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EXHIBIT 4.20
AMENDMENT TO SENIOR SUBORDINATED
NOTE PURCHASE AGREEMENT
This Amendment to Senior Subordinated Note Purchase Agreement, dated as
of December 23, 2000 (this "Amendment"), is entered into among National Record
Mart, Inc., a Delaware corporation (the "ISSUER"), NRM Investments, Inc., a
Delaware corporation (the "GUARANTOR" and, collectively with the Issuer, the
"OBLIGORS"), and The Chase Manhattan Bank (as successor in interest to Xxxxxx
Xxxxxxx Inc., the "AGENT"), in its capacity as agent for the Holders under that
certain Senior Subordinated Note Purchase Agreement dated as of April 16, 1998,
(including all annexes, exhibits and schedules thereto, the "UNSECURED NOTE
PURCHASE AGREEMENT"). Capitalized terms used and not otherwise defined herein
shall have the meaning ascribed to such terms in the Unsecured Note Purchase
Agreement.
W I T N E S S E T H:
WHEREAS, the Obligors, the Purchaser, and the Agent each have entered
into the Unsecured Note Purchase Agreement; and
WHEREAS, the Obligors are also parties to that certain Senior
Subordinated Secured Note Purchase Agreement dated as of April 16, 1998
(including all annexes, exhibits and schedules thereto, the "SECURED NOTE
PURCHASE AGREEMENT"); and
WHEREAS, the Issuer has requested that the Agent and the Holders amend
the covenant set forth in Section 7.16 of the Secured Note Purchase Agreement;
and
WHEREAS, the Obligors have indicated that they will amend a similar
covenant in the Secured Note Purchase Agreement; and
WHEREAS, the Required Holders have consented to this Amendment as
required by the Unsecured Note Purchase Agreement; and
WHEREAS, the Agent is willing to enter into this Amendment on the terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the above premises the Obligors and
the Agent, on behalf of itself and the Holders, each agrees as follows:
7. Amendments to Unsecured Note Purchase Agreement. Effective as of the
Amendment Effective Date (as defined below), the Unsecured Note Purchase
Agreement shall be amended as follows:
7.1 Section 1.01 of the Unsecured Note Purchase Agreement
shall be amended by adding the following:
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"FINANCIAL ADVISOR" means an investment banking firm or other
financial advisor selected by the Issuer and reasonably
acceptable to the Agent which shall have knowledge and
experience in the music retailing industry.
7.2 Section 7.16 of the Unsecured Note Purchase Agreement
shall be amended in its entirety to read as follows:
Issuer shall not permit its Cash Flow to be less than $250,000
for the aggregate of any fiscal quarter and the preceding
three fiscal quarters, except that with respect to the fiscal
quarter ending December 23, 2000 and the preceding three
fiscal quarters, Issuer shall not permit its Cash Flow to be
less than the amount set forth in that certain letter, dated
February 6, 2001, from the Issuer to the Agent.
7.3 Section 8.01 of the Unsecured Note Purchase Agreement shall be amended by
adding each of the following as an "Event of Default" under the Unsecured Note
Purchase Agreement:
(t) after February 6, 2001, the Issuer shall fail to continue
to engage the Financial Advisor or the Financial Advisor shall
no longer be providing services or serving as financial
advisor to the Issuer and a replacement Financial Advisor has
not been engaged or retained within ten (10) Business Days
thereafter.
(u) after February 6, 2001, the Issuer shall fail to use all
commercially reasonable efforts to promote and pursue
strategic alternatives for the Issuer as described in Section
8.01(x) hereof.
(v) beginning on February 12, 2001, the Issuer and, to the
extent available, the Issuer's advisors, including, without
limitation, the Financial Advisor, shall fail to participate
in any material respect in telephonically conducted meetings
requested by the Agent to be convened not less frequently than
twice during each calendar month on or about the first and
fifteenth day of each calendar month (or the first Business
Day thereafter), or such other date and time as (i) the Agent
may reasonably request or (ii) the Agent and the Issuer shall
agree upon request of the Issuer.
