Exhibit 10.1
ASSIGNMENT AGREEMENT
among
BNP PARIBAS
and
OTHER LENDERS PARTIES HERETO
as Assignors,
and
MOVIE GALLERY, INC.
and the Assignees listed in Schedule II hereto collectively
as Assignee
Dated as of May 2, 2001
ASSIGNMENT AGREEMENT
This Assignment Agreement dated as of May 2, 2001 (the "Agreement") is
among (a) BNP PARIBAS, as Agent (the "Agent") and Lender under the Existing
Credit Agreement referred to below, and those certain Lenders party thereto and
executing this Agreement (collectively, the "Assignors") and (b) MOVIE GALLERY,
INC., a Delaware corporation (together with any other additional assignee
designated on Schedule II to this agreement, herein collectively referred to as
the "Assignee").
INTRODUCTION
A. The Assignors are party to the Credit Agreement dated as of March 6,
1998, as amended by First Amendment and Waiver dated as of May 15, 1998, Second
Amendment and Waiver dated as of August 7, 1998, Third Amendment dated as of
November 16, 1998, Fourth Amendment dated as of January 21, 1999, Fifth
Amendment and Waiver dated as of March 10, 1999, Sixth Amendment and Waiver
dated as of April 28, 1999, and Seventh Amendment and Waiver dated as of May 28,
1999, among Video Update, Inc., as Borrower ("VUI"), and Assignors (as so
amended, the "Existing Credit Agreement," terms used in this Agreement unless
otherwise defined shall have the meanings ascribed to them in the Existing
Credit Agreement). Pursuant to the terms of the Existing Credit Agreement, the
Assignors have made Loans to VUI, which Loans are evidenced by and secured in
the manner set forth in the Existing Credit Agreement and the other Loan
Documents listed on Schedule I attached hereto (collectively referred to herein
as the "Existing Loan Documents"), and guaranteed by VUI's Subsidiaries.
B. VUI and its U.S. Subsidiaries are currently debtors-in-possession under
Jointly Administered Chapter 11 Case Nos. 00-3663 through 00-3683 in the U.S.
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). Pursuant
to a Fifth Interim Order Authorizing the Use of Cash Collateral and Providing
for Adequate Protection entered by the Bankruptcy Court on April 3, 2001, a copy
of which is attached hereto as Exhibit "A", (together with the Sixth Interim
Order Authorizing the Use of Cash Collateral and Providing for Adequate
Protection filed May 1, 2001, attached hereto as Exhibit A-1, the "Cash
Collateral Order"), the Assignors were granted replacement liens on Prepetition
Collateral and first priority liens on Post-Petition Collateral, including all
claims of VUI and its U.S. Subsidiaries against third parties for loss or
damage. To the extent the protections afforded the Assignors should prove
inadequate, the Assignors shall be entitled to a super-priority administrative
expense claim subject only to certain Carve-Outs detailed in the Cash Collateral
Order.
C. Pursuant to the terms of the Existing Credit Agreement, the Assignors
may assign all or a portion of their Loans and related outstanding Obligations
with the consent of the Agent, which consent Agent hereby grants.
D. Pursuant to the terms of the Existing Loan Documents, each Assignor held
a several debt of VUI and therefore a separate "Claim" under Section 101(5) of
the Bankruptcy Code, 11 U.S.C.ss.1.01 et seq.
E. Pursuant to the terms of this Agreement, the Assignors shall assign to
the Assignee, without recourse, representation or warranty except as set forth
below, and the Assignee shall purchase the Claims evidenced by the Loans, Liens,
Collateral, and certain of the rights and privileges of Assignors under the
Existing Credit Agreement and the Cash Collateral Order, all as set forth
herein.
The parties hereto agree as follows:
1. Assignment.
(a) Subject to the satisfaction of the conditions precedent of this
Agreement set forth in Section 6 below, as of the Transfer Date (as defined in
Section 4 below), the Assignors (including BNP Paribas as Agent with respect to
the Liens (as defined in the Existing Credit Agreement) held for the benefit of
the Assignors) hereby irrevocably sell and assign to the Assignee, without
recourse, representation or warranty except as set forth below, and the Assignee
hereby purchases from each Assignor executing this Agreement all of such
Assignor's Claim including but not limited to, its interests in the indebtedness
of VUI and its Subsidiaries evidenced by the Loans and Existing Loan Documents
including, without limitation, the Notes issued pursuant to the Existing Credit
Agreement and the Liens evidenced by the Existing Loan Documents (collectively,
the "Debt") and the Cash Collateral Order including, without limitation, all of
the Agent's right, title and interest in and to the Collateral, but excluding
the Retained Rights (as defined in Section 1(b) below) (collectively, the
"Assigned Property").
(b) Notwithstanding the foregoing, it is expressly understood and
agreed that each Assignor shall be entitled to the benefits of all indemnities
and releases by VUI in their favor which would, by the terms of the Existing
Loan Documents or any Cash Collateral Order, have otherwise survived the
Transfer Date. The rights described in this Section 1(b) shall be referred to in
this Agreement as the "Retained Rights." In addition to any other agreement in
the Assignors' possession, it is agreed and understood among the parties hereto
that this Agreement shall constitute evidence of the Retained Rights owing to
Assignors. Notwithstanding the Assignors' Retained Rights, Assignee shall be
entitled to all of the rights, privileges and benefits of the Existing Loan
Documents including, but not limited to, all rights of indemnification by VUI
and its Subsidiaries.
2. Payment for Assignments. On the Transfer Date, the Assignee shall pay to
the Agent for the benefit of each Assignor an amount equal to the Purchase Price
(as defined below). Such payment shall be made by wire transfer of immediately
available funds to the account designated by the Agent not later than 11:00
a.m., New York time on the Transfer Date. Thereupon, Agent shall promptly
disburse to each Assignor, by wire transfer of immediately available funds, each
Assignor's pro rata share (as determined by the Existing Credit Agreement and
net of the offset by Agent of any outstanding expense not reimbursed by such
Assignor to Agent) of the Purchase Price as payment for such Assignor's
assignment of interest in the Assigned Property.
3. Purchase Price. The purchase price for the Assigned Property (the
"Purchase Price") shall be an amount equal to (a) a percentage determined by a
fraction, the numerator of which shall be the aggregate amount of all Claims to
be sold hereunder and the denominator of which shall be the aggregate amount of
all Claims multiplied by (b) $9,200,000.00.
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4. Transfer Date. The "Transfer Date" as used herein shall mean the date
upon which each of the conditions precedent set forth in Section 6 have been
satisfied or duly waived in accordance with Section 12.
5. Effect of Payment. Each of the parties hereto acknowledges and agrees
that, immediately upon the completion of the transfers of the funds to the Agent
on behalf of the Assignors as described in Section 2 above: (a) the Assignment
described in Section 1 shall be effective and the Assigned Property shall be
vested in the Assignee.
6. Conditions Precedent.
(a) The obligations of the Assignee to purchase the Assigned Property
shall be subject to the following conditions precedent:
(i) the Assignee shall have received counterparts of this
Agreement executed by a sufficient number of Assignors such that Assignors that
hold at least two-thirds in amount and more than one-half in number of such
Claims shall have become parties to this Agreement;
(ii) the representations and warranties made by the Assignors in
Section 7 of this Agreement shall be true and correct in all material respects;
(b) The obligations of the Assignors to sell and assign the Assigned
Property shall be subject to the following conditions precedent:
(i) the Assignors shall have received counterparts of this
Agreement executed by the required number of Assignors and the Assignee;
(ii) the representations and warranties made by the Assignee in
Section 8 of this Agreement shall be true and correct in all material respects;
(iii) the Assignors shall have received their pro rata share of
the Purchase Price;
(iv) the Purchase Price shall have been received by agent by
11:00 a.m., New York time, on May 7, 2001.
7. Representations and Warranties of Assignors. Each Assignor represents
and warrants to Assignee as follows:
(a) as of the Transfer Date immediately before giving effect to the
assignment transactions contemplated hereunder, each Assignor is the legal and
beneficial owner of its pro rata share of the Debt and its Claim, free and clear
of any adverse claim;
(b) Each Assignor has full power and authority, and has taken all
action necessary, to execute and deliver this Agreement and any and all other
documents required or permitted to be executed or delivered by it in connection
with this Agreement and to fulfill its obligations under, and to consummate the
transactions contemplated by this Agreement, and no governmental authorizations
or other authorizations are required in connection therewith; and
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(c) this Agreement constitutes the legal, valid and binding obligation
of each Assignor enforceable in accordance with its terms.
The Assignors make no representation or warranty express or implied, and assume
no responsibility with respect to the financial condition of VUI or any of its
Subsidiaries or the performance by VUI of the obligations under the Existing
Loan Documents, and assume no responsibility with respect to any statements,
warranties or representations made in or in connection with the Existing Credit
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Existing Credit Agreement or any Existing Loan
Document other than as expressly set forth above.
