Exhibit No. 10.2
FOURTH AMENDMENT
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FOURTH AMENDMENT (this "Amendment"), dated as of January 21, 1999,
among VIDEO UPDATE, INC., a Delaware corporation (the "Borrower"), the lending
institutions party to the Credit Agreement referred to below (the "Banks") and
PARIBAS, as Agent (in such capacity, the "Agent"). Unless otherwise indicated,
all capitalized terms used herein and not otherwise defined shall have the
respective meanings provided such terms in the Credit Agreement referred to
below.
W I T N E S S E T H:
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WHEREAS, the Borrower, the Banks and the Agent are parties to a Credit
Agreement, dated as of March 6, 1998 (as amended, modified or supplemented to
the date hereof, the "Credit Agreement"); and
WHEREAS, subject to and on the terms and conditions set forth in this
Amendment, the parties hereto wish to amend the Credit Agreement as herein
provided;
NOW, THEREFORE, it is agreed:
I. Amendments to Credit Agreement.
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1. Section 1.08(d) of the Credit Agreement is hereby amended by (i)
deleting the text "quarterly in arrears on each Quarterly Payment Date"
appearing in said Section, (ii) inserting the text "monthly in arrears on the
last Business Day of each month" in lieu thereof, (iii) deleting the text "three
months, on each date occurring at three" and (iv) inserting the text "one month,
on each date occurring at one" in lieu thereof.
2. Section 1.09(vi) of the Credit Agreement is hereby amended by inserting
the text "in excess of one month" between the words "Period" and "may" and by
inserting the following text at the end of said Section "provided that the
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Borrower shall be permitted to select an Interest Period of six months on the
Fourth Amendment Effective Date with respect to A Term Loans and B Term Loans
maintained as Eurodollar Loans;"
3. Notwithstanding anything to the contrary contained in Section
4.02(A)(b) of the Credit Agreement, the mandatory repayment of A Term Loans
otherwise required to be made on January 31, 1999 pursuant to said Section shall
instead be required to be made on March 12, 1999, so long as at all times after
the Fourth Amendment Effective Date (as defined below) and prior to March 12,
1999 the Borrower is working in good faith and cooperating with Xxxxxx Xxxxxxxx
LLP ("Xxxxxxxx") in connection with Xxxxxxxx'x engagement to perform consulting
services with respect to the Borrower and its Subsidiaries (the "Xxxxxxxx
Engagement"), as determined by the Agent in its sole discretion.
4. Notwithstanding anything to the contrary contained in Section
4.02(A)(c) of the Credit Agreement, the mandatory repayment of B Term Loans
otherwise required to be made on January 31, 1999 pursuant to said Section shall
instead be required to be made on March 12, 1999, so long as at all times after
the Fourth Amendment Effective Date and prior to March 12, 1999 the Borrower is
working in good faith and cooperating with Xxxxxxxx in connection with the
Xxxxxxxx Engagement.
5. Section 8 of the Credit Agreement is hereby amended by inserting the
following new Section 8.21 at the end of said Section:
"8.21 Engagement of Investment Banking Advisor. The
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Borrower shall have engaged an investment banking advisor acceptable
to the Agent and the Required Banks to evaluate the Borrower's options
for raising additional capital and shall have received advice and
evaluations from such investment banking advisor in scope, form and
substance acceptable to the Agent and the Required Banks on or prior
to March 12, 1999."
6. Section 7 of the Credit Agreement is hereby amended by inserting
the following new Section 7.30 at the end of said Section:
"7.30 Updated Schedules to Credit Documents. The updated
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schedules to the Credit Documents delivered pursuant to Section 5(ii) of
Part II of the Fourth Amendment are true and correct in all material
respects as of the Fourth Amendment Effective Date and accurately
present in all material respects all information which was originally
required to be scheduled pursuant to the relevant Credit Document on the
Initial Borrowing Date, but modified to reflect the addition of any
Credit Parties, and any changes thereto which occurred, after the
Initial Borrowing Date and on or prior to the Fourth Amendment Effective
Date."