(w) the Issuer shall have failed to deliver to the Agent a
copy of any of the following, in each case in form and
substance satisfactory to the Agent in its sole discretion:
(i) as soon as available but no later than February 28, 2001,
a cash flow forecast and income statement through April 30,
2001, as prepared by the Issuer and reviewed by the Financial
Advisor, (ii) as soon as available but no later than February
28, 2001, a work plan including strategic alternatives being
considered by the Issuer, (iii)
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as and when delivered to Fleet, the monthly statements
described in Section 6.01(b) of this Agreement, (iv) promptly
but no later than five (5) Business Days after delivery to the
Board of Directors, the Board Reports described in Section
6.01(d) of this Agreement, (v) promptly but no later than five
(5) Business Days after preparation by either the Issuer or
the Financial Advisor, all business plans, operating
projections or other forward looking financial statements
(collectively "PROJECTIONS") produced or developed by or on
behalf of the Issuer after February 6, 2001, including,
without limitation, any and all material updates of
Projections whenever produced or developed, and (vi) as and
when delivered to Fleet, a copy of the borrowing base
certificate provided by the Issuer to Fleet in connection with
the Fleet Facility for the prior calendar week.
(x) subject solely to any contractual limitations with respect
to confidentiality, the Issuer shall have failed to deliver to
the Agent a copy of any of the following promptly but no later
than five (5) Business Days after receipt of same by the
Issuer or the Financial Advisor: any letter of intent, bid,
purchase offer, expression of interest, proposal, or similar
document received by the Issuer or the Financial Advisor,
concerning or regarding substantially all of the assets or
stock of the Issuer, including, the acquisition of same, or a
refinancing of the Notes; provided however, that the Issuer
shall use its reasonable best efforts to exclude from any
contractual limitations with respect to confidentiality
disclosure of any of the foregoing to the Agent.
8. Amendment Effective Date. This Amendment shall be effective as of
the date first written above (the "AMENDMENT EFFECTIVE DATE") subject to the
satisfaction of each of the following conditions precedent:
8.1 The Agent shall have received, in each case in form and
substance satisfactory to the Agent in its sole discretion, duly executed
original counterparts of this Amendment from each of the Issuer and the
Guarantor.
8.2 The Agent shall have received from the Issuer
reimbursement for all reasonable costs and expenses incurred by the Agent
through and including February 5, 2001, including, without limitation, the
reasonable fees and expenses of counsel to the Agent.
8.3 The Issuer shall have engaged the Financial Advisor on
terms reasonably acceptable to the Agent and the Issuer.
8.4 The Issuer shall have obtained from Fleet with respect to
the Fleet Facility a waiver or amendment, similar in form and substance to this
Amendment, and the Agent shall have received a fully executed copy of same.
8.5 The Issuer shall have obtained from the Holders under the
Unsecured Note Purchase Agreement an amendment with respect to the Unsecured
Note
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Purchase Agreement, similar in form and substance to this Amendment, relating
to the Cash Flow covenant in Section 7.16 of the Secured Note Purchase
Agreement as such is applied to the period ending December 23, 2000, and the
Agent shall have received a fully executed copy of same.
8.6 All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions
described in this Amendment shall be satisfactory in all respects in form and
substance to the Agent.
9. Representations and Warranties of the Obligors. The Obligors each
represent and warrant to the Agent and the Holders that, as of the Amendment
Effective Date and after giving effect to this Amendment:
9.1 All of the representations and warranties of the Issuer
and the Guarantor contained in this Amendment, the Unsecured Note Purchase
Agreement, and the other Note Documents are true and correct on and as of the
Amendment Effective Date, as if then made (other than representations and
warranties which expressly related to an earlier date and except for changes
therein expressly permitted by the Unsecured Note Purchase Agreement).
9.2 No Default or Event of Default has occurred or is
continuing or will result after giving effect to this Amendment.
9.3 The Issuer is not and will not be in breach of any
financial covenant tested as of the Amendment Effective Date or as of February
5, 2001.
