Exhibit 10.1.1
AMENDMENT NO. 1 TO LOAN AGREEMENT
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September 15, 1998
Congress Financial Corporation (Northwest)
One Main Place
000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Ladies and Gentlemen:
Congress Financial Corporation (Northwest) ("Lender") and Valley Media,
Inc. ("Borrower") have entered into certain financing arrangements pursuant to
the Loan and Security Agreement dated as of May 21, 1998 by and between Lender
and Borrower (the "Loan Agreement") and all other Financing Agreements at any
time executed and/or delivered in connection therewith or related thereto. All
capitalized terms used herein shall have the meaning assigned thereto in the
Loan Agreement, unless otherwise defined herein.
Borrower has requested that Lender amend the Loan Agreement by increasing
the Maximum Credit, and Lender is willing to agree to the foregoing, on and
subject to the terms and conditions contained in this Amendment No. 1 to Loan
Agreement (this "Amendment").
In consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties hereto, the parties hereto hereby agree as follows:
1. Amendment of Definition of Maximum Credit. Section 1.33 of the Loan
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Agreement is hereby amended and restated in its entirety as follows:
"1.33 'Maximum Credit' shall mean the amount of $160,000,000."
2. Amendment Fee. In consideration of the increase in the Maximum Credit
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provided for in this Amendment, Borrower shall on the date hereof pay to Lender
or Lender, at its option, may charge the account(s) of Borrower maintained by
Lender, an amendment fee in the amount of $225,000, which fee is fully earned as
of the date hereof and shall constitute part of the Obligations.
3. Representations, Warranties and Covenants. In addition to the
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continuing representations, warranties and covenants heretofore or hereafter
made by Borrower to Lender pursuant to the Loan Agreement and the other
Financing Agreements, Borrower hereby represents, warrants and covenants with
and to Lender as follows (which representations,
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warranties and covenants are continuing and shall survive the execution and
delivery hereof and shall be incorporated into and made a part of the Financing
Agreements):
(a) No Event of Default exists on the date of this Amendment (after
giving effect to the amendments to the Loan Agreement made by this Amendment);
and
(b) This Amendment has been duly executed and delivered by Borrower
and is in full force and effect as of the date hereof, and the agreements and
obligations of Borrower contained herein constitute its legal, valid and binding
obligations enforceable against Borrower in accordance with their respective
terms.
4. Conditions Precedent. This Amendment shall not become effective
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unless all of the following conditions precedent have been satisfied in full, as
determined by Lender:
(a) the receipt by Lender of an original of this Amendment, duly
authorized, executed and delivered by Borrower;
(b) the receipt by Lender of a Certificate of the Secretary of
Borrower, in form and substance satisfactory to Lender, certifying as to the
adoption by Borrower's Board of Directors and current effectiveness of
resolutions authorizing Borrower to enter into and execute this Amendment and to
borrow from Lender under the secured lending facility established under the Loan
Agreement, as amended hereby, the maximum aggregate principal amount of
$160,000,000; and
(c) as of the date of this Amendment, no Event of Default shall have
occurred and be continuing and no event shall have occurred or condition be
existing and continuing which, with notice or passage of time or both, would
constitute an Event of Default.
5. Effect of this Amendment. Except as modified pursuant hereto, no
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other changes or modifications to the Loan Agreement and the other Financing
Agreements are intended or implied and in all other respects the Loan Agreement
and the other Financing Agreements are hereby specifically ratified, restated
and confirmed by all parties hereto as of the effective date hereof. To the
extent of any conflict between the terms of this Amendment and any of the
Financing Agreements, the terms of this Amendment shall control. The Loan
Agreement and this Amendment shall be read and be construed as one agreement.
6. Further Assurances. At Lender's request, Borrower shall execute and
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deliver such additional documents and take such additional actions as Lender
reasonably requests to effectuate the provisions and purposes of this Amendment
and to protect and/or maintain perfection of Lender's security interests in and
liens upon the Collateral.
7. Governing Law. The validity, interpretation and enforcement of this
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Amendment and any dispute arising out of the relationship between the parties
hereto, whether in contract, tort, equity or otherwise, shall be governed by the
internal laws of the State of California (without giving effect to principles of
conflicts of law).
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8. Binding Effect. This Amendment shall be binding upon and inure to the
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benefit of each of the parties hereto and their respective successors and
assigns.
9. Counterparts. This Amendment may be executed in any number of
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counterparts, but all of such counterparts when executed shall together
constitute but one and the same agreement. In making proof of this Amendment,
it shall not be necessary to produce or account for more than one counterpart
thereof signed by each of the parties hereto.
Very truly yours,
VALLEY MEDIA, INC.
By: /s/ Xxxxxx X. Xxxx
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Title: Treasurer
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CONGRESS FINANCIAL CORPORATION
(NORTHWEST)
By: /s/ Xxxxxx X. Xxxxx
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Title: First Vice President
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