FIRST AMENDMENT TO SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
This FIRST AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT (the "AMENDMENT") is made and entered into on 12th day of December,
2001, to be effective as of the date hereof (the "EFFECTIVE DATE"), by and among
ULTIMATE ELECTRONICS, INC., a Delaware corporation ("ULTIMATE), ULTIMATE
INTANGIBLES CORP., a Colorado corporation ("INTANGIBLES"), ULTIMATE LEASING
CORP., a Colorado corporation ("LEASING"), FAST TRAK, INC., a Minnesota
corporation ("FAST TRAK"), ULTIMATE ELECTRONICS PARTNERS CORP., a Colorado
corporation ("ELECTRONICS"), ULTIMATE ELECTRONICS LEASING LP, a Texas limited
partnership ("UEL"), and ULTIMATE ELECTRONICS TEXAS LP, a Texas limited
partnership ("UET") (Ultimate, Intangibles, Leasing, Fast Trak, Electronics, UEL
and UET being hereinafter referred individually referred to as "BORROWER and
collectively referred to as the "BORROWERS"), XXXXX FARGO RETAIL FINANCE, LLC, a
Delaware limited liability company ("WFRF"), as the arranger and administrative
agent (WFRF, in such capacity, the "AGENT"), and WFRF as a Lender (WFRF, in its
capacity as a Lender, being hereinafter referred to as the "LENDER").
PRELIMINARY STATEMENTS:
1. Borrowers, Agent and Lender have entered into that certain Second
Amended and Restated Loan and Security Agreement, dated as of September 28, 2001
(as amended from time to time, the "AGREEMENT").
2. Borrowers, Agent and Lender desire to amend the Agreement as
hereinafter set forth.
AGREEMENTS:
NOW, THEREFORE, in consideration of the agreements herein contained,
subject to the terms and conditions set forth herein, Borrowers, Agent and
Lender hereby agree as follows, and agree that, subject to satisfaction of the
provisions of SECTION 3 hereof, the agreements and amendments specified below
shall be effective from and after the Effective Date and shall be incorporated
into the Agreement and shall supersede those provisions in the Agreement
referenced as follows:
1. DEFINITIONS. Capitalized terms used in this Amendment, to the
extent not otherwise defined herein, shall have the same meaning as in the
Agreement, as amended hereby.
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2. AMENDMENTS.
(a) Effective as of the Effective Date, the definition of
"Maximum Amount" contained in SECTION 1.1 of the Agreement is amended and
restated to read in its entirety as follows:
"`MAXIMUM AMOUNT' means (i) until the Initial Syndication
Date, $55,000,000.00, and (ii) upon and after the Initial
Syndication Date, $80,000,000.00."
(b) Effective as of the Effective Date, the definition of
"Required Lenders" contained in SECTION 1.1 of the Agreement is amended
and restated to read in its entirety as follows:
"`REQUIRED LENDERS' means (a) Agent and (b) (i) during such
times as there are three or more Lenders, Lenders whose Pro Rata
Shares aggregate 66% of the total Commitments, or if the
Commitments have been terminated irrevocably, 66% of the
Obligations then outstanding, or (ii) during such times as there
are fewer than three Lenders, all Lenders."
(c) Effective as of the Effective Date, the following new
definitions are hereby added to SECTION 1.1 of the Agreement to read as
follows and to be inserted in their proper alphabetical order:
"AVAILABILITY BLOCK AMOUNT' means (i) during the period
commencing December 16 of each calendar year (beginning December
16, 2001) and continuing through September 14 of the following
calendar year, $5,000,000.00 and (ii) during the period commencing
September 15 of each calendar year and continuing through December
15 of such calendar year, $0.00. Notwithstanding the foregoing,
commencing the date that WFRF's Commitment is equal to or less
than $45,000,000.00 and continuing thereafter, the term
`Availability Block Amount' shall mean $0.00."
`INITIAL SYNDICATION DATE' means the date on which a
financial institution other than WFRF becomes a 'Lender' under
this Agreement with a Commitment of not less than $25,000,000.00."
(d) Effective as of the Effective Date, SECTION 2.1(b) of the
Agreement is amended and restated to read in its entirely as follows:
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"(b) Subject to the terms and conditions of this Agreement, and
during the term of this Agreement, each Lender with a Commitment agrees
(severally, not jointly or jointly and severally) to make advances
(`ADVANCES') to Borrowers in an amount at any one time outstanding not to
exceed such Lender's Pro Rata Share of an amount equal to THE LESSER OF
(i) Maximum Amount LESS the Letter of Credit Usage, or (ii) the Borrowing
Base LESS the Letter of Credit Usage. For purposes of this Agreement,
`BORROWING BASE,' as of any date of determination, shall mean the result
of:
(u) THE LESSER OF
(i) 70% of the amount of Eligible
Accounts, and
(ii) $2,500,000; PLUS
(v) 70% of the Cost of Eligible Inventory, PLUS
(w) the Special Inventory Advance Amount, PLUS
(x) the Real Estate Advance Amount, MINUS
(y) the aggregate of such Reserves Against
Availability as may have been established by
Agent, MINUS
(z) the Availability Block Amount."