9.4 Since April 16, 1998, except for information previously
publicly disclosed or disclosed in writing by the Issuer to the Agent, (i) no
event or condition has occurred or is existing which could reasonably be
expected to have a Material Adverse Effect, (ii) no litigation has been
commenced which, if successful, would have a Material Adverse Effect or could
challenge any of the transactions contemplated by the Unsecured Note Purchase
Agreement, this Amendment, or the Note Documents, and (iii) there has been no
material increase in liabilities, liquidated or contingent, and no material
decrease in assets of either the Issuer or the Guarantor.
9.5 The Obligors have received with respect to the Fleet
Facility the executed amendment or waiver referred to in section 2.4 hereof, and
such amendment or waiver is binding and in full force and effect.
9.6 The Obligors have received with respect to the Unsecured
Note Purchase Agreement the executed amendment referred to in section 2.5
hereof, and such amendment is binding and in full force and effect.
9.7 The execution and delivery of this Amendment and related
documents by the Issuer and the Guarantor, and the performance of the
transactions contemplated hereby and thereby, (a) are within each such Person's
corporate power, (b) have been duly authorized by all necessary or proper
corporate and shareholder action, and (c) do not conflict with or violate any
contract or agreement to which the Issuer or the Guarantor may be a party; this
Amendment and such documents have been duly executed and delivered by, and each
constitutes a legal, valid, and binding obligation of, the Issuer and the
Guarantor, enforceable against each in accordance with its respective terms.
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10. Reference to and Effect on the Note Documents.
10.1 Upon the Amendment Effective Date, each reference in the
Unsecured Note Purchase Agreement to "this Agreement", "hereunder", "hereof' or
words of like import, and each reference in the Note Documents to the Unsecured
Note Purchase Agreement, shall mean and be a reference to the Unsecured Note
Purchase Agreement as amended hereby.
10.2 This Amendment shall constitute a part of and be included
in the definition of Note Documents in the Unsecured Note Purchase Agreement.
10.3 This Amendment shall be limited solely to the matters
expressly set forth herein and shall not (i) constitute a waiver or amendment of
any other term or condition of the Unsecured Note Purchase Agreement or any
other Note Documents, (ii) prejudice any rights or remedies which Holders may
now have or may have in the future under or in connection with the Unsecured
Note Purchase Agreement or any other Note Documents, as amended hereby, (iii)
require the Holders to agree through the Agent or the consent of the Required
Holders to a similar amendment on a future occasion, or (iv) create any rights
herein to any other Person or other beneficiary or otherwise, except to the
extent specifically provided herein.
10.4 Except to the extent specifically consented to herein,
the respective provisions of the Unsecured Note Purchase Agreement and the other
Note Documents shall not be amended, modified, waived, impaired or otherwise
affected hereby, and such documents and the Obligations under each of them are
hereby confirmed as being in full force and effect.
11. Time of the Essence. Each of the Obligors acknowledges and agrees
that time is of the essence with respect to each and every term of this
Amendment.
12. Miscellaneous.
12.1 Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies hereof, each signed by less than all, but together signed by
all, of the parties hereto.
12.2 GOVERNING LAW. THIS AMENDMENT, AND ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE HEREOF, SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS
OF THE UNITED STATES OF AMERICA.
12.3 Payments and Transfers of Funds. All payments or other
transfers of funds to the Agent under this Amendment shall be made in the lawful
currency of the United States by wire transfer of immediately available funds to
the Agent in accordance with the wire instructions specified in Schedule A
hereto.
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IN WITNESS WHEREOF, the Issuer, the Guarantor, and the Agent have
caused this Amendment to be executed by their respective duly authorized
officers as of the date first above written.
NATIONAL RECORD MART, INC.
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
Title: Senior Vice President & CFO
NRM INVESTMENTS, INC.
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
Title: President
THE CHASE MANHATTAN BANK, SUCCESSOR
IN INTEREST TO XXXXXX XXXXXXX, INC., AS THE AGENT
By: /s/ Xxxxxxx Lancia
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Name: Xxxxxxx Lancia
Title: Vice President
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