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EXHIBIT 10.13
FIRST AMENDMENT TO CREDIT AGREEMENT
This Amendment is entered into as of February 29, 1996, among
Bank of America National Trust and Savings Association ("BofA"); The Bank of
California N.A. ("BankCal"); The Good Guys - California, Inc. a California
corporation ("Borrower"). BofA and BankCal are sometimes referred to as
"Banks" and each is a "Bank."
RECITALS
A. The Banks and the Borrower entered into a certain Credit
Agreement dated as of September 26, 1995 (the "Credit Agreement").
B. The Banks and the Borrower desire to amend the Agreement.
AGREEMENT
1. Definitions. Capitalized terms used but not defined in
this Agreement shall have the meaning given to them in the Credit Agreement.
2. Amendments. The Credit Agreement is hereby amended as
follows:
2.1 The definition of Tangible Net Worth in
paragraph 1.1 is hereby amended to read as follows:
"Tangible Net Worth" means the gross book
value of the assets of Guarantor on a consolidated basis
(exclusive of goodwill, patents, trademarks, trade names,
organization expense, treasury stock, unamortized debt
discount and expense, deferred charges and other like
intangibles) less (a) reserves applicable thereto, and (b) all
liabilities (including accrued and deferred income taxes).
2.2 Paragraph 6.4 is hereby amended to read as
follows:
6.4 Adjusted Tangible Net Worth. Maintain
on a consolidated basis Adjusted Tangible Net Worth of at
least the amount indicated as of the end of each quarter set
forth below. "Adjusted Tangible Net Worth" means Tangible Net
Worth (a) minus the proceeds of any public or private offering
of stock of the Guarantor on or after January 1, 1996, other
than stock sold under the Employee Stock Purchase Plan; (b)
minus the fair market value, on the date of sale, of the
Guarantor's stock sold to employees of the Guarantor or the
Borrower under the Employee Stock Purchase Plan on or after
January 1, 1996; provided, however, that the amount subtracted
from Tangible Net Worth under this subparagraph (b) shall not
exceed Two Million Five Hundred Thousand Dollars ($2,500,000)
per fiscal year; (c) plus the fair market value, on the date
of purchase, of any of the Guarantor's stock repurchased by
the Guarantor on or after January 1, 1996; provided, however,
that the amount added to Tangible Net Worth under this
subparagraph (c) shall not exceed Six Million Five Hundred
Thousand Dollars ($6,500,000).
Quarter Ending Amount
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March 31, 1996 $140,500,000
June 30, 1996 $141,500,000
September 30, 1996 $143,000,000
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December 31, 1996 $150,000,000
March 31, 1997 $151,000,000
June 30, 1997 $152,000,000
September 30, 1997 $154,000,000
2.3 Paragraph 6.8 is amended to read as follows:
6.8 Out-Of-Debt Requirement. For each one
hundred and twenty (120) day period ending on April 15 of each
year, Borrower and Guarantor must fulfill either the
requirements of (a) or of (b) below:
(a) Repay all outstanding advances,
and not draw any new advances, for a period of at
least thirty (30) consecutive calendar days during
such one hundred and twenty (120) day period. This
requirement must be fulfilled for the BofA Facility,
the BankCal Facility and any indebtedness permitted
under paragraphs 6.9(g) and (h) at the same time; or
(b) Reduce the amount of all advances
(including the BofA Facility, the BankCal Facility
and any indebtedness permitted under paragraphs
6.9(g) and (h)) to not more than Fifteen Million
Dollars ($15,000,000) for a period of at least sixty
(60) consecutive calendar days during such one
hundred and twenty (120) day period.
2.4 Subparagraph 6.9(h) is amended to read as
follows:
(h) additional indebtedness under
uncommitted facilities from either Bank; provided,
however, that the total outstanding indebtedness from
both Banks (whether under this Agreement or
otherwise) plus the total outstanding indebtedness
from other lenders under subparagraph (g) above must
not exceed the following at any one time: from
February 1 through October 31 of any year, Fifty
Million Dollars ($50,000,000); and at other times,
Seventy Five Million Dollars ($75,000,000).
2.5 Paragraph 6.12 is hereby amended to read as follows:
6.12 Dividends. Borrower and Guarantor shall
not (and shall not permit any of their subsidiaries to)
declare or pay any dividends on any of their respective shares
except dividends payable in capital stock, and not purchase,
redeem or otherwise acquire for value any of their respective
shares, or create any sinking fund in relation thereto;
provided, however, that Borrower and Guarantor may purchase
stock from their employees for a consideration not exceeding,
in the aggregate, One Million Five Hundred Thousand Dollars
($1,500,000) in any one fiscal year; such dollar limit to be
non-cumulative from year to year; and provided further that
Guarantor may, on or after January 1, 1996, purchase an
additional amount of its stock with a fair market value, on
the date of purchase, not to exceed Six Million Five Hundred
Thousand Dollars ($6,500,000) in the aggregate.
2.6 Paragraph 6.14 is amended to read as follows:
6.14 Capital Ownership. Borrower and
Guarantor each
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shall not cause, permit, or suffer any one shareholder to
control, directly, indirectly or through affiliates, more than
fifty percent (50%) of Guarantor's capital ownership; and
Borrower's capital stock must continue to be entirely owned by
Guarantor;
2.7 Subparagraph 6.29 is hereby deleted.
3. Representations and Warranties. When the Borrower signs
this Amendment, the Borrower represents and warrants to the Banks that:
(a) There is no event which is, or with notice or
lapse of time or both would be, an Event of Default under the
Agreement;
(b) The representations and warranties in the
Agreement are true and correct as of the date of this Amendment as if
made on the date of this Amendment;
(c) This Amendment is within the Borrower's powers,
has been duly authorized, and does not conflict with any of the
Borrower's organizational papers; and
(d) This Amendment does not conflict with any law,
agreement, or obligation by which the Borrower is bound.
4. Effect of Amendment. Except as provided in this
Amendment, all of the terms and conditions of the Agreement shall remain in
full force and effect.
5. Counterparts. This Amendment may be executed in
counterparts, each of which when so executed shall be deemed an original, but
all such counterparts together shall constitute but one and the same
instrument.
This Amendment is executed as of the date first stated above.
BANK OF AMERICA NATIONAL TRUST AND SAVINGS THE GOOD GUYS - CALIFORNIA, INC.
ASSOCIATION
By \s\ Xxxxx Xxxxxxxxxxx By \s\ Xxxxxx X. Xxxxx
Title Vice President Title President and CEO
By _______________________ By __________________________
Title ____________________ Title _______________________
THE BANK OF CALIFORNIA N.A.
By \s\ Xxxxx Xxxxxxxx
Title Vice President
By ________________________
Title _____________________
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Guarantor's Acknowledgment and Agreement
The Guarantor acknowledges the covenants applicable to it as set forth in the
foregoing Amendment and agrees to comply with them until full and final payment
of all of the Borrower's obligations under the Credit Agreement and any
instrument or agreement required under the Credit Agreement.
Date: February 29, 1996
THE GOOD GUYS, INC.
By __________________________
Title __________________________
By __________________________
Title _______________________
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