exv10w3



 








EXHIBIT 10.3




LIMITED WAIVER WITH
RESPECT TO AMENDED AND RESTATED CREDIT AGREEMENT




     This LIMITED WAIVER WITH RESPECT TO AMENDED AND RESTATED CREDIT AGREEMENT
(this “Waiver”) is entered into as of this 31st day of March, 2005, by NAVARRE
CORPORATION, a Minnesota corporation (“Borrower”), the Credit Parties signatory
hereto, GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as agent
(the “Agent”) for itself and the Lenders under and as defined in the Credit
Agreement (as hereinafter defined), and the Lenders. Unless otherwise
specified herein, capitalized terms used in this Waiver shall have the meanings
ascribed to them by the Credit Agreement.



RECITALS




     WHEREAS, the Borrower, the Credit Parties, the Agent and the Lenders have
entered into that certain Amended and Restated Credit Agreement, dated as of
June 18, 2004 (as amended, supplemented, restated or otherwise modified from
time to time, the “Credit Agreement”); and



     WHEREAS, the Borrower, the Credit Parties, the Agent and the Lenders have
agreed to waive certain provisions of the Credit Agreement as set forth herein.



     NOW THEREFORE, in consideration of the foregoing recital, mutual
agreements contained herein and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Borrower, the
Credit Parties, the Agent, and Lenders hereby agree as follows:


SECTION 1. Limited Waivers. As long as no Default or Event of Default has
occurred and is continuing at the time of the Encore Stock Purchase (as defined
below) and after giving effect thereto, the Agent and the Lenders hereby waive
the provisions of Sections 6.2 and 6.5 of the Credit Agreement to the extent,
and solely to the extent, necessary to permit the purchase by Borrower all of
the Stock of Encore Software owned by Michael Bell on or prior to April 15,
2005 for an aggregate purchase price consisting solely of (i) an amount not to
exceed $3,400,000 payable in cash, and (ii) 300,000 shares of unregistered
common Stock of Borrower, in each case pursuant to and in accordance with a
stock purchase agreement and other related agreements, documents, opinions,
certificates, and other instruments, each of which shall be in form and
substance satisfactory to the Agent (the foregoing transaction is referred to
herein as the “Encore Stock Purchase”); provided, that promptly upon the
consummation of the Encore Stock Purchase, (a) Borrower shall pledge to the
Agent, for the benefit of the Agent and the Lenders, all of the Stock acquired
by Borrower pursuant to the Encore Stock Purchase as additional collateral
security for the Obligations pursuant to documentation in form and substance
satisfactory to the Agent and (b) deliver to the Agent the original copy of the
share certificate representing such pledged Stock acquired by Borrower pursuant
to the Encore Stock Purchase and the related undated, blank stock power. The
parties hereto agree that this Section 1 amends and restates in its entirety
Section 1(b) of that certain Limited Waiver With Respect To Credit Agreement,
dated as of March 15, 2005, by and among the Agent, the Lenders, the Borrower
and the Credit Parties.




 









 








SECTION 2. Effectiveness. The effectiveness of this Waiver is subject to the
satisfaction of each the following conditions precedent:




     (a) this Waiver shall have been duly executed and delivered by the
Borrower, the Credit Parties, the Agent and each Lender; and



     (b) the representations and warranties contained herein shall be true and
correct in all respects.


SECTION 3. Representations and Warranties. In order to induce the Agent and
each Lender to enter into this Waiver, each Credit Party hereby represents and
warrants to the Agent and each Lender, which representations and warranties
shall survive the execution and delivery of this Waiver, that:




     (a) all of the representations and warranties contained in the Credit
Agreement and in each Loan Document are true and correct as of the date hereof
after giving effect to this Waiver (determined as if all references to “Closing
Date” were references to March 31, 2005), except to the extent that any such
representations and warranties expressly relate to an earlier date;



     (b) the execution, delivery and performance by such Credit Party of this
Waiver has been duly authorized by all necessary corporate action required on
its part and this Waiver, and the Credit Agreement is the legal, valid and
binding obligation of such Credit Party enforceable against such Credit Party
in accordance with its terms, except as its enforceability may be affected by
the effect of bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to or affecting the rights or
remedies of creditors generally;



