SECOND AMENDMENT
TO
CREDIT AGREEMENT
This Second Amendment is made this 11th day of March, 1997, by and
between ULTIMATE ELECTRONICS, INC., a Delaware corporation (the "Borrower"),
NORWEST BANK COLORADO, NATIONAL ASSOCIATION (the "Lender") and NORWEST
BUSINESS CREDIT, INC, a Minnesota corporation, as administrative agent for
the Lender (the "Administrative Agent").
RECITALS
The Borrower, the Lender and the Administrative Agent entered into a
Credit Agreement dated as of November 21, 1996, as amended (the "Credit
Agreement").
The Borrower has requested that the Lender change certain affirmative
covenants in the Credit Agreement and waive certain defaults. The Lender is
willing to do so on the terms and subject to the conditions set forth herein.
NOW THEREFORE, in consideration of the premises and the mutual promises
herein contained, the parties hereto agree as follows:
1. Section 6.13 of the Credit Agreement is hereby amended to read in
its entirety as follows:
"Section 6.13 FINANCIAL COVENANTS. Maintain the following:
(a) A ratio of current assets to the sum of current liabilities
plus the aggregate outstanding balance under the Loan of at least 1.10 to
1.00 computed monthly as at the end of each month. Current assets and current
liabilities shall be calculated in accordance with GAAP. For purposes of
this SECTION 6.13(a), prepaid expenses and stockholder receivables included
in the calculation of current assets shall not exceed $1,250,000.
(b) Maintain during each of the periods set forth below, a minimum
Net Worth calculated as at the end of each month in such period in an amount
which is greater than or equal to the amount set forth opposite such period;
PROVIDED THAT the minimum Net Worth that the Borrower is required to maintain
shall be increased by the sum of 100% of the net proceeds received by the
Borrower for the sale of any equity securities after the date of this
Agreement:
PERIOD MINIMUM NET WORTH
------ -----------------
February 28, 1997 to and including $41,000,000
November 30, 1997
December 1, 1997 to and including $43,000,000
January 31, 1998
(c) Maintain on each of the dates set forth below a maximum ratio of
Funded Indebtness to EBITDA determined for the four fiscal quarters of the
Borrower ending on such date that is less than or equal to the ratio set
forth opposite such date:
Date Ratio
---- -----
April 30, 1997 4.0 to 1.0
July 31, 1997 4.0 to 1.0
October 31, 1997 3.5 to 1.0
January 31, 1998 3.0 to 1.0"
2. The Lender hereby waives any default or Event of Default of the
Borrower, occurring on or prior to January 31, 1997 under the Financial
Covenants in Section 6.13(b) and 6.13(c) of the Credit Agreement as of the
date any such default or Event of Default occurred.
3. Except as specifically amended hereby, the Credit Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to be duly executed as the day and year first above written.
ULTIMATE ELECTRONICS, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------
Its: Vice President
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NORWEST BANK COLORADO, NATIONAL ASSOCIATION
By: /s/ Xxxxx Xxxxx
-------------------------------------
Its: Vice President
-------------------------------------
NORWEST BUSINESS CREDIT, INC.
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------
Its: Assistant Vice President
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