EXHIBIT 10.18
SEVENTH AMENDMENT AND CONSENT dated as of
October 4, 2002 (this "Amendment") to the Amended and
Restated Credit Agreement dated as of April 27, 200l
(as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Credit
Agreement") among MTS, INCORPORATED, a California
corporation ("MTS"); TOWER RECORDS KABUSHIKI KAISHA, a
Japanese corporation ("TRKK", and together with MTS,
the "Borrowers"); the LENDERS party thereto (the
"Lenders"); and JPMORGAN CHASE BANK (f/k/a The Chase
Manhattan Bank), as Administrative Agent (in such
capacity, the "Agent").
WHEREAS, the Borrowers, the Lenders and the Agent are parties
to the Credit Agreement; and
WHEREAS, the Borrowers have requested that the Maturity Date
under the Credit Agreement be extended to October 11, 2002 and the Lenders party
hereto are willing to amend the Credit Agreement on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual agreements
herein contained and other good and valuable consideration, the sufficiency and
receipt of which is hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. Defined Terms. Capitalized terms used and not
defined herein shall have the meanings given to them in the Credit Agreement, as
amended hereby.
SECTION 2. Amendments to the Credit Agreement. Section 1.01 of
the Credit Agreement is hereby amended by amending and restating the definition
of "Maturity Date" in its entirety as follows:
"Maturity Date' means October 11, 2002."
SECTION 3. Consent and Agreement. (a) The Agent and the
Lenders hereby consent to the sale (the "TRKK Sale") by MTS of all of the issued
and outstanding capital stock of TRKK and the Japanese trademarks, service marks
and trade names associated with the business conducted by TRKK pursuant to the
terms of the stock purchase agreement dated as of April 11, 2002 (the "Purchase
Agreement"), between MTS and Valtona Holding B.V. ("Valtona"), a corporation
wholly owned by Nikko Principal Investments Japan Ltd., as assigned by Valtona
to
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Vespasianus Co., Ltd. (the "Buyer"), subject to the receipt by the Agent, on
behalf of the Lenders, of proceeds of the TRKK Sale in an amount not less than
Y13,505,028,823.016.
(b) The Agent agrees to, on the date upon which the TRKK Sale
is consummated pursuant to the terms set forth in the Purchase Agreement and
provided the Agent receives proceeds from the TRKK Sale in an amount not less
than Y13,505,028,823.016, execute and deliver to the Buyer the lien release
letter, acknowledgment of release and payoff letter, in each case in the form
attached as Exhibit A hereto.
SECTION 4. Effect of Amendment. Except as expressly set forth
herein, this Amendment shall not by implication or otherwise limit, impair,
constitute a waiver of, or otherwise affect the rights or remedies of the
Lenders, the Collateral Agent or the Administrative Agent under the Credit
Agreement, as amended by this Amendment or any other Loan Document, and shall
not alter, modify, amend or in any way affect any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement, as
amended by this Amendment, or any other Loan Document, all of which are ratified
and affirmed in all respects and shall continue in full force and effect.
Nothing herein shall be deemed to entitle any Borrower to a consent to, or a
waiver, amendment, modification or other change of, any of the terms,
conditions, obligations, covenants or agreements contained in the Credit
Agreement, as amended by this Amendment, or any other Loan Document in similar
or different circumstances. This Amendment shall apply and be effective only
with respect to the provisions of the Credit Agreement set forth herein. After
the date hereof, any reference to the Credit Agreement shall mean the Credit
Agreement as modified hereby. This Amendment shall constitute a "Loan Document"
for all purposes of the Credit Agreement and the other Loan Documents.
SECTION 5. Representations and Warranties. Each of the
Borrowers hereby represents and warrants to the Agent and the Lenders as of the
date hereof as follows:
(a) No Default or Event of Default shall have occurred and be
continuing after giving effect to this Amendment.
