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EXHIBIT 10.14
FIFTH AMENDMENT TO LOAN AGREEMENT
THIS FIFTH AMENDMENT TO LOAN AGREEMENT (this "Fifth Amendment") is
entered into as of May 18, 1999, by and among THE GOOD GUYS - CALIFORNIA, INC.,
a California corporation ("Borrower"), each of the financial institutions from
time-to-time listed on Schedule I attached to the Loan Agreement defined below,
as amended from time-to-time (collectively, the "Lenders"), and FOOTHILL CAPITAL
CORPORATION, a California corporation, as successor to XXXXX FARGO BANK,
NATIONAL ASSOCIATION ("Foothill"), as agent for the Lenders (in such capacity,
the "Agent").
RECITALS
A. Borrower is currently indebted to the Lenders pursuant to the terms and
conditions of that certain Loan Agreement among Borrower, the Lenders and the
Agent dated as of September 29, 1997, as amended from time-to-time (the "Loan
Agreement").
B. The Lenders, the Agent and Borrower have agreed to certain changes in the
terms and conditions set forth in the Loan Agreement and have agreed to amend
the Loan Agreement to reflect such changes.
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
I. Amendment to Section 1.8. The definition of "Applicable Maximum
Amount" set forth in Section 1.8 of the Loan Agreement is amended in its
entirety to read as follows:
"Applicable Maximum Amount" means (a) from April 29, 1999,
through and including July 7, 1999, $82,500,000, and (b) at any
other time, $75,000,000.
II. Amendment to Section 2.1(c). Section 2.1(c) of the Loan Agreement
is amended in its entirety to read as follows:
(c) Overadvance Subfeature; Non-Compliance with Advance Limitations.
(i) Each Lender hereby severally agrees, on a pro rata basis, to
make Revolving Advances to Borrower from time-to-time for
the period from April 29, 1999, through and including July
7, 1999, in excess of the amounts available under the
lending formulas (each, an "Overadvance"), but nonetheless
subject to the Applicable Maximum Amount. The aggregate
principal amount of such Overadvances shall not exceed, as
of any date of determination during said period, $7,500,000.
(ii) The foregoing shall be referred to herein as the
"Overadvance Subfeature." Each Overadvance made by Lender
under the Overadvance Subfeature shall be
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deemed a Revolving Advance under the Line of Credit and
shall be repaid by Borrower in accordance with the terms and
conditions of this Agreement applicable to such Revolving
Advances; provided, however, that (A) Overadvances under the
Overadvance Subfeature shall not be subject to the lending
formulas set forth in Section 2.1(a), and (B) the aggregate
amount of all outstanding Overadvances under the Overadvance
Subfeature shall be reserved under the Line of Credit and
shall not be available for Revolving Advances thereunder.
(iii) In the event that the outstanding amount of any component of
the Revolving Advances, or the aggregate amount of the
outstanding Revolving Advances and Letter of Credit
Obligations, exceed the amounts available under the lending
formulas, the sublimit for Overadvances set forth in Section
2.1 (c)(i), the sublimits for Letters of Credit set forth in
Section 2.2(b) or the then Applicable Maximum Amount, as the
case may be, such event shall not limit, waive or otherwise
affect any rights of the Agent in that circumstance or on
any future occasions and Borrower shall, upon demand by the
Agent, which may be made at any time or from time-to-time,
immediately repay to Lenders the entire amount of any such
excess(es) for which payment is demanded.
III. Exhibit B. Exhibit B (the Line of Credit Note) to the Loan
Agreement is amended and restated in its entirety by Exhibit B attached hereto
as Annex I.