(e) Effective as of the Effective Date, SECTION 2.3(i) of
the Agreement is amended by deleting therefrom the reference to "90 days" and
substituting therefor "60 days."
(f) Effective as of the Effective Date, SECTION 3.4 of the
Agreement is amended and restated to read in its entirety as follows:
"3.4 CONDITIONS PRECEDENT TO REAL ESTATE ADVANCES. The
obligation of the Lender Group to make the initial Real Estate
Advance, is subject to the fulfillment, to the satisfaction of
Required Lenders, of each of the conditions precedent set forth
below.
(a) Receipt by the Agent of the following:
(i) Appraisal of the fair market value of the
Thornton Colorado Facility, such appraisal to be in form and
substance satisfactory to Required Lenders and prepared by an
appraiser satisfactory to Required Lenders.
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(ii) Mortgage duly executed by Parent, granting
Agent, for the benefit of the Lender Group, a first priority Lien
in the Thornton Colorado Facility.
(iii) Mortgagee title insurance policies (or marked
commitments to issue the same) for the Thornton Colorado Facility
issued by a title insurance company satisfactory to Required
Lenders (each a 'MORTGAGE POLICY' and, collectively, the 'MORTGAGE
POLICIES') in amounts satisfactory to Required Lenders assuring
Required Lenders that the Mortgage on the Thornton Colorado
Facility creates valid and enforceable first priority mortgage
Liens on the Thornton Colorado Facility free and clear of all
defects and encumbrances except Permitted Liens, and the Mortgage
Policies otherwise shall be in form and substance satisfactory to
Required Lenders;
(iv) a phase-I environmental report on the
Thornton Colorado Facility.
(v) a real estate survey with respect to each
parcel composing the Thornton Colorado Facility.
(b) The obligation of the Lender Group to continue to
make Real Estate Advances is subject to the Required Lenders'
determination that the reports, appraisals and surveys furnished
pursuant to SUBSECTION (a) hereof are accurate and complete and
reflect the current condition and the market value of the
property.
(c) The environmental consultants, appraisers and
surveyors retained for such reports, appraisals or surveys, the
scope of the reports, appraisals or surveys, and the results
thereof shall be acceptable to Required Lenders in the sole
discretion of Required Lenders."
3. CONDITIONS. The obligation of Agent and Lender to be bound by the
provisions of this Amendment shall be subject to the fulfillment of the
following conditions precedent on or before the date hereof:
(a) Agent shall have received all of the following, each in
form and substance satisfactory to Agent, in its sole discretion, and
each duly executed by each party thereto:
(i) This Amendment; and
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(ii) All other documents Agent may request with respect
to any matter relevant to this Amendment or the transactions
contemplated hereby.
(b) No Event of Default shall have occurred and be continuing
and no Default shall exist, unless such Event of Default or Default has
been specifically waived in writing by Lender.
(c) Borrowers shall have performed and complied with all
agreements and conditions contained in the Agreement and the other Loan
Documents which are required to be performed or complied with by
Borrowers before or on the date hereof.
(d) The representations and warranties contained in the
Agreement, as amended hereby, and the other Loan Documents shall be true
and correct in all material respects as of the date hereof, with the same
force and effect as though made on and as of this date.
(e) No material adverse change shall have occurred in the
business operations, financial condition or prospects of any Borrower,
and no material adverse litigation shall be pending or, to the knowledge
of any Borrower, threatened, against any Borrower.
(f) All corporate and legal proceedings and all documents
required to be completed and executed by the provisions of, and all
instruments to be executed in connection with the transactions
contemplated by, this Amendment and any related agreements shall be
satisfactory in form and substance to Agent.
4. NO WAIVER. Except as otherwise specifically provided for in this
Amendment, nothing contained herein shall be construed as a waiver by Agent or
Lender of any covenant or provision of the Agreement, the other Loan Documents,
this Amendment, or of any other contract or instrument between Borrowers and
Agent or Lender, and the failure of Agent or Lender at any time or times
hereafter to require strict performance by Borrowers of any provision thereof
shall not waive, affect or diminish any right of Agent or Lender to thereafter
demand strict compliance therewith. Each of Agent and the Lender hereby reserve
all rights granted under the Agreement, the other Loan Documents, this Amendment
and any other contract or instrument between Borrowers and Agent or Lender.