(b) The execution, delivery and performance by each of the
Borrowers of this Amendment have been duly authorized by all necessary corporate
and other action and do not and will not require any registration with, consent
or approval of, notice to or action by, any Person (including any Governmental
Authority) in order to be effective and enforceable. The Credit Agreement as
amended by this Amendment constitutes the legal, valid and binding obligation of
each of the Borrowers, enforceable against them in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors'
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rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
(c) All representations and warranties of the Borrowers
contained in Article III of the Credit Agreement are true and correct as of the
date hereof (except for representations or warranties that expressly relate to
an earlier date, in which case such representations and warranties are true and
correct as of such earlier date).
SECTION 6. Effectiveness. This Amendment shall become
effective on the first date on which each of the following conditions has been
satisfied:
(a) The Agent shall have received counterparts hereof duly
executed and delivered by the Borrowers and each of the Lenders.
(b) TRKK shall have provided irrevocable written notice to the
agent (the "Japan Agent") representing the financial institutions (the "Japan
Lenders") under the credit facility (the "Japan Facility") among TRKK, the Japan
Agent and the Japan Lenders to fund the Japan Facility, the proceeds of which
will be used to fund a portion of the purchase price paid by the Buyer to MTS
for TRKK.
SECTION 7. Costs and Expenses. Each Borrower hereby agrees,
jointly and severally, to reimburse the Agent for its out-of-pocket expenses in
connection with this Amendment, including the reasonable fees, charges and
disbursements of Cravath, Swaine & Xxxxx, counsel for the Agent.
SECTION 8. Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all of which together shall constitute a single instrument. Delivery of an
executed counterpart of a signature page of this Amendment by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart hereof.
SECTION 9. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 10. Submission to Jurisdiction. The provisions of
Section 9.09 of the Credit Agreement shall apply mutatis mutandis to this
Amendment and any action or proceeding in respect hereof.
SECTION 11. Headings. The headings of this Amendment are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.
MTS, INCORPORATED,
By /s/ XxXxxxxx X. Xxxxxxx
-----------------------------------
Name: XxXxxxxx X. Xxxxxxx
Title: Secretary
TOWER RECORDS KABUSHIKI KAISHA,
By /s/ XxXxxxxx X. Xxxxxxx
-----------------------------------
Name: XxXxxxxx X. Xxxxxxx
Title: Director
JPMORGAN CHASE BANK (f/k/a THE CHASE
MANHATTAN BANK), individually and as
Administrative Agent,
By /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
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SIGNATURE PAGE TO
SEVENTH AMENDMENT
TO MTS/TRKK
AMENDED AND RESTATED
CREDIT AGREEMENT
To approve the Amendment:
Name of Institution:
California Bank and Trust
----------------------------------------
By /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
SIGNATURE PAGE TO
SEVENTH AMENDMENT
TO MTS/TRKK
AMENDED AND RESTATED
CREDIT AGREEMENT
To approve the Amendment:
Name of Institution:
The Mitsubishi Trust and Banking
----------------------------------------
Corporation
-----------
By /s/ Xxxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President
SIGNATURE PAGE TO
SEVENTH AMENDMENT
TO MTS/TRKK
AMENDED AND RESTATED
CREDIT AGREEMENT
To approve the Amendment:
Name of Institution:
Lloyds TSB Bank Plc
----------------------------------------
By /s/ Xxxxxxx X.X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X.X. Xxxxxxx
Title: Assistant Director
Credit Services
By /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Senior Vice President &
Chief Credit Officer
SIGNATURE PAGE TO
SEVENTH AMENDMENT
TO MTS/TRKK
AMENDED AND RESTATED
CREDIT AGREEMENT
