Exhibit No. 10.1
THIRD AMENDMENT
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THIRD AMENDMENT (this "Amendment"), dated as of November 16, 1998, among
VIDEO UPDATE, INC., a Delaware corporation (the "Borrower"), the lending
institutions party to the Credit Agreement referred to below (the "Banks") and
BANQUE 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 9.01 of the Credit Agreement is hereby amended by (i)
deleting the word "and" appearing at the end of clause (x) of said Section, (ii)
redesignating clause (xi) of said Section as clause (xii) and (iii) inserting
the following new clause (xi) immediately after clause (x) of said Section:
"(xi) Liens arising pursuant to the Permitted Sale-Leaseback
Transaction, so long as such Liens do not attach to any assets of the
Borrower or any of its Subsidiaries other than those which are the
subject of the Permitted Sale-Leaseback Transaction; and".
2. Section 9.02 of the Credit Agreement is hereby amended by (i)
deleting the word "and" appearing at the end of clause (x) of said Section, (ii)
deleting the period at the end of clause (xi) of said Section and inserting the
text "; and" in lieu thereof and (iii) inserting the following new clause (xii)
at the end of the Section:
"(xii) the Borrower and its Subsidiaries may effect the Permitted
Sale-Leaseback Transaction in accordance with the definition
thereof.".
3. Section 9.05 of the Credit Agreement is amended by (i) deleting
the word "and" appearing at the end of clause (v) of said Section, (ii) deleting
the period appearing at the end of clause (vi) of said Section and inserting the
text "; and" in lieu thereof and (iii) inserting the following new clause (vii)
at the end of said Section:
"(vii) Indebtedness of the Borrower evidenced by Capitalized Lease
Obligations arising from the Permitted Sale-Leaseback Transaction, so
long as (x) the Liens arising as a result thereof are permitted
pursuant to
Section 9.01(xi) and (y) the aggregate outstanding amount
of such Indebtedness does not exceed $5,000,000.".
4. Section 11 of the Credit Agreement is amended by inserting the
following definition in appropriate alphabetical order in said Section:
"Permitted Sale-Leaseback Transaction" shall mean the sale by
Borrower and/or any of its Subsidiaries of certain equipment and other
property to a third party financial institution which is then leased
back to the Borrower or any of its Subsidiaries by such financial
institution, provided that (i) the proceeds of the sale shall be
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entirely cash and in an amount at least equal to 95% of the net book
value of, and 70% of the aggregate amount expended by the Borrower and
its Subsidiaries in acquiring, such equipment and other property, (ii)
the aggregate amount of all proceeds received by the Borrower and its
Subsidiaries from the sale of such equipment and other property shall
not exceed $5,000,000 and (iii) the documentation governing such sale-
lease-back arrangement shall be in form and substance satisfactory to
the Agent and the Required Banks.
5. Notwithstanding anything to the contrary contained in Section
4.02(A)(g) of the Credit Agreement, the Net Sale Proceeds of assets sold by the
Borrower and its Subsidiaries pursuant to the Permitted Sale Leaseback
Transaction shall not be required to be applied as provided in Section 4.02(B)
of the Credit Agreement, so long as 100% of such Net Sale Proceeds are utilized
by the Borrower for purposes previously disclosed to the Agent and the Banks.
II. Miscellaneous.
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1. In order to induce the Banks to enter into this Amendment, the
Borrower hereby (i) makes each of the representations, warranties and agreements
contained in Section 7 of the Credit Agreement and (ii) represents and warrants
that there exists no Default or Event of Default, in each case on the Third
Amendment Effective Date (as defined below), both before and after giving effect
to 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.
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 "Third
Amendment Effective Date") when the Borrower and the Banks constituting the
Required Banks shall have signed a copy hereof (whether the same or different
copies) and shall have delivered
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(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).
6. From and after the Third 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 and 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 Bellingham
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Name: Xxxxxx Bellingham
Title: Vice President
CAROLINA FIRST BANK
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Executive Vice President
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FIRST SOURCE FINANCIAL LLP
By: First Source Financial, Inc., Its
Agent/Manager
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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
PPM AMERICA, INC. as agent, on behalf of
Xxxxxxx National Life Insurance Company
By: /s/ Xxxxxxx DiRe
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Name: Xxxxxxx DiRe
Title: Managing 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
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