Exhibit 10.40
AMENDMENT NO. 1 AND JOINDER TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This AMENDMENT NO. 1 AND JOINDER TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “
Agreement ”) dated as of September 15, 2009 is by
and among the financial institutions listed on the signature pages
hereto as existing lenders (the “ Existing Lenders
”), the financial institutions listed on the signature hereto
as incremental lenders (the “ Incremental Lenders
”, and together with the Existing Lenders, the “
Lenders ”), Wachovia Capital Finance Corporation
(Central), as administrative agent and collateral agent for the
Lenders (“ Agent ”), and Gregg Appliances, Inc.,
an Indiana corporation (“ Borrower
”).
R E C I T A L S:
WHEREAS, Agent, Existing Lenders,
Borrower, and HHG Distributing, LLC, an Indiana limited liability
company (“ HHG ”), are parties to that certain
Amended and Restated Loan and Security Agreement dated as of
July 25, 2007 (as amended, the “ Loan Agreement
”; capitalized terms used and not defined herein shall have
the meanings assigned to them in the Loan Agreement, as amended
hereby);
WHEREAS, the Borrower has requested
that the Agent and Existing Lenders amend the Loan Agreement, and
the Agent and Existing Lenders have agreed to such amendment
pursuant to the terms and conditions set forth herein;
and
WHEREAS, the Borrower has delivered
to Agent its request to increase the Maximum Credit by $25,000,000
pursuant to Section 2.3 of the Loan Agreement, which amount is
the maximum increase permitted thereby, and the Incremental Lenders
have agreed to provide new or additional Commitments in the amounts
set forth on Schedule A hereto pursuant to the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of
the premises contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as
follows:
Section 1. Amendment to Loan
Agreement . Immediately upon the satisfaction of each of the
applicable conditions precedent set forth in Section 3 of this
Agreement, the following amendment to the Loan Agreement shall
become effective as of the date hereof:
(a) The definition of
“Borrowing Base” set forth in Section 1 of the
Loan Agreement is hereby amended by amending and restating
subclause (a)(i)(C)(1) of such definition to read as
follows:
“(1) ninety (90%) percent
of the Net Recovery Percentage multiplied by the Value of such
Eligible Inventory, or”
(b) The definition of “Cash
Dominion Event” set forth in Section 1 of the Loan
Agreement is hereby amended and restated to read as
follows:
“Cash Dominion Event”
shall mean either (a) an Event of Default shall exist or have
occurred and be continuing or (b) the period commencing on the
fifth (5 th
) consecutive Business Day on
which Excess Availability is less than $18,750,000 and ending on a
Cash Dominion Reversion.
(c) The definition of “Cash
Dominion Reversion” set forth in Section 1 of the Loan
Agreement is hereby amended and restated to read as
follows:
“Cash Dominion
Reversion” shall mean with respect to the first two
(2) Cash Dominion Events in any twelve (12) month period,
that Excess Availability has been equal to or greater than
$18,750,000 for sixty (60) consecutive days, provided ,
that , if a third Cash Dominion Event occurs during such
twelve (12) month period, a Cash Dominion Reversion will occur
only in the event that Excess Availability has been equal to or
greater than $18,750,000 for three hundred sixty
(360) consecutive days.
(d) The definition of
“Commitment” set forth in Section 1 of the Loan
Agreement is hereby amended and restated to read as
follows:
“Commitment” shall mean,
at any time, as to each Lender, the principal amount set forth next
to such Lender’s name on Schedule 1.27 hereto designated as
the Commitment of such Lender or on Schedule 1 to an Assignment and
Acceptance Agreement pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 13.7
hereof or on Schedule A to the First Amendment pursuant to which
such Lender became a Lender hereunder or increased its commitment
hereunder, as the same may be adjusted from time to time in
accordance with the terms hereof; sometimes being collectively
referred to herein as the “Commitments.”
(e) The definition of “Excess
Availability” set forth in Section 1 of the Loan
Agreement is hereby amended and restated to read as
follows:
“Excess Availability”
shall mean the amount, as determined by Agent, calculated at any
date of determination in accordance with the terms hereof, equal to
(a) the Borrowing Base (after giving effect to any Reserves
other than any Reserves in respect to Letter of Credit
Accommodations), minus (b) the sum of: (i) the amount of
all then outstanding and unpaid Obligations (other than any
outstanding Letter of Credit Accommodations) plus (ii) the
amount of all Reserves then established in respect of Letter of
Credit Accommodations; provided , however , that with
respect to calculations of “Excess Availability” made
under Sections 7.3, 9.18 and 9.21 and the definitions of
“Cash Dominion Event” and “Cash Dominion
Reversion” for dates of determination in October and November
of any year, the amount determined by the foregoing calculation
shall be increased by the lesser of (x) Suppressed
Availability and (y) $5,000,000.
(f) The definition of “Fee
Letter” set forth in Section 1 of the Loan Agreement is
hereby amended and restated to read as follows:
“Fee Letter” shall mean
(a) the letter agreement, dated May 4, 2007, by and among
Borrower, Agent, Term Loan Agent and Lead Arranger setting forth,
among other fees, certain fees payable by Borrower to Agent for the
benefit of itself and Lenders, as
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the same now exists or may hereafter
be amended, modified, supplemented, extended, renewed, restated or
replaced, and (b) the letter agreement, dated July 15,
2009, by and among Borrower, Agent and Lead Arranger setting forth
certain fees payable to the Lead Arranger.