IV. Conditions Precedent. The effectiveness of this Fifth Amendment and
the Agent's and Lenders' agreements set forth herein are subject to the
satisfaction of each of the following conditions precedent on or before May 18,
1999:
Documentation. Borrower shall have delivered or caused to be delivered
to the Agent, at Borrower's sole cost and expense the following, each of which
shall be in form and substance satisfactory to the Agent:
(a) two executed original counterparts of this Fifth Amendment;
(b) executed counterparts of the Consent and Reaffirmation of Guarantor
attached hereto in the form of Annex II;
(c) an Amended and Restated Line of Credit Note executed by Borrower in
favor of Foothill substantially in the form of Annex I attached hereto;
(d) such additional agreements, certificates, reports, approvals,
instruments, documents, consents and/or reaffirmations as the Agent or
any Lender may reasonably request; and
(e) payment to Foothill of an amendment fee in the amount $75,000 (the
"Fee"). The Fee shall apply for the period commencing May 30, 1999
through July 7, 1999. If Borrower's amended financing, as contemplated
by that certain commitment letter between Foothill and Borrower dated
May 17, 1999, is closed on or before July 7, 1999, Borrower will
receive a credit against the syndication fee payable to Foothill, as
agent, in an amount equal to the prorated portion of the Fee that is
applicable to the period after such closing.
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V. Miscellaneous. Except as specifically provided herein, all terms and
conditions of the Loan Agreement remain in full force and effect, without waiver
or modification. All terms defined in the Loan Agreement shall have the same
meaning when used in this Fifth Amendment. This Fifth Amendment and the Loan
Agreement shall be read together, as one document.
VI. Representations and Warranties. Borrower hereby remakes all
representations and warranties contained in the Loan Agreement and reaffirms all
covenants set forth therein. Borrower further certifies that as of the date of
this Fifth Amendment there exists no Default or Event of Default as defined in
the Loan Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment
to be executed as of the day and year first written above.
THE GOOD GUYS - CALIFORNIA, INC., FOOTHILL CAPITAL CORPORATION,
a California corporation a California corporation,
as Agent and Lender
By: By:
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Xxxx Xxxxxx
Title: Vice President
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ANNEX I
AMENDED AND RESTATED
LINE OF CREDIT NOTE
$82,500,000 May 18, 1999
FOR VALUE RECEIVED, the undersigned, THE GOOD GUYS - CALIFORNIA, INC.,
a California corporation ("Borrower"), hereby promises to pay to the order of
FOOTHILL CAPITAL CORPORATION, a California corporation, as successor to XXXXX
FARGO BANK, NATIONAL ASSOCIATION, a national banking association ("Lender"), on
the Line Maturity Date the principal sum of Eighty-Two Million Five Hundred
Thousand Dollars ($82,500,000), or such lesser amount as shall equal the
aggregate outstanding principal balance of all Revolving Advances made by Lender
to Borrower pursuant to the Loan Agreement referred to below.
This promissory note is one of the Line of Credit Notes
referred to in, and subject to the terms of, that certain Loan
Agreement among Borrower, Lender and the other financial institutions
from time-to-time parties thereto (collectively, the "Lenders"), and
Xxxxx Fargo Bank, National Association, as agents for the Lenders,
dated as of September 29, 1997 (as amended, modified or supplemented
from time-to-time, the "Loan Agreement"). Capitalized terms used herein
shall have the respective meanings assigned to them in the Loan
Agreement. This promissory note amends and restates in its entirety
that certain Line of Credit Note dated as of April 29, 1999 executed
and delivered by Borrower to the order of Lender in the original
principal amount of up to $82,500,000 (the "Prior Note"). Amounts
outstanding and committed under the Prior Note shall, upon the
effectiveness of this Note be deemed to be outstanding and committed
hereunder and evidenced hereby, subject, however, to all terms and
conditions hereunder and under the Loan Agreement.
Borrower further promises to pay interest on the outstanding
principal balance hereof at the interest rates, and payable on the
dates, set forth in the Loan Agreement. All payments of principal and
interest hereunder shall be made to Agent, at Agent's Office, for the
account of Lender, in lawful money of the United States and in same day
or immediately available funds.
