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SECOND AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT    
  

        This SECOND AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (the
"Amendment") is made and entered into on this 7th day of March, 2002, to be effective as of December 31, 2001 (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"), WELLS FARGO RETAIL
FINANCE, LLC, a Delaware limited liability company ("WFRF"), as the arranger and administrative agent (WFRF, in such capacity,
the "Agent"), WFRF as a Lender and PNC BANK, NATIONAL
ASSOCIATION("PNC"), as a Lender (WFRF and PNC, in their respective capacity as a Lender, being hereinafter collectively referred
to as the "Lenders"). 

 
 

PRELIMINARY STATEMENTS:    
  

        1.    Borrowers,
Agent and WFRF as a Lender entered into that certain Second Amended and Restated Loan and Security Agreement, dated as of September 28, 2001, as amended
by that certain First Amendment to Second Amended and Restated Loan and Security Agreement, dated December 12, 2001, executed by Borrowers, Agent and WFRF as a Lender (as amended from time to
time, the "Agreement"). 

        2.    WFRF
and PNC are the present Lenders under the Agreement. 

        3.    Borrowers,
Agent and Lenders desire to further 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 Lenders 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. 

        2.    Amendments. 

        (a)  Effective
as of the Effective Date, Section 7.22 of the Agreement is amended by deleting the reference to the
dollar amount "$45,000,000" and substituting therefor the dollar amount "$48,000,000." 

        3.    Conditions. The obligation of Agent and Lenders 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
Lenders. 

        (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. Nothing contained herein shall be construed as a waiver by Agent or Lenders 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 Lenders, and the failure of Agent or Lenders 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 Lenders to thereafter demand strict compliance therewith. Each of Agent
and the Lenders hereby reserves all rights granted under the Agreement, the other Loan Documents, this Amendment and any other contract or instrument between Borrowers and Agent or Lenders. 

        5.    Representations and Warranties. Each Borrower hereby represents and warrants to Agent and Lenders 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 Agreement, as amended hereby, has occurred and is continuing, unless such Default or Event of Default has been specifically waived in writing by Lenders; 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 Lenders 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. 

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        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 LENDERS. EACH BORROWER HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES AGENT AND LENDERS, AND THEIR RESPECTIVE PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS 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
LENDERS, OR THEIR RESPECTIVE 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. 

[Remainder
of this page intentionally left blank.] 

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        EXECUTED
to be effective as of the Effective Date. 

	

 	
 	
BORROWERS:
	

 	
 	

ULTIMATE ELECTRONICS, INC.,
 a Delaware corporation
	

 	
 	

By:	

/s/  ALAN E. KESSOCK      
 Alan E. Kessock, Senior Vice President
	

 	
 	
ULTIMATE INTANGIBLES CORP.,
 a Colorado corporation
	

 	
 	

By:	

/s/  JOHN BAUER-MARTINEZ      
 John Bauer-Martinez, President
	

 	
 	
ULTIMATE LEASING CORP.,
 a Colorado corporation
	

 	
 	

By:	

/s/  JOHN BAUER-MARTINEZ      
 John Bauer-Martinez, President
	

 	
 	
FAST TRAK, INC.,
 a Minnesota corporation
	

 	
 	

By:	

/s/  ALAN E. KESSOCK      
 Alan E. Kessock, Secretary
	

 	
 	
ULTIMATE ELECTRONICS PARTNERS CORP.,
 a Colorado corporation
	

 	
 	

By:	

/s/  JOHN BAUER-MARTINEZ      
 John Bauer-Martinez, President
	

 	
 	
ULTIMATE ELECTRONICS LEASING LP,
 a Texas limited partnership
	

 	
 	

By:	

Ultimate Leasing Corp., its General Partner
	

 	
 	

 	

By:	

/s/  JOHN BAUER-MARTINEZ      
 John Bauer-Martinez, President
	

 	
 	
ULTIMATE ELECTRONICS TEXAS LP,
 a Texas limited partnership
	

 	
 	

By:	

Ultimate Electronics, Inc., its General Partner
	

 	
 	

 	

By:	

/s/  ALAN E. KESSOCK      
 Alan E. Kessock, Senior Vice President

	

 	
 	
AGENT:
	

 	
 	