To approve the Amendment:
Name of Institution:
U.S. Bank
----------------------------------------
By /s/ Xxxx X. Esnob
------------------------------------
Name: Xxxx X. Esnob
Title: Vice President
SIGNATURE PAGE TO
SEVENTH AMENDMENT
TO MTS/TRKK
AMENDED AND RESTATED
CREDIT AGREEMENT
To approve the Amendment:
Name of Institution:
Mizuho Corporate Bank, Ltd
----------------------------------------
(f/k/a The Fuji Bank, Limited)
By /s/ Xxxxxxxx Xxxxxx
------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Senior Vice President
SIGNATURE PAGE TO
SEVENTH AMENDMENT
TO MTS/TRKK
AMENDED AND RESTATED
CREDIT AGREEMENT
To approve the Amendment:
Name of Institution:
BNP Paribas
----------------------------------------
By /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
By /s/ Xxxxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Managing Director
SIGNATURE PAGE TO
SEVENTH AMENDMENT
TO MTS/TRKK
AMENDED AND RESTATED
CREDIT AGREEMENT
To approve the Amendment:
Name of Institution:
Sumitomo Mitsui Banking Corporation
----------------------------------------
By /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President
SIGNATURE PAGE TO
SEVENTH AMENDMENT
TO MTS/TRKK
AMENDED AND RESTATED
CREDIT AGREEMENT
To approve the Amendment:
Name of Institution:
UFJ Bank Limited
----------------------------------------
By /s/ Xxxxxxx Xxxx
------------------------------------
Name: Xxxxxxx Xxxx
Title: Vice President
SIGNATURE PAGE TO
SEVENTH AMENDMENT
TO MTS/TRKK
AMENDED AND RESTATED
CREDIT AGREEMENT
To approve the Amendment:
Name of Institution:
Societe Generale
----------------------------------------
By /s/ R. Xxxxx Xxxxxx
------------------------------------
Name: R. Xxxxx Xxxxxx
Title: Director
Corporate Banking
SIGNATURE PAGE TO
SEVENTH AMENDMENT
TO MTS/TRKK
AMENDED AND RESTATED
CREDIT AGREEMENT
To approve the Amendment:
Name of Institution:
Wachovia Bank, National Association
----------------------------------------
By /s/ Xxxxxxx XxXxxxxx
------------------------------------
Name: Xxxxxxx XxXxxxxx
Title: Director
SIGNATURE PAGE TO
SEVENTH AMENDMENT
TO MTS/TRKK
AMENDED AND RESTATED
CREDIT AGREEMENT
To approve the Amendment:
Name of Institution:
Union Bank of California, N.A.
----------------------------------------
By /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
EXHIBIT A
FORM OF LIEN RELEASE, ACKNOWLEDGMENT OF
RELEASE AND PAYOFF LETTER
October 11, 2002
BY FACSIMILE
JPMorgan Chase Bank, New York Branch
as Collateral Agent and Administrative Agent
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telecopy No. 000-000-0000
Ladies and Gentlemen:
Pursuant to the Credit Agreement dated as of April 27, 200l
(as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among MTS, Incorporated
("MTS"), Tower Records Kabushiki Kaisha ("TRKK"), the lenders party thereto (the
"Lenders") and JPMorgan Chase Bank, as Administrative Agent and Collateral Agent
(the "Agent"), MTS hereby gives notice of the following transaction (capitalized
terms used herein without definition shall have the meanings specified in the
Credit Agreement):
Pursuant to the Stock Purchase Agreement, dated as of April
11, 2002, as amended (the "Purchase Agreement"), between MTS
and Valtona Holding B.V. ("Valtona"), a wholly owned subsidiary of Nikko
Principal Investments Japan Ltd., as assigned by Valtona to Vespasiannus Co.,
Ltd. (the "Buyer"), MTS will sell to the Buyer all of the issued and outstanding
shares of capital stock of TRKK (the "Shares"), as well as the Japanese
trademarks, service marks and tradenames and certain other assets associated
with the business conducted by TRKK (the "Related Assets"). The aggregate
purchase price to be paid by the Buyer for the Shares and the Related Assets is
Y13,505,028,823.016.
The stock and asset sale described above (the "Sale") is
permitted under Section 3 of the Amendment and Consent to the
Credit Agreement (the "Amendment Agreement"), dated as of October 4, 0000, xxxxx
XXX, XXXX, the Lenders and the Agent.
Because TRKK is a Subsidiary Loan Party, its assets have
been pledged to the Agent under the Japanese Security Agreement.
