such amendment, a “Restructuring Amendment”, and collectively,
the “Restructuring Amendments”) on or prior to March 5, 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 and (iii) 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 5, 2010 shall
constitute a “Series 2002-A Payout Event” as set forth in Section 9(a)(ii) of
the Series Supplement.
 
2

--------------------------------------------------------------------------------

 
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.

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.
 
3

--------------------------------------------------------------------------------

 
4. Miscellaneous. (a) 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]
 
 
 
 
 
4

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by
their respective officers thereunto duly authorized, as of the Effective Date.
 

 
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

 
 
 
 
 
Amendment No. 3 to
2nd A&R Note Purchase Agreement
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

 
 
 
 
 
Amendment No. 3 to
2nd A&R Note Purchase Agreement
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

 
 
 
 
 
Amendment No. 3 to
2nd A&R Note Purchase Agreement
S-3