7. Section 11.01 of the Credit Agreement is hereby amended by (i) deleting
the definition of "Applicable Margin" appearing in Section 11.01 of the Credit
Agreement and (ii) inserting the following new definitions in said Section in
appropriate alphabetical order:
"Applicable Margin" shall mean the percentage per annum equal to (I) at
any time prior to the Initial Compliance Date, (i) in the case of Revolving
Loans, Capital Expenditure Loans and A Term Loans maintained as (x)
Eurodollar Loans, 4.25% and (y) Base Rate Loans, 3.25%, (ii) in the case of
B Term Loans maintained as (x) Eurodollar Loans, 4.50% and (y) Base Rate
Loans, 3.50% and (iii) in the case of Swingline Loans, 3.25% and (II)
thereafter, (i) in the case of Revolving Loans, Capital Expenditure Loans
and A Term Loans maintained as (x) Eurodollar Loans, 3.75% and (y) Base
Rate Loans, 2.75%, (ii) in the case of B Term Loans maintained as (x)
Eurodollar Loans, 4.00% and (y) Base Rate Loans, 3.00% and (iii) in the
case of Swingline Loans, 2.75%.
"Fourth Amendment" shall mean the Fourth Amendment to the Agreement,
dated as of January 21, 1999.
"Fourth Amendment Effective Date" shall have the meaning provided in
the Fourth Amendment.
8. Notwithstanding anything to the contrary contained in Section 13.01 of
the Credit Agreement, the Borrower hereby agrees to pay all fees, costs,
expenses and other amounts owing to Xxxxxxxx in connection with the Xxxxxxxx
Engagement not paid by Paribas under the terms of the definitive engagement
letter to be entered into in connection with the Xxxxxxxx Engagement in form and
substance mutually acceptable to the Borrower and the Banks (the "Engagement
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Letter") and to indemnify the Banks and the other Indemnitees (other than
Paribas to the extent expressly provided in the Engagement Letter) for any and
all liabilities, obligations, costs, expenses and disbursements of any kind or
nature that may at any time be incurred by, imposed on or assessed against the
Banks or such other Indemnitees with respect to or resulting from the Xxxxxxxx
Engagement.
9. Each of the Credit Parties, on its own behalf and on behalf of its
successors and assigns, hereby waives, releases and discharges the Agent and
each Bank and all of the affiliates of the Agent and each Bank, and all of the
directors, officers, employees, attorneys and agents of the Agent and each Bank,
from any and all claims, demands, actions or causes of action (known and
unknown) arising out of or in any way relating to the Credit Documents and any
documents, agreements, dealings or other matters connected with the Credit
Documents, in each case to the extent arising (x) on or prior to the Fourth
Amendment Effective Date or (y) out of, or relating to, actions, dealings or
matters occurring on or prior to the Fourth Amendment Effective Date. The
waivers, releases, and discharges in this Section 9 shall be effective
regardless of whether the conditions to this Amendment are satisfied and
regardless of any other event that may occur or not occur after the Fourth
Amendment Effective Date.
II. Miscellaneous.
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1. In order to induce the Banks to enter into this Amendment, the Borrower
hereby makes each of the representations, warranties and agreements contained in
Section 7 of the Credit Agreement, in each case on the Fourth Amendment
Effective Date, both before and after giving effect to this Amendment, subject
to the acknowledgment set forth in the second sentence of Section 2 of Part II
of this Amendment.
2. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Credit Document. In connection with the foregoing, the
Borrower acknowledges and agrees that an Event of Default under Section 10.03(i)
of the Credit Agreement is in existence as a result of its failure to comply
with one or more of the financial covenants contained in the Credit Agreement,
both before and after giving effect to this Amendment, and nothing contained in
this Amendment shall be construed as a waiver of such Event of Default.
3. This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which counterparts
when executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument. A complete set of counterparts
shall be lodged with the Borrower and the Agent.
4. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
NEW YORK.
5. This Amendment shall become effective on the date (the "Fourth
Amendment Effective Date") when (i) the Borrower, the Banks constituting the
Required Banks, each Bank with outstanding A Term Loans and each Bank with
outstanding B Term Loans shall have signed a copy hereof (whether the same or
different copies) and shall have delivered (including by way of facsimile
transmission) the same to White & Case LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, XX 00000 Attention: Xxxxx Xxxxxx (facsimile number 212-354-8113) and (ii)
the Borrower shall have delivered updated Schedules III, VIII, X and XV to the
Credit Agreement, Annexes A, B, C, D, E, F and G to the U.S. Security Agreement,
Schedules A, B, C
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and D to each Canadian Security Agreement, Annexes A and B to
the U.S. Pledge Agreement and Schedule A to the Canadian Pledge Agreement, in
each case modified to reflect the addition of any Credit Parties, and any
changes thereto which occurred , after the Initial Borrowing Date and on or
prior to the Fourth Amendment Effective Date.