(g) Section 1 of the Loan
Agreement is hereby amended by inserting, in the appropriate
alphabetical order, the following new definition:
“First Amendment” shall
mean that certain Amendment No. 1 and Joinder to Amended and
Restated Loan and Security Agreement, dated as of
September 15, 2009, by and among the Borrower, Agent and the
Lenders signatory thereto, pursuant to which the Maximum Credit was
increased pursuant to Section 2.3 hereof by the maximum amount
permitted thereby.
(h) The definition of
“Lenders” set forth in Section 1 of the Loan
Agreement is hereby amended and restated to read as
follows:
“Lenders” shall mean the
financial institutions which are signatories hereto as Lenders and
other persons made a party to this Agreement as a Lender in
accordance with Sections 2.3 and/or 13.7 hereof, and their
respective successors and assigns; each sometimes being referred to
herein individually as a “Lender.”
(i) The definition of “Maximum
Credit” set forth in Section 1 of the Loan Agreement is
hereby amended and restated to read as follows:
“Maximum Credit” shall
mean (i) prior to the effectiveness of the First Amendment,
the amount of $100,000,000, and (ii) from and after the
effectiveness of the First Amendment, the amount of $125,000,000
(which amount gives effect to the exercise of the maximum increase
in the Maximum Credit permitted by Section 2.3
hereof).
(j) The definition of “Pro
Rata Share” set forth in Section 1 of the Loan Agreement
is hereby amended and restated to read as follows:
“Pro Rata Share” shall
mean as to any Lender, the fraction (expressed as a percentage) the
numerator of which is such Lender’s Commitment and the
denominator of which is the aggregate amount of all of the
Commitments of Lenders, as adjusted from time to time in accordance
with the provisions of Sections 2.3 and 13.7 hereof;
provided , that, if the Commitments have been terminated,
the numerator shall be the unpaid amount of such Lender’s
Loans and its interest in the Letter of Credit Accommodations and
the denominator shall be the aggregate amount of all unpaid Loans
and Letter of Credit Accommodations.
(k) The definition of
“Required Lenders” set forth in Section 1 of the
Loan Agreement is hereby amended and restated to read as
follows:
“Required Lenders” shall
mean, at any time, those Lenders whose Pro Rata Shares aggregate
more than fifty (50%) percent of the aggregate of the
Commitments of all Lenders, or if the Commitments shall have been
terminated, Lenders to whom at least more than fifty
(50%) percent of the then outstanding Obligations are owing;
provided , that, so long as any
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one Lender’s Pro Rata Share is more than
fifty (50%) percent of the aggregate of the Commitments of all
Lenders, then Required Lenders shall mean such Lender and any other
Lender. For the purposes of determining Required Lenders, Wachovia
Capital Finance Corporation (Central) and Wells Fargo Retail
Finance, LLC shall be deemed to be one Lender.
(l) Section 1 of the Loan
Agreement is hereby amended by inserting, in the appropriate
alphabetical order, the following new definition:
“Suppressed
Availability” shall mean the amount, if positive, equal to
(x) the aggregate of (1) the amount determined in
accordance with subclause (i) of clause (a) of the
definition of “Borrowing Base” minus (2) Reserves,
minus (y) the Maximum Credit at such time.
(m) The increase in Maximum Credit
pursuant to Section 2.3 of the Loan Agreement shall be deemed
to have been duly completed upon the effective date of the
Agreement and such provision shall have no further force and
effect.
(n) Section 6.3(b) of the Loan
Agreement is hereby amended by deleting the reference to
“Chicago, Illinois” appearing therein and substituting
“Boston, Massachusetts” in its place.
(o) Section 6.5 of the Loan
Agreement is hereby amended by deleting the reference to
“Chicago, Illinois” appearing therein and substituting
“Boston, Massachusetts” in its place.
(p) Section 6.9(b) of the Loan
Agreement is hereby amended by deleting each reference to
“Chicago, Illinois” appearing therein and substituting
“Boston, Massachusetts” in each such place.
(q) Section 6.11(i) of the Loan
Agreement is hereby amended and restated to read as
follows:
“(i) Each Person that is a
Lender as of the date of this Agreement or becomes a Lender after
the date of this Agreement (i) either (a) represents and
warrants to Borrower that such Person is incorporated or organized
under the laws of the United States or a state thereof or
(b) if such Person is organized under the laws of any
jurisdiction other than the United States or any State thereof,
agrees to furnish to Agent and Borrower prior to the time that
Agent or Borrower is required to make any payment of principal,
interest or fees hereunder, duplicate executed originals of either
U.S. Internal Revenue Service Form W-8BEN or W-8ECI, as applicable
(wherein such Lender claims entitlement to the benefits of a tax
treaty that provides for a complete exemption from U.S. federal
income withholding tax on all payments hereunder) and agrees to
provide new forms upon the expiration of any previously delivered
form or comparable statements in accordance with applicable U.S.
law and regulations and amendments thereto, duly executed and
completed by such Lender, and (ii) agrees to comply with all
applicable U.S. laws and regulations with regard to such
withholding tax exemption.”
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(r) Section 7.3(d) of the Loan
Agreement is hereby amended and restated to read as
follows:
“(d) upon Agent’s
request, Borrower shall deliver or cause to be delivered to Agent
written appraisals as to the Inventory in form, scope and
methodology reasonably acceptable to Agent and by an appraiser
reasonably acceptable to Agent, addressed to Agent and Lenders and
upon which Agent and Lenders are expressly permitted to rely:
(i) one (1) time in any twelve (12) month period at
Borrower’s expense if average daily Excess Availability
(calculated at the end of each calendar month using the actual
number of days in such month) is equal to or greater than
$30,000,000 (it being acknowledged and agreed that the collateral
appraisal delivered to Agent in connection with the execution of
the First Amendment shall count as