8. Representations and Warranties of the Assignee. Assignee hereby
represents and warrants to Assignor as follows:
(a) Assignee has full power and authority, and has taken all action
necessary, to execute and deliver this Agreement, and any and all other
documents required or permitted to be executed or delivered by it in connection
with this Agreement and to fulfill its obligations under, and to consummate the
transactions contemplated by this Agreement, and no governmental authorizations
or other authorizations are required in connection therewith;
(b) this Agreement constitutes the legal, valid and binding obligation
of Assignee enforceable in accordance with its terms;
(c) Assignee (i) confirms that it has received a copy of the Existing
Loan Documents, together with all financial and other information and documents
it deems necessary and appropriate, to make its own credit analysis and decision
to enter into this Agreement; and (ii) agrees that it will, independently and
without reliance upon the Agent or any Assignor and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit or other decisions in taking or not taking action under the Existing
Credit Agreement or with respect to the Claims sold hereunder;
(d) Assignee is acquiring the Assigned Property for its own account
and not with a view toward a public sale or distribution and has such knowledge
and experience in financial and business matters to enable it to evaluate the
merits and risks of purchasing the Assigned Property and to make the necessary
investment decisions in connection therewith.
(e) Each of Assignee is an "accredited investor" as that term is
defined in Regulation D of the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
9. Resignation of BNP Paribas as Agent. By executing this Agreement, BNP
Paribas shall, upon the effectiveness of this Agreement in accordance with
Section 6 above, be deemed to have provided each Assignor with written notice of
its resignation as Agent in accordance with the Existing Credit Agreement and by
executing this Agreement each Assignor shall be deemed to have (i) accepted such
resignation and (ii) waived any requirement of prior notice of such resignation.
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10. Further Assurances. The Assignors agree that they shall, upon the
request of the Assignee, execute and deliver any and all instruments of transfer
and assignment and other documents reasonably requested by the Assignee in
connection with the assignments contemplated by this Agreement in order to
transfer the Liens of record to Assignee. Each Assignor shall promptly, after
receipt by it of its portion of the Purchase Price, deliver to Assignee all
Notes payable to it endorsed by the respective Assignor (without recourse,
representation or warranty except as specifically provided in this Agreement)
and made payable to Assignee or, in lieu of such Notes, a lost note indemnity
agreement in form and substance satisfactory to the Assignee.
11. Counterparts/Facsimile. This Agreement may be signed in any number of
counterparts, and signatures to all counterparts hereto, when assembled
together, shall constitute signatures to this entire Agreement with the same
effect as if all signatures were on the same document. The parties agree that
this Agreement may be executed and delivered via facsimile and any such
facsimile copy of any such document shall be considered to have the same binding
legal effect as an original copy and each party hereby agrees that it shall not
raise the use of a facsimile copy as a defense to this Agreement or any other
such documents and forever waives any such defense. Furthermore, at the request
of any party, a party executing and delivering this Agreement or any such
document by facsimile copy shall re-execute an original copy in replacement.
12. Integration. This Agreement contains a final and complete integration
of all prior expressions by the parties hereto with respect to the assignment
transactions contemplated hereto and shall constitute the entire agreement among
the parties hereto with respect to the subject matter hereof, superseding all
prior oral or written understandings.
13. Amendments. No amendment or waiver of any provision of this Agreement
nor consent to any departure therefrom shall in any event be effective unless
the same shall be in writing and signed by all parties hereto. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
14. Governing Law. This Agreement, including the rights and duties of the
parties hereto, shall be governed by, and construed in accordance with, the laws
of the state of New York.
15. Notices. Any notice or other communication herein required or permitted
to be given shall be in writing and may be personally served, telecopied,
telexed or sent by courier service or United States mail and shall be deemed to
be effective pursuant to the terms of the Existing Credit Agreement. For the
purposes hereof, the addresses of the parties hereto shall be as listed on the
signature pages hereto.
16. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns provided,
however, in the event that the Purchase Price has not been received by Agent as
required by Section 6(iv) hereof, this Agreement shall be null and void.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
ASSIGNOR, AGENT & LENDER:
------------------------
BNP PARIBAS
By:/s/ Xxxxxx X. Xxxxx, Xx.
Name: Xxxxxx X. Xxxxx, Xx.
Title: Director
Address for Notice:787 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax No.: (000) 000-0000
ASSIGNOR, & LENDER:
------------------
PPM AMERICA, INC. (on behalf of XXXXXXX
NATIONAL LIFE INSURANCE CO.)
By:/s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Managing Director
Address for Notice: 000 X. Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Fax No.: (000) 000-0000
ASSIGNOR & LENDER:
-----------------
BOEING CAPITAL CORPORATION
By: /s/ X. X. Xxxxx
Name: X. X. Xxxxx
Title: Managing Director-Commercial Finance
Address for Notice: 0000 Xxxxxx Xxxxxxx Xxx
Xxxx Xxxxx, XX 00000
Fax No.: (000) 000-0000
6
ASSIGNOR & LENDER:
-----------------
KEY CORPORATE CAPITAL INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Designated Signer
Address for Notice: KeyBank National Assn.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax No.: (000) 000-0000
ASSIGNOR & LENDER:
-----------------
FIRST SOURCE FINANCIAL LLP
By: /s/ Xxxxxx X. Xxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxx
Title: Senior Vice President and
General Counsel
Address for Notice: 0000 Xxxx Xxxx Xxxx
Xxxxx X
Xxxxxxx Xxxxxxx, XX 00000
Fax No.: (000) 000-0000
ASSIGNOR & LENDER:
-----------------
CAROLINA FIRST BANK
By: /s/ Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: Executive Vice President
Address for Notice: 000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Fax No.: (000) 000-0000
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ASSIGNOR & LENDER:
-----------------
PARIBAS CAPITAL FUNDING
By: /s/ X. X. Xxxxxxxxx
Name: X. X. Xxxxxxxxx
Title: Director
Address for Notice: 000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Fax No.: (000) 000-0000
ASSIGNOR & LENDER:
-----------------
FLEET NATIONAL BANK
By: /s/ Xxxxxxx X. X'Xxxxx
Name: Xxxxxxx X. X'Xxxxx
Title: Senior Vice President
Address for Notice: MS MA 0E10006A
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax No.: (000) 000-0000
ASSIGNOR & LENDER:
-----------------
ML CLO XIX STERLING (CAYMAN) LTD.
By:
Name:
Title:
Address for Notice:
Fax No.:
ASSIGNOR & LENDER:
-----------------
KZH STERLING LLC
By: /s/ Xxxxx Xxx
Name: Xxxxx Xxx
Title: Authorized Agent
Address for Notice: The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Fax No.: (000) 000-0000
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ASSIGNOR & LENDER:
-----------------
ARES LEVERAGED INVESTMENT FUND, L.P.
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Vice President
Address for Notice: 0000 Xxxxxx xx Xxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Fax No.: (000) 000-0000
ASSIGNOR & LENDER:
-----------------
CONTINENTAL CASUALTY COMPANY
By: /a/ Xxxxxxx X. XxXxxx
Name: Xxxxxxx X. XxXxxx
Title: Vice President
Address for Notice: XXX Xxxxx, 00 Xxxxx
Xxxxxxx, XX 00000
Fax No.: (000) 000-0000
ASSIGNOR & LENDER:
-----------------
THE XXX XXXXXXX MASTER L.P.
By: /s/ Xxx X. Xxxxxxx
Name: Xxx X. Xxxxxxx
Title: General partner
Address for Notice: 000 0xx Xxxxxx Xxx. 0000
Xxx Xxxx, XX 00000
Fax No.: (000) 000-0000
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ASSIGNOR & LENDER:
-----------------
THE RAVICH CHILDREN PERMANENT TRUST
By:/s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Trustee
Address for Notice: 00000 Xxxxxxxx Xxxx.
# 000
Xxx Xxxxxxx, XX 00000
Fax No.: (000) 000-0000
ASSIGNOR & LENDER:
-----------------
THE RAVICH REVOCABLE TRUST OF 1989
By:/s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Trustee
Address for Notice: 00000 Xxxxxxxx Xxxx.
#000
Xxx Xxxxxxx, XX 00000
Fax No.: (000) 000-0000
ASSIGNOR & LENDER:
-----------------
ARES LEVERAGED INVESTMENT FUND II, L.P.
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Vice President
Address for Notice: 0000 Xxxxxx xx Xxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Fax No.: (000) 000-0000
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ASSIGNOR & LENDER:
-----------------
VALUE PARTNERS, L.P.
By: /s/ Xxxxxxx X.Xxxxx
Name: Xxxxxxx X. Xxxxx
Title:Managing Partner
Address for Notice: Xxxxx & Partners
0000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxx XX 00000
Fax No.: (000) 000-0000
ASSIGNOR & LENDER:
-----------------
THE PROGRESSIVE/WINDIGO FUNDS, LLC
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Managing Member
Address for Notice: 000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Fax No.: (000) 000-0000
ASSIGNOR & LENDER:
-----------------
U.S. BANCORP INVESTMENTS, INC.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Chairman and CEO
Address for Notice: 00000 Xxxxxxxx Xxxx.
# 000
Xxx Xxxxxxx, XX 00000
Fax No.: (000) 000-0000
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ASSIGNEE:
MOVIE GALLERY, INC.
By: /s/ S. Page Xxxx
Name: S. Page Xxxx
Title: An Authorized Representative
Address for Notice: 000 Xxxx Xxxx Xxxxxx
Xxxxxx, XX 00000
Fax No.: (000) 000-0000
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SCHEDULE I
List of Documents
1. Credit Agreement among Video Update, Inc. ("VUI"), the various lending
institutions (VUI and the various lending institutions being hereinafter
referred to as the "Banks") and Banque Paribas, as Agent ("Agent"), dated as of
March 6, 1998. Terms not defined herein shall have the meanings provided for
under the Credit Agreement.
Credit Agreement Amendments:
(a) First Amendment and Waiver dated as of May 15, 1998
(b) Second Amendment and Waiver dated as of August 7, 1998
(c) Third Amendment dated as of November 16, 1998
(d) Fourth Amendment dated as of January 21, 1999
(e) Fifth Amendment and Waiver dated as of Xxxxx 00, 0000
(x) Sixth Amendment and Waiver dated as of April 28, 1999
(g) Seventh Amendment and Waiver dated as of May 28, 1999
2. A Term Note dated March [6], 1998, executed by VUI in favor of each of
the following Banks making an A Term Loan Commitment in the amounts set forth
below:
[To be provided]
3. B Term Note dated March [6], 1998, executed by VUI in favor of each of
the following Banks making a B Term Loan Commitment in the amounts set forth
below:
[To be provided]
4. C Term Note dated May [28], 1999, executed by VUI in favor of each of
the following Banks making a C Term Loan Commitment in the amounts set forth
below:
[To be provided]
5. Capital Expenditure Note dated March [6], 1998, executed by VUI in favor
of each of the following Banks making a Capital Expenditure Loan Commitment in
the amounts set forth below:
[To be provided]
6. Revolving Note dated March [6], 1998, executed by VUI in favor of each
of the following Banks making a Revolving Loan Commitment in the amounts set
forth below:
[To be provided]
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7. Swingline Note dated March [6], 1998, executed by VUI in favor of Agent
in the amounts set forth below:
[To be provided]
8. U.S. Pledge Agreement dated as of March 6, 1998, among each U.S. Credit
Party and Agent
9. Securities Pledge Agreement (Canadian) dated March 6, 1998, in favor of
Agent, executed by the following:
(a) Video Update Canada Inc. ("VUC")
(b) 24 Hour Entertainment Group Inc.
10. U.S. Security Agreement dated as of March 6, 1998, among VUI, each U.S.
Credit Party and Agent
11. Security Agreements (Canadian) dated March 6, 1998, in favor of Agent,
executed by each of the following:
(a) VUC
(b) 1137239 Ontario Ltd.
(c) 24 Hour Entertainment Leasing Ltd.
(d) 24 Hour Entertainment Group Ltd.
12. Subsidiaries Guaranty dated as of March 6, 1998, executed by the
Subsidiaries of VUI
13. Copies of search results for UCC-1 Financing Statements (see file
labeled Exhibit "A" attached)
14. Copies of search results for PPSA Liens (see file labeled Exhibit "B"
attached)
15. Assignment of Security Interest in U.S. Trademarks and Patents dated
_________ in favor of Agent by VUI, Moovies, Inc. and Moovies of Iowa, Inc.
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SCHEDULE II
List of Additional Assignees
Movie Gallery No. 1 LLC
Movie Gallery No. 2 LLC
Movie Gallery No. 3 LLC
Movie Gallery No. 4 LLC
Movie Gallery No. 5 LLC
Movie Gallery No. 6 LLC
Movie Gallery No. 7 LLC
Movie Gallery No. 8 LLC
Movie Gallery No. 9 LLC
Movie Gallery No. 10 LLC
