LIMITED WAIVER WITH RESPECT TO
THIRD AMENDED AND
RESTATED CREDIT AGREEMENT
This LIMITED
WAIVER WITH RESPECT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
(this “ Waiver ”) is entered into as of this
18 th
day of November, 2005, 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
Requisite Lenders. Unless otherwise specified herein, capitalized
terms used in this Waiver shall have the meanings ascribed to them
by the Credit Agreement.
WHEREAS, the
Borrower, the Credit Parties, the Agent and the Lenders have
entered into that certain Third Amended and Restated Credit
Agreement, dated as of June 1, 2005 (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 Requisite Lenders
have agreed to 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 Requisite Lenders hereby agree
as follows:
SECTION 1.
Limited Waiver .
Effective as of September 30, 2005, the Agent and Requisite
Lenders hereby waive (i) any breach or violation of
Section 3.4 or Section 3.16 of the Credit
Agreement and any Default or Event of Default arising solely as a
result thereof, solely to the extent arising from the fact that the
financial statements referenced in Sections 3.4(a) and
3.4(b) do not reflect expenses for deferred compensation that
should have been recognized by Borrower for the Fiscal Year ending
March 31, 2003, the Fiscal Year ending March 31, 2004 and
the Fiscal Year ending March 31, 2005 under an employment
agreement with Eric H. Paulson and separation payments made to
Charles E. Cheney, as long as the aggregate amount thereof does not
exceed $1,400,000 for all periods prior to the Fiscal Year ending
March 31, 2005 and (ii) any breach or violation of
Section 5.5 of the Credit Agreement and any Default or
Event of Default arising solely as a result thereof, solely to the
extent arising from the failure by Borrower to file its Form 10-Q
quarterly report with the Securities and Exchange Commission
(“ SEC ”) for the Fiscal Quarter ending
September 30, 2005 in compliance with the rules and
regulations of the SEC solely as a result of the lack of the
required certification of such Form 10-Q quarterly report by
Borrower’s chief financial officer and chief executive
officer, and the lack of the required quarterly review of such Form
10-Q quarterly report by Borrower’s independent registered
public accounting firm, so long as Borrower shall conclude the
filing of such Form 10-Q
quarterly
report with the SEC in compliance with the with rules and
regulations of the SEC no later than November 23, 2005
(collectively, the “ Specified Defaults
”).
SECTION 2.
Conditions The
effectiveness of this Waiver is subject to the satisfaction of each
the following conditions precedent:
(a) this
Waiver shall have been duly executed and delivered by the Borrower,
the Credit Parties, the Agent and Requisite Lenders;
(b) the
Borrower shall have paid to the Agent, for the ratable benefit of
each Lender signatory hereto, an amendment fee in an amount equal
to 0.05% of the Commitments of such Lender (which fee s
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