WELLS FARGO RETAIL FINANCE, LLC,
 a Delaware limited liability company, as Agent
	

 	
 	

By:	

/s/  ROBERT CASTINE      

	 	 	Name:	Robert Castine

	 	 	Title:	Senior Vice President

	

 	
 	
LENDERS:
	

 	
 	

WELLS FARGO RETAIL FINANCE, LLC,
 a Delaware limited liability company, as Lender
	

 	
 	

By:	

/s/  ROBERT CASTINE      

	 	 	Name:	Robert Castine

	 	 	Title:	Senior Vice President

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PNC BANK, NATIONAL ASSOCIATION,
 as Lender
	

 	
 	

By:	

/s/  ILENE SILBERMAN      

	 	 	Name:	Ilene Silberman

	 	 	Title:	Vice President

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SECOND AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

PRELIMINARY STATEMENTS

AGREEMENTSQuickLinks
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FORM OF
  CONFIDENTIALITY AGREEMENT    
  

        THIS AGREEMENT is entered into this            day
of                        , 200    , by and between Ultimate Electronics, Inc., a Delaware
corporation ("Ultimate"), and                        ("Employee"). 

RECITALS  

        WHEREAS, Ultimate and its affiliates (collectively referred to herein as the "Company") are engaged in the business of operating specialty retail stores selling
consumer electronics and home entertainment systems. 

        WHEREAS,
The Company (directly or through an affiliate) has employed the Employee to perform services for it and the Employee has accepted said employment. 

        WHEREAS,
The Company owns certain trade secrets and has conceived, created, developed and acquired confidential information in connection with its business, which trade secrets and
confidential information are valuable assets of the Company. As a consequence of his or her employment, confidential information and trade secrets of the Company have been or will be disclosed to the
Employee or are or will be known by the Employee. 

        WHEREAS,
Employee acknowledges the Company's right and need to prevent the disclosure of its trade secrets and confidential information. 

        WHEREAS,
Employee acknowledges that in connection with the duties assigned to him or her, Employee will influence and contribute to the success of the Company's Business. 

        NOW
THEREFORE BE IT RESOLVED THAT, In consideration of the premises and covenants herein contained and for good and valuable consideration, including but not limited to initial or
continued employment and a lump-sum payment of fifty dollars ($50), the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 

AGREEMENT  

        1.    Confidential Information.    For purposes of this Agreement, "Confidential Information" means (i) any and
all knowledge, data, or information disclosed to the Employee or known by the Employee as a consequence of his or her employment by the Company (including any and all knowledge, data, or information
conceived, created, discovered, developed or reduced to practice by him or her), not generally known in the industry in which the Company is or may be engaged, that relates to the Company, its
business, its development of intellectual property, and its operations, and (ii) any and all confidential or proprietary information from third parties received subject to a duty on the
Company's part to maintain and, in some cases, to use it only for certain limited purposes. 

        By
way of illustration but not limitation, "Confidential Information" includes business concepts, operating techniques, marketing methods, financial information, demographic and trade
area information, prospective site locations, customer profiles or preferences, trade secrets, trade dress, processes, software programs, know-how, improvements, discoveries, developments,
designs, techniques, procedures, methods, machinery, devices, drawings, specifications, research, marketing plans, strategies, forecasts, new products, unpublished financial statements, budgets,
projections, licenses, prices, costs, and customer and supplier lists. Confidential Information shall not include: (x) information known to the Employee prior to his or her employment by the
Company and not obtained or derived directly from the Company; (y) information that is or becomes available to the general public other than through acts or omissions attributable to the
Employee; or (z) information obtained from a third party who is lawfully in possession of the same and who is not subject to a confidentiality or nonuse obligation owed to the Company or others
with respect to that information. 

        For
purposes of this Agreement, specific information disclosed shall not be deemed to be within the foregoing exceptions merely because it is embraced by general information in the
public domain. 

 

        2.    Nondisclosure of Confidential Information.    

        (a)  The
Employee acknowledges and agrees that all Confidential Information as now exists, or which shall subsequently be developed is, and shall remain, the exclusive
property of the Company, and that the Employee shall not acquire any rights whatsoever in such Confidential Information. 

