SECOND AMENDMENT TO REVOLVING CREDIT AND GUARANTY AGREEMENT
SECOND AMENDMENT, dated as of July 25, 1997 (the "Amendment"), to the
REVOLVING CREDIT AND GUARANTY AGREEMENT dated as of July 17, 1997 among ALLIANCE
ENTERTAINMENT CORP., a Delaware corporation (the "Borrower"), as a debtor and
debtor-in-possession under Chapter 11 of the Bankruptcy Code, the Guarantors
named therein (the "Guarantors"), as debtors and debtors-in-possession under
Chapter 11 of the Bankruptcy Code, THE CHASE MANHATTAN BANK, a New York banking
corporation ("Chase"), each of the other financial institutions party thereto
(together with Chase, the "Banks") and THE CHASE MANHATTAN BANK, as
administrative and collateral agent for the Banks (in such capacity, the
"Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantors, Chase and the Agent are parties to
that certain Revolving Credit and Guaranty Agreement, dated as of July 17, 1996,
as amended by that certain Letter Agreement, dated July 23, 1997 (and as the
same may be further amended, modified or supplemented from time to time, the
"Credit Agreement"); and
WHEREAS, Section 10.3(b) of the Credit Agreement provides that each Bank
may assign to one or more Eligible Assignees all or a portion of its interests,
rights and obligations under the Credit Agreement (including, without
limitation, all or a portion of its Commitment and the same portion of the
related Loans at the time owing to it) by executing and delivering with such
Eligible Assignee an Assignment and Acceptance in substantially the form of
Exhibit D to the Credit Agreement (a copy of which is annexed hereto as Schedule
I); and
WHEREAS, Chase wishes to assign to each of the financial institutions
(other than Chase) that is named on Annex A hereto (such financial institutions
other than Chase, collectively the "New Banks"), and each of the New Banks
wishes to assume, a pro rata portion of Chase's interests, rights and
obligations under the Credit Agreement; and
WHEREAS, the Borrower, the Guarantors, Chase, the New Banks and the Agent
have determined that the execution and delivery of this Amendment to effectuate
a reallocation of the Total Commitment among Chase and the New Banks will be
more expeditious and administratively efficient than the execution and delivery
of a separate Assignment and Acceptance between Chase and each of the New Banks;
and
WHEREAS, upon the occurrence of the Effective Date (as hereinafter defined)
of this Amendment, each of the New Banks shall become a party to the Credit
Agreement as a Bank and shall have the rights and obligations of a Bank
thereunder and the respective Commitment of Chase and each of the New Banks
under the Credit Agreement shall be in the amount set forth opposite its name on
Annex A hereto, as the same may be reduced from time to time pursuant to Section
2.10 of the Credit Agreement;
NOW, THEREFORE, it is agreed:
1. As used herein all terms that are defined in the Credit Agreement shall
have the same meanings herein.
2. Section 6.12 of the Credit Agreement is hereby amended by deleting the
words "in the exercise of its sole discretion" set forth in the last sentence of
the first paragraph thereof and inserting in lieu thereof the words ", such
consent not to be unreasonably withheld".
3. Annex A to the Credit Agreement is hereby replaced in its entirety by
Annex A hereto.
4. The signature pages of the Credit Agreement are hereby amended to
conform to the signature pages hereto.
5. By its execution and delivery hereof, Chase shall be deemed to have made
each of the statements set forth in clauses (i) and (ii) of paragraph 2 of the
Assignment and Acceptance as if such statements were fully set forth herein at
length.
6. By its execution and delivery hereof, each of the New Banks shall be
deemed to have made each of the statements set forth in clauses (i), (ii),
(iii), (iv) and (v) of paragraph 3 of the Assignment and Acceptance as if such
statements were fully set forth herein at length.
7. On the Effective Date, (i) each New Bank will pay to the Agent (for the
account of Chase) such amount as represents such New Bank's pro rata portion of
the aggregate principal amount of the Loans, if any, that are outstanding on the
Effective Date and such New Bank's pro rata portion of the aggregate amount of
the then unreimbursed drafts, if any, that were theretofore drawn under Letters
of Credit, and (ii) the Agent shall pay to each of the New Banks such fees as
have been previously agreed to between the Agent and such New Bank.
