LIMITED WAIVER WITH RESPECT TO CREDIT AGREEMENT
EXHIBIT 10.2
LIMITED WAIVER WITH RESPECT TO CREDIT AGREEMENT
This LIMITED WAIVER WITH RESPECT TO CREDIT AGREEMENT (this “Waiver”) is entered into
as of this 30th day of May 2007, by NAVARRE CORPORATION, a Minnesota corporation
(“Borrower”), the Credit Parties signatory hereto, MONROE CAPITAL ADVISORS, LLC, a Delaware
limited liability company, 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 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 the
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 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. 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 XXXX Entertainment LP, a Delaware limited partnership (the “Seller”)
pursuant to the 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 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 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(d) 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(d) 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
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Sale would require that the Revolving Loan Commitment (as defined in the First Lien Credit
Agreement) be reduced.
SECTION 2. Conditions to Effectiveness. 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 each Lender; and
(b) Agent shall have received a certified copy of each of (i) the fully executed copy of a
Limited Waiver with respect to the First Lien Credit Agreement and (ii) the Purchase Agreement,
each in form and substance satisfactory to Agent.
SECTION 3. Representations and Warranties. In order to induce the Agent and each Lender to
enter into this Waiver, each Credit Party hereby represents and warrants to the Agent and each
Lender, which representations and warranties shall survive the execution and delivery of this
Waiver, that:
(a) all of the representations and warranties contained in the Credit Agreement and in each
Loan Document are true and correct as of the date hereof after giving effect to this Waiver, except
to the extent that any such representations and warranties expressly relate to an earlier date;
(b) the execution, delivery and performance by such Credit Party of this Waiver has been duly
authorized by all necessary corporate, limited liability company or partnership action required on
its part and this Waiver, and the Credit Agreement is the legal, valid and binding obligation of
such Credit Party enforceable against such Credit Party in accordance with its terms, except as its
enforceability may be affected by the effect of bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to or affecting the rights or remedies of
creditors generally;
(c) neither the execution, delivery and performance of this Waiver by such Credit Party, the
performance by such Credit Party of the Credit Agreement nor the consummation of the transactions
contemplated hereby does or shall contravene, result in a breach of, or violate (i) any provision
of any Credit Party’s certificate or articles of incorporation or bylaws or other similar
documents, or agreements, (ii) any law or regulation, or any order or decree of any court or
government instrumentality, or (iii) any indenture, mortgage, deed of trust, lease, agreement or
other instrument to which any Credit Party or any of its Subsidiaries is a party or by which any
Credit Party or any of its Subsidiaries or any of their property is bound, except in any such case
to the extent such conflict or breach has been waived herein or by a written waiver document, a
copy of which has been delivered to Agent on or before the date hereof; and
(d) no Default or Event of Default has occurred and is continuing.
SECTION 4. Reference to and Effect Upon the Credit Agreement.
(a) Except as specifically set forth above, the Credit Agreement and the other Loan Documents
shall remain in full force and effect and are hereby ratified and confirmed; and
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(b) The waivers set forth herein are effective solely for the purposes set forth herein and
shall be limited precisely as written, and shall not be deemed to (i) be a consent to any
amendment, waiver or modification of any other term or condition of the Credit Agreement or any
other Loan Document, (ii) operate as a waiver or otherwise prejudice any right, power or remedy
that the Agent or the Lenders may now have or may have in the future under or in connection with
the Credit Agreement or any other Loan Document or (iii) constitute an amendment or waiver of any
provision of the Credit Agreement or any Loan Document, except as specifically set forth herein.
Upon the effectiveness of this Waiver, each reference in the Credit Agreement to “this Agreement”,
“herein”, “hereof” and words of like import and each reference in the Credit Agreement and the Loan
Documents to the Credit Agreement shall mean the Credit Agreement as amended hereby. This Waiver
shall be construed in connection with and as part of the Credit Agreement.
SECTION 5. GOVERNING LAW. THIS WAIVER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF ILLINOIS.
SECTION 6. Headings. Section headings in this Waiver are included herein for convenience
of reference only and shall not constitute part of this Waiver for any other purposes.
SECTION 7. Counterparts. This Waiver may be executed in any number of counterparts, each
of which when so executed shall be deemed an original, but all such counterparts shall constitute
one and the same instrument.
(signature pages follow)
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Waiver as of the date
first written above.
| BORROWER: NAVARRE CORPORATION |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| AGENT: MONROE CAPITAL ADVISORS, LLC, as Agent |
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| By: | ||||
| Name: | ||||
| Title: | ||||
[Signature Page to Limited Waiver With Respect to Credit Agreement]
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IN WITNESS WHEREOF, this Waiver has been duly executed as of the date first written above by
below Persons in their capacity as Credit Parties not as Borrower.
| ENCORE SOFTWARE, INC., as Credit Party |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| BCI ECLIPSE COMPANY, LLC, as Credit Party |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| FUNIMATION PRODUCTIONS LTD., as Credit Party By: Xxxxxxx XX, LLC, its General Partner |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| ANIMEONLINE, LTD, as Credit Party By: Xxxxxxx XX, LLC, its General Partner |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| XXXXXXX XX, LLC, as Credit Party |
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| By: | ||||
| Name: | ||||
| Title: | ||||
[Signature Page to Limited Waiver With Respect to Credit Agreement]
S-2
| NAVARRE CLP, LLC, as Credit Party |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| XXXXXXX XX, LLC, as Credit Party |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| NAVARRE LOGISTICAL SERVICES, INC., as Credit Party |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| NAVARRE DIGITAL SERVICES, INC., as Credit Party |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| NAVARRE ONLINE FULFILLMENT SERVICES, INC., as Credit Party |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| NAVARRE DISTRIBUTION SERVICES, INC., as Credit Party |
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| By: | ||||
| Name: | ||||
| Title: | ||||
[Signature Page to Limited Waiver With Respect to Credit Agreement]
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| NAVARRE ENTERTAINMENT MEDIA, INC., as Credit Party |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| FUNIMATION CHANNEL, INC., as Credit Party |
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| By: | ||||
| Name: | ||||
| Title: | ||||
[Signature Page to Limited Waiver With Respect to Credit Agreement]
S-4