     (c) neither the execution, delivery and performance of this Waiver by such
Credit Party, the performance by such Credit Party of the Credit Agreement nor
the consummation of the transactions contemplated hereby does or shall
contravene, result in a breach of, or violate (i) any provision of any Credit
Party’s certificate or articles of incorporation or bylaws or other similar
documents, or agreements, (iii) any law or regulation, or any order or decree
of any court or government instrumentality, or (iii) any indenture, mortgage,
deed of trust, lease, agreement or other instrument to which any Credit Party
or any of its Subsidiaries is a party or by which any Credit Party or any of
its Subsidiaries or any of their property is bound, except in any such case to
the extent such conflict or breach has been waived herein or by a written
waiver document, a copy of which has been delivered to Agent on or before the
date hereof; and



     (d) no Default or Event of Default has occurred and is continuing.


SECTION 4. Reference to and Effect Upon the Credit Agreement.




     (a) Except as specifically set forth above, the Credit Agreement and the
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed; and



     (b) The waivers set forth herein are effective solely for the purposes set
forth herein and shall be limited precisely as written, and shall not be deemed
to (i) be a consent to any amendment, waiver or modification of any other term
or condition of the Credit Agreement or



 









 








any other Loan Document, (ii) operate as a waiver or otherwise prejudice
any right, power or remedy that the Agent or the Lenders may now have or may
have in the future under or in connection with the Credit Agreement or any
other Loan Document or (iii) constitute a waiver of any provision of the Credit
Agreement or any Loan Document, except as specifically set forth herein. Upon
the effectiveness of this Waiver, each reference in the Credit Agreement to
“this Agreement”, “herein”, “hereof” and words of like import and each
reference in the Credit Agreement and the Loan Documents to the Credit
Agreement shall mean the Credit Agreement as amended hereby. This Waiver shall
be construed in connection with and as part of the Credit Agreement.


SECTION 5. Costs And Expenses. As provided in Section 11.3 of the Credit
Agreement, the Borrower agrees to reimburse Agent for all fees, costs, and
expenses, including the reasonable fees, costs, and expenses of counsel or
other advisors for advice, assistance, or other representation in connection
with this Waiver.



SECTION 6. GOVERNING LAW. THIS WAIVER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS.



SECTION 7. Headings. Section headings in this Waiver are included herein for
convenience of reference only and shall not constitute part of this Waiver for
any other purposes.



SECTION 8. Counterparts. This Waiver may be executed in any number of
counterparts, each of which when so executed shall be deemed an original, but
all such counterparts shall constitute one and the same instrument.




(signature page follows)




 









 









     IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Waiver as of the date first written above.


	 	 	 	 	 
	 	BORROWER:





NAVARRE CORPORATION

 	 
	 	By:  	/s/ James G. Gilbertson
 	 
	 	 	Name:  	James G. Gilbertson 	 
	 	 	Title:  	Chief Financial Officer 	 
	 



	 	 	 	 	 
	 	GENERAL ELECTRIC CAPITAL CORPORATION, 

as Agent and Lender

 	 
	 	By:  	/s/  Leeanne C. Manning
 	 
	 	 	Name:  	Leeanne C. Manning 	 
	 	 	Title:  	Its Duly Authorized Signatory 	 




 









 







	 	 	 	 	 




     IN WITNESS WHEREOF, this Waiver has been duly executed as of the date
first written above by below Persons in their capacity as Credit Parties not as
Borrower.


	 	 	 	 	 
	 	ENCORE SOFTWARE, INC., as Credit Party

 	 
	 	By:  	/s/
James G. Gilbertson	 
	 	 	Name:  	James G. Gilbertson 	 
	 	 	Title:  	Chief Administrative Officer 	 
	 



	 	 	 	 	 
	 	BCI ECLIPSE COMPANY, LLC, as Credit Party

 	 
	 	By:  	/s/
James G. Gilbertson	 
	 	 	Name:  	James G. Gilbertson 	 
	 	 	Title:  	Chief Administrative Officer