8. By its execution and delivery hereof, each of the New Banks (i) agrees
that any interest, Commitment Fees and Letter of Credit Fees (pursuant to
Sections 2.8, 2.20 and 2.21 of the Credit Agreement) that accrued prior to the
Effective Date shall not be payable to such New Bank and authorizes and directs
the Agent to deduct such amounts from any interest, Commitment Fees or Letter of
Credit Fees paid after the date hereof and to pay such amounts to Chase (it
being understood that interest, Commitment Fees and Letter of Credit Fees
respecting the Commitment of Chase and each New Bank which accrue on or after
the Effective Date shall be payable to such Bank in accordance with its
Commitment), (ii) acknowledges that if such New Bank is organized under the laws
of a jurisdiction outside of the United States, such New Bank has heretofore
furnished to the Agent the forms prescribed by the Internal Revenue Service of
the United States certifying as to such New Bank's exemption from United States
withholding taxes with respect to any payments to be made to such New Bank under
the Credit Agreement (or such other documents as are necessary to indicate that
all such payments are subject to such tax at a rate reduced by an applicable tax
treaty) and (iii) acknowledges that such New Bank has heretofore supplied to the
Agent the information requested on the administrative questionnaire which is
attached to the Assignment and Acceptance as Exhibit A.
9. This Amendment shall not become effective (the "Effective
Date") until (i) the date on which this Amendment shall have been executed by
the Borrower, the Guarantors, Chase, the New Banks and the Agent, and the Agent
shall have received evidence satisfactory to it of such execution and (ii) the
payments provided for in clauses (i) and (ii) of paragraph 6 hereof shall have
been made.
10. The Borrower agrees that its obligations set forth in
Section 10.5 of the Credit Agreement shall extend to the preparation, execution
and delivery of this Amendment.
11. This Amendment shall be limited precisely as written and
shall not be deemed (a) to be a consent granted pursuant to, or a waiver or
modification of, any other term or condition of the Credit Agreement or any of
the instruments or agreements referred to therein or (b) to prejudice any right
or rights which the Agent or the Banks may now have or have in the future under
or in connection with the Credit Agreement or any of the instruments or
agreements referred to therein. Whenever the Credit Agreement is referred to in
the Credit Agreement or any of the instruments, agreements or other documents or
papers executed or delivered in connection therewith, such reference shall be
deemed to mean the Credit Agreement as modified by this Amendment.
12. This Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which taken together shall constitute but one and the same instrument.
13. This Amendment shall in all respects be construed in
accordance with and governed by the laws of the State of New York applicable to
contracts made and to be performed wholly within such State.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the day and the year first above written.
ALLIANCE ENTERTAINMENT CORP.
By:
-----------------------------
Title:
GUARANTORS:
CONCORD RECORDS, INC.
INDEPENDENT NATIONAL DISTRIBUTORS, INC.
AEC ONE STOP GROUP, INC.
PASSPORT MUSIC DISTRIBUTION, INC.
FL ACQUISITION CORP.
ALLIANCE VENTURES, INC.
EXECUSOFT, INC.
AEC ACQUISITION CORP.
CASTLE COMMUNICATIONS (U.S.), INC.
PASSPORT MUSIC WORLDWIDE, INC.
AEC AMERICAS, INC.
AE LAND CORP.
ONE WAY RECORDS, INC.
MATRIX SOFTWARE, INC.
By:
-----------------------------
Title:
RED ANT BOX, INC.
RED ANT HOLDINGS, INC.
BLACK ANT MUSIC, INC.
ARMY ANT MUSIC, INC.
VELVET ANT MUSIC, INC.
By:
----------------------------
Title:
RED ANT LLC
By:
---------------------------
Red Ant Box, Inc., its managing member
By:
-----------------------------
Title:
THE CHASE MANHATTAN BANK,
Individually and as Agent
By:
-----------------------------
Title:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxx
NEW BANKS:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By:
-----------------------------
Title:
000 Xxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxx
THE FIRST NATIONAL BANK OF CHICAGO
By:
-----------------------------
Title:
Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxx
CARGILL FINANCIAL SERVICES CORP.
By:
-----------------------------
Title:
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxx Xxxxx
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX,
INCORPORATED
By:
-----------------------------
Title:
000 Xxxxx Xxxxxx, 0xx Xxxxx
World Financial Center. Xxxxx Xxxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxxx
FIRST SOURCE FINANCIAL, LLP
By:
-----------------------------
Title:
c/o First Source Financial
0000 Xxxx Xxxx Xxxx, 0xx Xxxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxx
NATIONAL BANK OF CANADA
By:
-----------------------------
Title:
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxx
ANNEX A TO
SECOND AMENDMENT
ANNEX A
to
REVOLVING CREDIT AND GUARANTY AGREEMENT
Dated as of July 17, 1996, as amended
Commitment Commitment
Bank Amount Percentage
The Chase Manhattan Bank $12,375,000 24.75%
Bank of America National Trust $12,125,000 24.25%
and Savings Association
The First National Bank of Chicago $ 7,500,000 15.00%
Cargill Financial Services Corp. $ 7,250,000 14.50%
Xxxxxxx Lynch, Pierce, Xxxxxx & $ 4,000,000 8.00%
Xxxxx Incorporated
National Bank of Canada $ 3,750,000 7.50%
First Source Financial LLP $ 3,000,000 6.00%
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Total $50,000,000 100.00%
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