        (b)  The
Employee agrees that, except as required by the performance of his or her duties for the Company, he or she will not, during his or her employment with the Company
or at any time following the termination of such employment, directly or indirectly, use, disseminate, disclose, or make accessible all or any portion of such Confidential Information to any person,
firm, corporation, association or other entity without written authorization from an officer of the Company. 

        (c)  The
Employee shall secure any documents, items of work in process, work products, and any other items in his or her possession or under his or her control that embody
Confidential Information in locked files or areas providing restricted access to prevent its unauthorized disclosure. 

        (d)  The
Employee shall not copy, in whole or in part, any of such Confidential Information, including software materials or other electronic storage media containing or
embodying Confidential Information, except as required by the performance of his or her duties for the Company. 

        (e)  The
Employee shall immediately notify the Company of any loss or misplacement of Confidential Information or of any unauthorized disclosure or use of Confidential
Information. 

        3.    Property of the Company.    All books, documents, lists and records pertaining to the Company's business and
pertaining to the Intellectual Property (collectively, the "Records"), whether the Records are written, typed, printed, contained on microfilm,
contained on computer disc, contained in tape or are set forth in some other medium of expression, are the sole and exclusive property of the Company. Upon the termination of Employee's employment
with the Company, Employee promptly shall return to the Company all Records and copies thereof that are in Employee's possession or that Employee has removed from the Company's premises. 

        4.    No Conflict with Prior Employment.    The Employee represents and warrants that this Agreement does not
conflict, and the Employee's performance hereunder will not conflict, with any obligations he or she presently has with any person, entity, business organization, or former employer. The Employee will
notify the Company in writing before performing or causing to be performed any work for or on behalf of the Company which appears to be in conflict (a) with rights claimed by the Employee in
any ideas conceived by him or her prior to his or her employment with the Company, (b) with the rights of others arising out of obligations of the Employee incurred prior to entering into this
Agreement or (c) with the Employee's obligations to the Company under this Agreement. If the Employee fails to give notice of
such conflict, the Company may conclude that no such conflict exists and the Employee agrees to make no claim against the Company with respect to the use of any such idea by the Company. 

        5.    Covenant Not to Compete.    

        (a)  As
used in Sections 5 and 6, "Company" shall refer to Ultimate Electronics, Inc. and any affiliate, subsidiary or successor thereof. Employee agrees that during
the Employment Term and for a period of one year after the termination of his employment with the Company, he will not, without the prior written consent of the Chief Executive Officer or the
President of Ultimate Electronics, Inc., either individually, or in partnership or jointly or in conjunction with any person, firm, corporation or any other entity as principal, agent, employee
or shareholder or in any other 

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manner whatsoever (i) become associated with, accept employment with, serve as a consultant to, or accept compensation from, any person, firm or corporation (including any new business started
by Employee alone or with others) whose products and/or services comprising fifteen percent (15%) or more of its sales compete with those products and/or services offered by the Company,
(ii) contact or solicit any employee, independent contractor, customer or vendor of the Company or attempt to induce that person or entity to terminate existing business relationships, or
(iii) willfully make any public statement or willfully perform or do any other act prejudicial or injurious to the reputation or goodwill, or otherwise interfere with the business of, the
Company or their affiliates. 

        (b)  Employee
and the Company acknowledge that by virtue of their experience, access to information or other opportunity made available to Employee through the course of
Employee's relationship with the Company and its business, Employee and the Company have acquired extensive skill and information specifically suited to immediate application by a business in
competition with the Company. Accordingly, Employee and the Company consider the foregoing restrictions of future employment or business activities in all respects reasonable. Optionee further
acknowledges that the market area for each of the Company's retail stores encompasses approximately a one hundred and twenty (120) mile radius and that the location of a competing store or
business within that radius is likely to result in dilution of the Company's customer base. In addition, the Optionee acknowledges that he or she may have knowledge of additional markets identified by
the Board of Directors for future retail store locations. For these reasons and others, Optionee agrees that a one (1) year time restriction under the terms set forth in this agreement is
reasonable. The Optionee further agrees that a one hundred and twenty (120) mile radius from any of the Company's retail stores, and such other locations identified by the Board of Directors
and known to the Optionee, under the terms set forth in this agreement is a reasonable geographic restriction. 