The Related Assets have also been pledged to the Agent under the Japanese
Security Agreement. In addition, all of the issued and outstanding voting shares
of capital stock of TRKK (the "Pledged Shares") have been pledged to the Agent
under the Pledge Agreement. Pursuant to the terms of the Amendment Agreement,
upon the consummation of the Sale and the receipt by the Agent of
Y13,505,028,823.016, which amount represents
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all amounts to be paid to the Agent from the proceeds of the Sale, the Related
Assets and the assets of TRKK are to be released from the Liens granted under
the Japanese Security Agreement, the Pledged Shares are to be released from the
Lien created under the Pledge Agreement and TRKK is to be released from all of
its obligations under the Credit Agreement, the Japanese Security Agreement, the
Pledge Agreement, any other Loan Documents and any other agreements related
thereto.
Please acknowledge your agreement to the foregoing by
executing a counterpart of this letter in the space provided below
and returning it to the undersigned.
Very truly yours,
MTS, INCORPORATED,
By
Name:
Title:
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The undersigned, in its capacity as Administrative Agent and
Collateral Agent under the Credit Agreement, the Japanese Security Agreement and
the Pledge Agreement agrees, at the time the releases referred to in the
foregoing letter are to become effective as provided in the Amendment Agreement,
to execute and deliver to TRKK and Buyer an Acknowledgment of Release in the
form of Annex A hereto and a Payoff Letter in the form of Annex B hereto.
JPMorgan Chase Bank, New York Branch, as
Administrative Agent and Collateral Agent,
By
Name:
Title:
cc: Xxxxxxx X. Xxxxx, Esq.
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy No. 212.474.3700
ANNEX A
Form of Acknowledgment of Release
October 11, 2002
Reference is made to the letter dated October 11, 2002 (the
"Confirmation Letter"), from MTS, Incorporated ("MTS"), to JPMorgan Chase Bank
acting in its capacity as Administrative Agent and Collateral Agent (the
"Agent"). Capitalized terms used herein have the meanings given to them in the
Confirmation Letter.
1. The Agent hereby confirms that (i) the Sale has been
consummated and (ii) the Agent has received from TRKK Y13,505,028,823.016, which
amount represents all amounts to be paid to the Agent from the proceeds of the
Sale as provided in the Amendment Agreement. As a result of the completion of
the transactions set forth in the preceding sentence, all of the Liens granted
to the Agent with respect to the assets of TRKK (including the Related Assets)
and in the Pledged Shares are hereby released and discharged, and TRKK is hereby
released and discharged from all of its obligations under the Credit Agreement,
the Japanese Security Agreement, the Pledge Agreement, any other Loan Documents
and any other agreements related thereto.
2. The Agent confirms that upon the completion of the
transactions set forth in the preceding paragraph, the Agent shall hold no liens
or security interests with respect to any assets of TRKK or Buyer pursuant to
the Credit Agreement, the Japanese Security Agreement, the Pledge Agreement, any
other Loan Documents or any other agreements related thereto.
3. The Agent hereby acknowledges and agrees that each of TRKK
and Buyer is released from any claims, obligations, rights, causes of action or
liabilities, whether known or unknown, foreseen or unforeseen, which the Agent
may be entitled to assert against TRKK or Buyer based in whole or in part on any
act, omission, or other occurrence taking place on or prior to the date hereof.
JPMORGAN CHASE BANK, New York Branch,
as Collateral Agent and Administrative Agent,
By
Name:
Title:
ANNEX B
Form of Payoff Letter
October 11, 2002
Re: Receipt of Payment and Confirmation of Payoff
The Agent hereby confirms (i) that it has received from TRKK
Y13,505,028,823.016, which amount represents all amounts due to the Agent (the
"Payoff Amount") pursuant to the Stock Purchase Agreement dated as of April 11,
2002, as amended, between MTS, Incorporated and Valtona Holding B.V., a wholly
owned subsidiary of Nikko Principal Investments Japan Ltd. (`Valtona"), as
assigned by Valtona to Vespasianus Co., Ltd. and (ii) that upon receipt of the
Payoff Amount, all amounts due from TRKK pursuant to the Credit Agreement and
any other agreements related thereto shall have been paid in full.
JPMORGAN CHASE BANK, New York Branch,
as Collateral Agent and Administrative Agent,
By
Name:
Title:
