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EXHIBIT 10.16
SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT (this "Second Amendment") is
entered into as of January 1, 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 ▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION ("▇▇▇▇▇ Fargo") as agent for the Lenders (in
such capacity, the "Agent").
RECITALS
WHEREAS, 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").
WHEREAS, 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 that the Loan Agreement
shall be amended as follows:
1. 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 Seventy-Five Million Dollars
($75,000,000).
2. Section 1.68. The following definition of "Year 2000 Compliant" is
added to and made a part of the Loan Agreement as Section 1.68 thereto:
1.68 "Year 2000 Compliant" means, with regard to any Person, that
all software utilized by and material to the business operations
or financial condition of such entity are able to interpret and
manipulate data on and involving all calendar dates correctly and
without causing any abnormal ending scenario, including in
relation to dates in and after the year 2000.
3. Section 2.5(e). Section 2.5(e) of the Loan Agreement is amended by
deleting the reference to "one-eighth percent (.125%) as the unused line fee
rate, and by substituting for such words and figures "three-eighths percent
(.375%).
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4. Section 7.16. The following new Section 7.16 is added to and made a
part of the Loan Agreement:
7.16. Year 2000 Compliant. As of October 1, 1999, Borrower shall
be Year 2000 Compliant.
5. Conditions Precedent. The effectiveness of this Second 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 January
15, 1999:
a. 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
(i) Two (2) executed original counterparts of this
Second Amendment;
(ii) executed counterparts of the Consent and Reaffirmation of
Guarantor attached hereto in the form of Annex I; and
(iii) such additional agreements, certificates, reports,
approvals, instruments, documents, consents and/or
reaffirmation as the Agent or any Lender may reasonably
request.
b. Amendment Fee. Borrower shall have paid to the Agent, for the
benefit of the Lenders, as non-refundable, fully earned
amendment fee of $25,000.
6. 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 Second Amendment. This Second Amendment and the Loan
Agreement shall be read together, as one document.
7. 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 Second Amendment there exists no Default or Event of Default as defined
in the Loan Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to be executed as of the day and year first written above.
THE GOOD GUYS - CALIFORNIA, INC. ▇▇▇▇▇ FARGO BANK,
a California corporation NATIONAL ASSOCIATION,
as Agent and Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President and Vice President
Chief Financial Officer
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ANNEX I
CONSENT AND REAFFIRMATION OF GUARANTOR
Reference is hereby made to the foregoing Second Amendment to Loan
Agreement ("Second Amendment") dated as of January 1, 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 ▇▇▇▇▇ Fargo Bank, National Association
("▇▇▇▇▇ Fargo"), as agent for the Lenders (in such capacity, the "Agent").
In order to induce the Agent and the Lenders to enter into the Second
Amendment, the undersigned hereby consents to the execution, delivery and
performance by Borrower, the Agent and the Lenders of the Second Amendment and
all other documents, instruments and agreements now or hereafter executed in
connection therewith (collectively, together with the Second Amendment, the
"Second 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 Second 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 Second 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.
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IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby,
has caused this Consent and Reaffirmation to be executed as of January 1, 1999.
THE GOOD GUYS, INC.,
a Delaware corporation
By: /s/ Name to Come
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Title: Senior Vice President and
Chief Financial Officer
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