Lender is authorized, but not required, to record the date and
amount of each Revolving Advance evidenced hereby, each conversion to a
different interest rate and the length of each Fixed Rate Term, the
date and amount of each payment of principal and interest hereunder,
and the resulting unpaid principal balance hereof, in Lender's internal
records, and any such recordation shall be prima facie evidence of the
accuracy of information so recorded; provided however, that Lender's
failure to so record shall not limit or otherwise affect the
obligations of Borrower hereunder and under the Loan Agreement to repay
the principal hereof and interest hereon.
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The Loan Agreement provides, among other things, for
acceleration (which in certain cases shall be automatic) of the
maturity hereof upon the occurrence of certain stated events, in each
case without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by Borrower.
This promissory note is secured by certain collateral more
specifically described in the Loan Agreement and the other Loan
Documents.
This promissory note shall be governed by and construed in
accordance with the laws of the State of California.
THE GOOD GUYS - CALIFORNIA, INC.,
a California corporation
By:
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Title:
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ANNEX II
CONSENT AND REAFFIRMATION OF GUARANTOR
Reference is hereby made to the foregoing Fifth Amendment to Loan
Agreement ("Fifth Amendment") dated as of May 18, 1999, by and among The Good
Guys - California, Inc., a California corporation ("Borrower"), each of the
financial institutions from time-to-time listed on Schedule I attached to the
Loan Agreement described therein, as amended from time-to-time (collectively,
the "Lenders"), and Foothill Capital Corporation, a California corporation, as
successor to Xxxxx Fargo Bank, National Association ("Xxxxx Fargo"), as agent
for the Lenders (in such capacity, the "Agent").
In order to induce the Agent and the Lenders to enter into the
Fifth Amendment, the undersigned hereby consents to the execution,
delivery and performance by Borrower, the Agent and the Lenders of the
Fifth Amendment and all other documents, instruments and agreements now
or hereafter executed in connection therewith (collectively, together
with the Fifth Amendment, the "Fifth Amendment Documents"). In
connection therewith, the undersigned (a) expressly and knowingly
reaffirms its liability under the Continuing Guaranty dated as of
September 29, 1997 (the "Guaranty") and any and all security
agreements, pledge agreements, deeds of trust, mortgages and other
collateral documents (collectively, together with the Guaranty, the
"Third Party Documents"), heretofore executed and delivered by the
undersigned from time-to-time in favor of the Agent, for the benefit of
the Lenders, (b) expressly agrees to be and remain liable under the
terms of such Third Party Documents for the obligations of Borrower to
the Agent and the Lenders and (c) acknowledges that it has no defense,
offset or counterclaim whatsoever against the Agent or the Lenders with
respect to the Third Party Documents to which it is a party.
The undersigned further agrees that the Third Party Documents to which
it is a party shall remain in full force and effect and are hereby ratified and
confirmed and shall guarantee payment and performance of, or continue to
constitute collateral security for, as the case may be, of all of Borrower's
obligations under the Loan Agreement and related Loan Documents, as any one or
more of the same may be amended by the Fifth Amendment Documents. The
undersigned acknowledges that (a) none of the Agent or the Lenders has any
obligation to inform it of the particulars of any modification or amendment to
the Loan Agreement or any other Loan Document executed in connection therewith,
and (b) it has established satisfactory means by which Borrower keeps it
informed with respect to any modification of or amendment to the Loan Agreement
and related Loan Documents.
The undersigned further agrees that the execution of this
Consent and Reaffirmation is not necessary for the continued validity
and enforceability of the Third Party Documents to which it is a party,
but is executed to induce the Agent and the Lenders to enter into the
Fifth Amendment Documents. The undersigned further agrees that none of
the Agent or the Lenders shall have any obligation to notify it of any
actions or omissions to act with respect to its dealings with Borrower.
IN WITNESS WHEREOF, the undersigned, intending to be legally
bound hereby, has caused this Consent and Reaffirmation to be executed
as of May 18, 1999.
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THE GOOD GUYS, INC.
a Delaware corporation
By:
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Title:
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