EXHIBIT 10.1
FIRST AMENDMENT AND LIMITED WAIVER WITH RESPECT TO FOURTH
AMENDED AND
RESTATED CREDIT AGREEMENT
This FIRST AMENDMENT AND LIMITED
WAIVER WITH RESPECT TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
(this “ Amendment and Waiver ”) is entered into
as of this 30 th day of May,
2007, by NAVARRE CORPORATION, a Minnesota corporation (“
Borrower ”), the Credit Parties signatory hereto,
GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as
agent (the “ Agent ”) for itself and the Lenders
under and as defined in the Credit Agreement (as hereinafter
defined), and the Lenders. Unless otherwise specified herein,
capitalized terms used in this Amendment and Waiver shall have the
meanings ascribed to them by the Credit Agreement.
RECITALS
WHEREAS, the Borrower, the Credit
Parties, the Agent and the Lenders have entered into that certain
Fourth Amended and Restated Credit Agreement, dated as of
March 22, 2007 (as amended, supplemented, restated or
otherwise modified from time to time, the “ Credit
Agreement ”); and
WHEREAS, the Borrower, the Credit
Parties, the Agent and the Lenders have agreed to amend and waive
certain provisions of the Credit Agreement as herein set
forth.
NOW THEREFORE, in consideration of
the foregoing recital, mutual agreements contained herein and for
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Borrower, the Credit Parties,
the Agent, and the Lenders hereby agree as follows:
SECTION 1. Amendment . Agent and Lenders
hereby agree to amend and restate the definition of “
Minimum Excess Availability Reserve ” set forth in
Annex A to the Credit Agreement to read in its entirety as
follows:
“ Minimum Excess
Availability Reserve ” shall mean a special Reserve
maintained by Agent in an amount at all times equal to
$11,500,000.
SECTION 2. Limited Waivers .
(a) The Agent and the Lenders
hereby waive the provisions of Section 6.8 of the
Credit Agreement to the extent, and solely to the extent, necessary
to permit the sale by Borrower of all of the issued and outstanding
Stock of Navarre Entertainment (the “ Entertainment
Stock ”) owned by Borrower to KOCH Entertainment LP, a
Delaware limited partnership (the “ Seller ”)
pursuant to that certain Purchase and Sale Agreement, dated as of
May 11, 2007, by and among Borrower, Seller and Navarre
Entertainment (as amended prior to the date hereof and as in effect
as of the date hereof, the “ Purchase Agreement
”) for a purchase price equal to $6,500,000 (the “
Purchase Price ”) which shall be payable in cash at
the time of the closing thereof (the “ Entertainment Stock
Sale ”). Upon Agent’s receipt of 100% of the cash
proceeds from the Entertainment Stock Sale in an amount equal to
$6,500,000 (the “ Entertainment Sale Proceeds
”), Agent and Lenders hereby agree that all security
interests held
1
by Agent
on the date in and to the assets of Navarre Entertainment and the
Entertainment Stock shall be deemed released (and Agent hereby
agrees to prepare, execute and deliver to Borrower, at Credit
Parties’ expense, an appropriate UCC financing statement
amendment, the original copy of the stock certificate representing
the Entertainment Stock held by Agent and any other necessary
releases as soon thereafter as practicable to evidence release of
Agent’s security interests on such assets). Agent, Lenders
and Credit Parties hereby acknowledge and agree that all
Entertainment Sale Proceeds shall be paid to Agent and applied in
accordance with Section 1.3(c) of the Credit Agreement
(except as set forth in clause (b) below).
(b) The Agent and the Lenders
hereby waive the provisions of the last sentence of Section
1.3(c) of the Credit Agreement to the extent, and solely to the
extent, that such provisions would require that any prepayment
required as a result of the Entertainment Stock Sale would require
that the Revolving Loan Commitment be reduced.
SECTION 3. Conditions to Effectiveness . The
effectiveness of this Amendment and Waiver is subject to the
satisfaction of each the following conditions precedent:
(a) this Amendment and Waiver
shall have been duly exe
