EXHIBIT 10.1
WAIVER AND AMENDMENT NO. 2 TO FINANCING AGREEMENT
This
WAIVER AND AMENDMENT NO. 2 TO FINANCING AGREEMENT (this
“ Waiver and Amendment ”), dated as of October
___, 2007, is entered into by and among LOUD TECHNOLOGIES
INC. , a Washington corporation (“ Parent ”
or “ US Borrower ”), and GRACE ACQUISITIONCO
LIMITED , a company incorporated under the laws of England and
Wales with registered number 06078534 (“ UK Borrower
”), each subsidiary of the Parent listed on the signature
pages hereto, the lenders from time to time party hereto (each a
“ Lender ” and collectively, the “
Lenders ”), ABLECO FINANCE LLC, a Delaware
limited liability company (“ Ableco ”), as
collateral agent for the Lenders (in such capacity, together with
any successor collateral agent, the “ Collateral Agent
”), and GMAC COMMERCIAL FINANCE LLC (“
GMAC ”), as administrative agent for the Lenders (in
such capacity, together with any successor administrative agent,
the “ Administrative Agent ” and together with
the Collateral Agent, each an “ Agent ” and
collectively, the “ Agents ”).
RECITALS
WHEREAS,
Parent, the UK Borrower, each subsidiary of the Parent listed on
the signature pages thereto (such subsidiaries, together with
Parent and UK Borrower, each a “ Loan Party ”
and collectively the “ Loan Parties ”), the
Agents, and the Lenders are parties to that certain Financing
Agreement, dated as of March 30, 2007 (as amended, restated,
supplemented or otherwise modified from time to time, the “
Financing Agreement ”);
WHEREAS,
Parent has informed Agents that the Loan Parties have failed to
comply with each of the financial covenants set forth in
Section 7.03 of the Financing Agreement for the fiscal
period ending on September 30, 2007 (the “ Designated
Events of Default ”); and
WHEREAS,
the Loan Parties have requested that the Lenders amend the
Financing Agreement, in each case as provided below, and the
Lenders are willing to accommodate the Loan Parties’
requests, but only on the terms and subject to the conditions
specified herein.
NOW,
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Definitions . Capitalized terms used
herein and not otherwise defined herein shall have the meanings
ascribed to them in the Financing Agreement, as amended
hereby.
2. Waiver . Subject to the terms and
conditions hereof, Agents and the Required Lenders hereby waive the
Designated Events of Default as of September 30, 2007. The
waiver herein is limited to the specifics hereof, shall not apply
with respect to any Default or Event of Default other than the
Designated Events of Default, or any other facts or occurrences
other than those on which the same are based, shall not excuse
future non-compliance with the Financing Agreement or the other
Loan Documents, and, except as expressly set forth herein, shall
not operate as a waiver or an amendment of any right, power, or
remedy of any Agent or any Lender, nor as a consent to or waiver of
any further or other matter, under the Loan Documents.
3. Amendments To Financing Agreement
.
(a) Effective as of
October 1, 2007, Section 2.04(b)(i) of the
Financing Agreement is hereby amended and restated in its entirety
as follows:
“The
Term Loan A shall bear interest on the principal amount thereof
from time to time outstanding, from the date of the making of the
Term Loan A until the date on which such principal amount is repaid
in accordance herewith, as follows: (i) if the relevant
portion of the Term Loan A is a LIBOR Rate Loan, at a rate per
annum equal to the LIBOR Rate plus 3.35 percentage points, and
(ii) otherwise, at a rate per annum equal to the Reference
Rate plus 0.85 percentage points.”
(b) Effective as of
October 1, 2007, Section 2.04(b)(ii) of the
Financing Agreement is hereby amended and restated in its entirety
as follows:
“The
Term Loan B shall bear interest on the principal amount thereof
from time to time outstanding, from the date of the making of the
Term Loan B until the date on which such principal amount is repaid
in accordance herewith, as follows: (i) if the relevant
portion of the Term Loan B is a LIBOR Rate Loan, at a rate per
annum equal to the LIBOR Rate plus 5.20 percentage points, and
(ii) otherwise, at a rate per annum equal to the Reference
Rate plus 2.95 percentage points.”