5. REPRESENTATIONS AND WARRANTIES. Each Borrower hereby represents
and warrants to Agent and Lender that (a) the execution, delivery and
performance of this Amendment and any and all other Loan Documents executed
and/or delivered in connection herewith have been authorized by all requisite
action on the part of such Borrower and will not violate the organizational and
governing documents of such Borrower; (b) the representations and warranties
contained in the Agreement, as amended hereby, and any other Loan Documents are
true and correct on and as of the date hereof and on and as of the date of
execution hereof as though made on and as of each such date; (c) no Default or
Event of Default under the
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Agreement, as amended hereby, has occurred and is continuing, unless such
Default or Event of Default has been specifically waived in writing by Lender;
and (d) such Borrower is in full compliance with all covenants and agreements
contained in the Agreement and the other Loan Documents, as amended hereby.
6. SEVERABILITY. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
7. EXPENSES. Borrowers shall pay all out-of-pocket expenses of Agent
and Lender arising in connection with the preparation, execution, and delivery
of this Amendment, including, but not limited to, all reasonable legal fees and
expenses incurred by Agent and Lenders.
8. CONTINUED EFFECT. Except to the extent amended hereby, all terms,
provisions and conditions of the Agreement and all of the other Loan Documents
shall continue in full force and effect and shall remain enforceable and binding
in accordance with their respective terms.
9. FURTHER ASSURANCES. Borrowers shall, at Agent's request, promptly
execute or cause to be executed and delivered to Agent any and all documents,
instruments or agreements deemed necessary by Agent to continue perfection of
Agent's Liens, to facilitate collection of the Collateral or otherwise to give
effect to or carry out the terms or intent of this Amendment.
10. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which shall for all purposes be deemed an original and all
of which are identical. All parties need not execute the same counterpart.
11. FINAL AGREEMENT. THIS WRITTEN AMENDMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
12. RELEASE. EACH BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE
WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS
LIABILITY TO REPAY THE "OBLIGATIONS" OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF
ANY KIND OR NATURE FROM AGENT OR LENDER. EACH BORROWER HEREBY VOLUNTARILY AND
KNOWINGLY RELEASES AND FOREVER DISCHARGES EACH OF AGENT AND LENDER, ITS
PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS
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AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION,
DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN,
ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR
CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE
THE DATE THIS AMENDMENT IS EXECUTED, WHICH SUCH BORROWER MAY NOW OR HEREAFTER
HAVE AGAINST AGENT OR LENDER, ITS PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS
AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF
CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM
ANY "LOANS", INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING,
TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST
LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE
AGREEMENT OR OTHER LOAN DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS
AMENDMENT.
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EXECUTED to be effective as of the Effective Date.
BORROWERS:
ULTIMATE ELECTRONICS, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxx
------------------------------------------------
Xxxx X. Xxxxxxx, Senior Vice President
ULTIMATE INTANGIBLES CORP.,
a Colorado corporation
By: /s/ Xxxx Xxxxx-Xxxxxxxx
------------------------------------------------
Xxxx Xxxxx-Xxxxxxxx, President
ULTIMATE LEASING CORP.,
a Colorado corporation
By: /s/ Xxxx Xxxxx-Xxxxxxxx
------------------------------------------------
Xxxx Xxxxx-Xxxxxxxx, President
FAST TRAK, INC.,
a Minnesota corporation
By: /s/ Xxxx X. Xxxxxxx
------------------------------------------------
Xxxx X. Xxxxxxx, Secretary
ULTIMATE ELECTRONICS PARTNERS CORP.,
a Colorado corporation
By: /s/ Xxxx Xxxxx-Xxxxxxxx
------------------------------------------------
Xxxx Xxxxx-Xxxxxxxx, President
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ULTIMATE ELECTRONICS LEASING LP,
a Texas limited partnership
By: Ultimate Leasing Corp., its General
Partner
By: /s/ Xxxx Xxxxx-Xxxxxxxx
-----------------------------------------
Xxxx Xxxxx-Xxxxxxxx, President
ULTIMATE ELECTRONICS TEXAS LP,
a Texas limited partnership
By: Ultimate Electronics, Inc., its General
Partner
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------------
Xxxx X. Xxxxxxx, Senior Vice
President
AGENT AND LENDER:
XXXXX FARGO RETAIL FINANCE, LLC ,
a Delaware limited liability company, as
Agent and as Lender
By: /s/ Xxxxxx Xxxxxxx
------------------------------------------------
Name: Xxxxxx Xxxxxxx
--------------------------------------------
Title: Senior Vice President
-----------------------------------------
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