EXHIBIT 10.1
AMENDMENT NUMBER TWO TO LOAN AND SECURITY AGREEMENT
This Amendment Number Two to Loan and Security Agreement ("Amendment")
is entered into as of January 31, 1999, by and between FOOTHILL CAPITAL
CORPORATION, a California corporation ("Foothill"), and SOUND ADVICE, INC., a
Florida corporation ("Borrower"), in light of the following:
FACT ONE: Borrower and Foothill have previously entered into that
certain Loan and Security Agreement, dated as of April 11, 1996 (as amended, the
"Agreement").
FACT TWO: Borrower and Foothill desire to further amend the Agreement
as provided for herein.
NOW, THEREFORE, Borrower and Foothill hereby amend the Agreement as
follows:
1. DEFINITIONS. All initially capitalized terms used in this Amendment
shall have the meanings given to them in the Agreement unless specifically
defined herein.
2. AMENDMENTS.
(A) Section 3.5 of the Agreement is amended to read as
follows:
"3.5 EARLY TERMINATION BY BORROWER. The provisions of
SECTION 3.3 that allow termination of this Agreement by Borrower only
on the Renewal Date and certain anniversaries thereof notwithstanding,
Borrower has the option, at any time upon 60 days prior written notice
to Foothill, to terminate this Agreement by paying to Foothill, in
cash, the Obligations (including an amount equal to the full amount of
the outstanding L/Cs or L/C Guarantees), together with a premium (the
"Early Termination Premium") equal to: (a) 1.25% of the Maximum Amount,
if terminated before August 1, 1999; (b) 1.00% of the Maximum Amount,
if terminated on or after July 31, 1999 but before August 1, 2000; (c)
0.40% of the Maximum Amount, if terminated on or after July 31, 2000
but before July 31, 2001; and (d) $0 if terminated on or after the
Renewal Date."
(B) Section 6.13(a) of the Agreement is amended to read as
follows:
"6.13 FINANCIAL COVENANTS.
(a) Borrower shall maintain:
(i) Current Ratio. A ratio of
Consolidated Current Assets divided by Consolidated Current Liabilities
of at least 1.0 - 1.0, measured on the last day of each fiscal quarter;
and
(ii) Working Capital. Working
Capital of not less
1
than $2,000,000, measured on the last day of each fiscal quarter."
(C) Section 7.10 of the Agreement is amended to read as
follows:
"7.10 CAPITAL EXPENDITURES. Make any capital
expenditure, or any commitment therefor, in excess of $1,750,000 for
any individual transaction or where the aggregate amount of such
capital expenditures, made or committed for in any fiscal year, is in
excess of $5,000,000, or in excess of $5,500,000 for the FYE 1/31/99."
(D) Attached hereto is an amendment to Schedule E-1 to the
Agreement listing additional Inventory and Equipment locations.
3. REPRESENTATIONS AND WARRANTIES. Borrower hereby affirms to Foothill
that all of Borrower's representations and warranties set forth in the Agreement
are true, complete and accurate in all respects as of the date hereof, except to
the extent expressly modified hereby.
4. NO DEFAULTS. Borrower hereby affirms to Foothill that no Event of
Default has occurred and is continuing as of the date hereof.
5. COSTS AND EXPENSES. Borrower shall pay to Foothill all of Foothill's
out-of-pocket costs and expenses (including, without limitation, the fees and
expenses of its counsel, which counsel may include any local counsel deemed
necessary, search fees, filing and recording fees, title insurance premiums,
documentation fees, appraisal fees, travel expenses, and other fees) arising in
connection with the preparation, execution, and delivery of this Amendment and
all related documents.
6. CONDITION PRECEDENT. The effectiveness of this Amendment is
expressly conditioned upon the receipt by each of the parties of a counterpart
of this Amendment, executed by the other party.
7. LIMITED EFFECT. In the event of a conflict between the terms and
provisions of this Amendment and the terms and provisions of the Agreement, the
terms and provisions of this Amendment shall govern. In all other respects, the
Agreement, as amended and supplemented hereby, shall remain in full force and
effect.
8. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which when so executed and delivered shall be deemed to be an original. All
such counterparts, taken together, shall constitute but one and the same
Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first set forth above.
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FOOTHILL CAPITAL CORPORATION,
a California corporation
By: /s/ XXXXX X. XXXXXXXX
---------------------------------
Title: Assistant Vice President
SOUND ADVICE, INC.,
a Florida corporation
By: /s/ XXXXXXX X. XXXXXXXXX
---------------------------------
Title: CFO and Treasurer
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AMENDMENT TO SCHEDULE E-1
LOCATIONS OF INVENTORY AND EQUIPMENT
The following additional retail showrooms are added to Schedule E-1:
1. 00000 XX Xxxxxxx Xxx, Xxxxx Xxxx Xxxxx, XX 00000
2. 0000 Xxxxx Xxxxxx Xx., Xxxxxxxxxxx, XX 00000
3. 000 Xxxxx Xxxx, Xxxx Xxxxx, XX 00000
SCHEDULE E-1
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