4. Waiver Fee . Parent hereby agrees to
pay to Collateral Agent, solely for the ratable benefit of the Term
Loan A Lenders, the US Term Loan B Lenders, and the UK Term Loan B
Lenders in accordance with their respective Pro Rata Shares (and
not for the account of any other Lender), a waiver fee in an amount
equal to $225,000 (the “ Waiver Fee ”) which
shall be fully earned and due and payable in full in immediately
available funds on the date hereof and shall be non-refundable when
paid.
5. Reaffirmation .
(a) Borrower . US
Borrower and UK Borrower each hereby reaffirms its obligations
under each Loan Document to which it is a party. US Borrower and UK
Borrower each hereby further ratifies and reaffirms the validity
and enforceability of all of the Liens and security interests
heretofore granted, pursuant to and in connection with the Security
Agreement or any other Loan Document to the Collateral Agent, on
behalf and for the benefit of each Agent and Lender, as collateral
security for the obligations under the Loan Documents in accordance
with their respective terms, and acknowledges that all of such
liens and security interests, and all collateral heretofore pledged
as security for such obligations, continues to be and remain
collateral for such obligations from and after the date
hereof.
(b) Guarantor . Each
Guarantor hereby (i) consents to this Amendment; (ii)
acknowledges and reaffirms all obligations owing by it to the
Agents and Lenders under any Loan Document to which it is a party
and represents and warrants that, after giving effect to the
Amendment, all of its representations and warranties contained in
the Loan Documents to which such Guarantor is a party are true,
accurate and complete in all material respects (except that such
materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or
modified by materiality in the text thereof) as if made the date
hereof
2
(unless
any such representation or warranty is expressly made as of a
specific date, in which event it shall be true, accurate and
complete as of such specified date), (iii) agrees that each
Loan Document to which it is a party is and shall remain in full
force and effect and shall not be impaired or otherwise affected by
the execution of the Amendment or any other document or instrument
delivered in connection herewith, (iv) ratifies and reaffirms
the validity and enforceability of all of the liens and security
interests heretofore granted by it, pursuant to and in connection
with the Security Agreement and any other Loan Document to which
such Guarantor is a party, to the Collateral Agent, on behalf and
for the benefit of each Agent and Lender, as collateral security
for the Guaranteed Obligations of such Guarantor, and acknowledges
that all of such liens and security interests, and all collateral
heretofore pledged as security for such obligations, continues to
be and remain collateral for such obligations from and after the
date hereof, and (v) ratifies and confirms its consent to any
previous amendments of the Financing Agreement and any previous
waivers granted with respect to the Financing Agreement. Although
each of the Guarantors have been informed of the matters set forth
herein and have acknowledged and agreed to same, each of the
Guarantors understands that the Agents and the Lenders shall have
no obligation to inform the Guarantors of such matters in the
future or to seek the Guarantors’ acknowledgement or
agreement to future amendments, waivers, or modifications, and
nothing herein shall create such a duty.
6. General Release . The Agents, the
Lenders and the Loan Parties desire to resolve each and every one
of any Claims (as such term is defined below) that the Loan Parties
may have (if any) in conjunction with the execution of this
Amendment and thus each Loan Party makes the release contained in
this Section. In consideration of Agents’ and Lenders’
entering into this Amendment and agreeing to the substantial
concessions as set forth herein, each Loan Party, for itself and on
behalf of its successors, assigns, limited partners, general
partners, investors, Subsidiaries, shareholders, trustees,
officers, directors, employees, agents and attorneys, and any
Person acting for or on behalf of, or claiming through, it, hereby
fully and unconditionally releases, remises and forever discharges
each Agent, each Lender, their respective Affiliates and Related
Funds, and each of their respective successors in title, past,
present and future directors, officers, employees, subsidiaries,
branches, affiliates, attorneys, agents, representatives,
successors and assigns and all Persons, firms, corporations and
organizations acting on any of their behalves (collectively, the
“ Released Parties ”), of and from any and all
claims, allegations, causes of action, suits, Liens, lawsuits,
adverse consequences, damages, losses, amounts paid in settlement,
debts, deficiencies, diminution in value, disbursements
|