        (c)    Remedies.    

        (i)    If
Employee breaches the terms of the non-competition clause set forth in this Section 5, then the Company shall have the right to repurchase any or
all Shares purchased by the Employee upon the exercise of Options within the twelve-month period immediately preceding the breach at the Option
Price, or, if the Employee no longer holds such shares, the Company shall have the right to receive from the Optionee payment of that amount per share equal to the sale price minus the Option Price.
Nothing contained in this Section 5(c)(i) shall be construed as prohibiting the Company from pursuing any other remedies available to it, including the recovery of damages from the
Employee, in the event of a breach. 

        (ii)  The
Employee acknowledges that a breach by him or her of the provisions of this Agreement will cause the Company irreparable injury for which the Company cannot be
reasonably or adequately compensated in money damages. The Company shall, therefore, be entitled, in addition to all other remedies available to it, to injunctive and/or other equitable relief to
prevent a breach of this Agreement, or any part of it, and to secure its enforcement. Nothing contained in this Section 5(c)(ii) shall be construed as prohibiting the Company from
pursuing any other remedies available to it, including the recovery of damages from the Employee, in the event of a breach. 

        6.    Employment.    Nothing in this Agreement shall confer any right with respect to the continuation of the
Employee's employment with the Company, nor shall this Agreement alter in any way either the Employee's or the Company's right to terminate the employment relationship at any time, with or without
cause. 

3

 

        7.    Survival.    The provisions of this Agreement shall survive (a) the termination of the Employee's
employment with the Company and (b) the assignment of this Agreement by the Company to any successor in interest or other assignee. 

        8.    Amendments and Waivers.    This Agreement embodies the entire Agreement of the parties respecting the matters
within its scope and supersedes all previous agreements, if any, oral or written. The provisions of this Agreement may be amended, terminated, superseded, or waived only by an agreement in writing
signed by the Company and the Employee. A waiver of a breach of any provision of this Agreement by a party shall not operate or be construed as a waiver by that party of any subsequent breach. 

        9.    Severability of Provisions.    If any of the terms or provisions of this Agreement are determined to be invalid,
such invalid term or provision shall not affect or impair the remainder of the Agreement, but such remainder shall continue in full force and effect to the same extent as though the invalid term or
provision were not contained in the Agreement. If, moreover, any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration,
geographical scope, activity or subject matter, such provision(s) shall be construed by limiting and reducing such provision(s) in order to render such provision(s) enforceable to the extent
compatible with the applicable law as it shall then appear. 

        10.    Attorneys' Fees.    In the event either party finds it necessary to employ legal counsel or to bring an action
at law or other proceeding against the other party to enforce any of the terms, covenants, or conditions of this Agreement, the party prevailing in any such action or other proceeding shall be paid
all reasonable attorneys' fees by the other party, and in the event any judgment is secured by such prevailing party, all such attorneys' fees, as determined by the court and not by jury, shall be
included in any such judgment. 

        11.    Successors and Assigns.    The Employee's obligations under this Agreement with regard to confidentiality, as
set forth in Section 2, shall be binding upon the Employee's heirs, executors, administrators, and legal representatives, and the rights of the Company under this Agreement shall inure to the
benefit of its successors and assigns. 

        12.    Descriptive Headings.    Descriptive headings of the several Sections of this Agreement are inserted for
convenience of reference only and do not constitute part of the Agreement. 

        13.    Effective Date.    The provisions of this Agreement shall be applicable commencing with the earlier of
(a) date of the Employee's employment with the Company or (b) the date of the Employee's execution of this Agreement. 

        14.    Governing Law.    This Agreement shall be construed under and governed by the laws of the State of Colorado.
Jurisdiction and venue shall be in the federal or state courts of Colorado. 

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        IN WITNESS WHEREOF, the parties have executed this Confidentiality Agreement as of the date first set forth above. 

	EMPLOYEE:	 	COMPANY:
	 	 	ULTIMATE ELECTRONICS, INC.,

a Delaware corporation
	

 	
 	

By:	
 	

 
	
	 	 	 	

	Address:	 	 	 	Name:
	Telephone:	 	 	 	Title:

5

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FORM OF CONFIDENTIALITY AGREEMENT

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