6. By executing and delivering a copy hereof, each Credit Party hereby
agrees that all Loans shall be (and are) fully guaranteed pursuant to the
Subsidiaries Guaranty in accordance with the terms and provisions thereof and
shall be (and are) fully secured pursuant to the Security Documents.
7. From and after the Fourth Amendment Effective Date, all references to
the Credit Amendment in the Credit Agreement and the other Credit Documents
shall be deemed to be references to the Credit Agreement as modified hereby.
* * *
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Amendment to be duly executed and delivered as of the date first above
written.
VIDEO UPDATE, INC.
By: /s/Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Chairman & CEO
BANQUE PARIBAS,
Individually and as Agent
By: /s/Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Managing Director
By: /s/Xxxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Director
CAROLINA FIRST BANK
By: /s/Xxxxxxx X. Xxxxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Executive Vice President
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BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: Senior Associate
By: /s/ Xxxxx Xxxx
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Name: Xxxxx Xxxx
Title: Vice President
FIRST SOURCE FINANCIAL LLP
By: First Source Fiancial, Inc., its Agent
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
FLEET NATIONAL BANK
By: /s/ Xxxxxxx X. X'Xxxxx
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Name: Xxxxxxx X. X'Xxxxx
Title: Senior Vice President
XXXXXXX XXXXX SENIOR FLOATING
RATE FUND, INC.
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Authorized Signatory
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PPM AMERICA, INC., as attorneys-in fact, on
behalf of Xxxxxxx National Life Insurance
Company
By: /s/ Xxxxxxx DiRe
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Name: Xxxxxxx DiRe
Title: Managing Director
BOEING CAPITAL CORPORATION
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Special Credits Officer
KEY CORPORATE CAPIRAL, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Designated Signer
PARIBAS CAPITAL FUNDING LLC
By: /s/ X.X. Xxxxxxxxx
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Name: X.X. Xxxxxxxxx
Title: Director
THE BANK OF NOVA SCOTIA
By: /s/ F.C.H. Xxxxx
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Name: F.C.H. Xxxxx
Title: Senior Manager Loan Operations
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ML CLO XIX STERLING (CAYMEN) LTD.
By: Sterling Asset Manager, as its Investment
Advisor
By: /s/Xxxxx X. Pistecchia
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Name: Xxxxx X. Pistecchia
Title: Executive Vice President
KZH STERLING LLC
By: /s/ Xxxxxxxx Xxxxxx
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Name: Xxxxxxxx Xxxxxx
Title: Authorized Agent
Each of the undersigned, each being a Subsidiary Guarantor under, and
as defined in, the Credit Agreement referenced in the foregoing Fourth
Amendment, hereby consents to the entering into of the Fourth Amendment, and
agrees to the provisions thereof (including without limitation, Sections 6 and 7
of Part II thereof).
MOOVIES, INC.
By: /s/Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
TINSELTOWN VIDEO, INC.
By: /s/Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
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XXXXXXXX VIDEO, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
MOOVIES OF THE CAROLINAS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
MOOVIES OF GEORGIA, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
MOOVIES OF IOWA, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
MOOVIES OF MICHIGAN, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
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MOVIE WAREHOUSE FRANCHISE SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
E.C.6., INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
SONI, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
PQ3, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
SNO, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
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GBO, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
D-XXXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
DCO, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
PTO, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
THE MOVIE STORE, INC. #2
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
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THE MOVIE STORE III, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
ALPHARETTA MEDIA ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
VIDEO UPDATE CANADA INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
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24 HOUR ENTERTAINMENT GROUP LTD.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
24 HOUR ENTERTAINMENT LEASING LTD.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
1137239 ONTARIO LIMITED
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
RIO MEDIA ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
PIC-A-FLICK OF GREENVILLE, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
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