AMENDMENT NO. 1 TO FINANCING AGREEMENT
EXHIBIT
10.1
AMENDMENT NO. 1 TO FINANCING AGREEMENT
This AMENDMENT NO. 1 TO FINANCING AGREEMENT (this “Amendment”), dated as of May 24,
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”); 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. Amendments To Financing Agreement.
(a) The definition of “TTM EBITDA” in Section 1.01 of the Financing Agreement is
hereby amended and restated in its entirety as follows:
”“TTM EBITDA” means, as of any date of determination and with respect to a Person, the
Consolidated EBITDA of such Person and its Subsidiaries for the period of 12 consecutive months
most recently ended; provided, however, that (a) in the case of the First Test
Period, TTM EBITDA shall be calculated as (i) the Consolidated EBITDA of such Person and its
Subsidiaries for the period from and after May 1, 2007 up to and including the last day of the
First Test Period, times (ii) 6.00, (b) in the case of the Second Test Period, TTM EBITDA shall be
calculated as (i) the Consolidated EBITDA of such Person and its Subsidiaries for the period from
and after May 1, 2007 up to and including the last day of the Second Test Period, times (ii) 2.40,
(c) in the case of the Third Test Period, TTM EBITDA shall be calculated as (i) the
Consolidated EBITDA of such Person and its Subsidiaries for the period from and after May 1, 2007
up to and including the last day of the Third Test Period, times (ii) 1.50, and (d) in the case of
the Fourth Test Period, TTM EBITDA shall be calculated as (i) the Consolidated EBITDA of such
Person and its Subsidiaries for the period from and after May 1, 2007 up to and including the last
day of the Fourth Test Period, times (ii) 1.09.”
(b) The definition of “Fixed Charge Coverage Ratio” appearing in Section 1.01 of the
Financing Agreement is hereby amended and restated in its entirety as follows:
““Fixed Charge Coverage Ratio” means, with respect to any Person for any period, the
ratio of (i) the TTM EBITDA of such Person and its Subsidiaries calculated as of the last day of
such period, minus the sum of (A) TTM Capital Expenditures made by such Person and its
Subsidiaries calculated as of the last day of such period plus (B) the TTM Income Tax
Liabilities calculated as of the last day of such period, to the extent that such amount is
greater than zero to (ii) TTM Fixed Charges calculated as of the last day of such period.”
(c) Section 1.01 of the Financing Agreement is hereby amended by adding the
following new definitions in the appropriate alphabetical order:
““First Test Period” means the period ended on June 30, 2007.”
““Second Test Period” means the period ended on September 30, 2007.”
““Third Test Period” means the period ended on December 31, 2007.”
““Fourth Test Period” means the period ended on March 31, 2008.”
““Second Test Period” means the period ended on September 30, 2007.”
““Third Test Period” means the period ended on December 31, 2007.”
““Fourth Test Period” means the period ended on March 31, 2008.”
““TTM Capital Expenditures” means, as of any date of determination and with respect to
a Person, the Capital Expenditures of such Person and its Subsidiaries for the 12 consecutive
months most recently ended; provided, however, that (a) in the case of the First
Test Period, TTM Capital Expenditures shall be calculated as (i) the Capital Expenditures of such
Person and its Subsidiaries for the period from and after May 1, 2007 up to and including the last
day of the First Test Period, times (ii) 6.00, (b) in the case of the Second Test Period, TTM
Capital Expenditures shall be calculated as (i) the Capital Expenditures of such Person and its
Subsidiaries for the period from and after May 1, 2007 up to and including the last day of the
Second Test Period, times (ii) 2.40, (c) in the case of the Third Test Period, TTM Capital
Expenditures shall be calculated as (i) the Capital Expenditures of such Person and its
Subsidiaries for the period from and after May 1, 2007 up to and including the last day of the
Third Test Period, times (ii) 1.50, and (d) in the case of the Fourth Test Period, TTM Capital
Expenditures shall be calculated as (i) the Capital Expenditures of such Person and its
Subsidiaries for the period from and after May 1, 2007 up to and including the last day of the
Fourth Test Period, times (ii) 1.09.”
““TTM Fixed Charges” means, as of any date of determination and with respect to a
Person for the 12 consecutive months most recently ended, the sum of (A) all principal of
Indebtedness of such Person and its Subsidiaries scheduled to be paid during such period (excluding
the amount of any prepayments of such Indebtedness that were made in prior periods), plus
(B) Consolidated Net Interest Expense of such Person and its Subsidiaries for such
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period, plus (C) cash dividends or distributions paid by such Person and its Subsidiaries
(other than, in the case of the Parent, dividends or distributions paid to the Parent or its
wholly-owned Subsidiaries) for such period; provided, however, that (a) in the case
of the First Test Period, TTM Fixed Charges shall be calculated as (i) the sum of (A) all principal
of Indebtedness of such Person and its Subsidiaries scheduled to be paid for the period from and
after May 1, 2007 up to and including the last day of the First Test Period (excluding the amount
of any prepayments of such Indebtedness that were made in prior periods), plus (B)
Consolidated Net Interest Expense of such Person and its Subsidiaries for the period from and after
May 1, 2007 up to and including the last day of the First Test Period, plus (C) cash
dividends or distributions paid by such Person and its Subsidiaries (other than, in the case of the
Parent, dividends or distributions paid to the Parent or its wholly-owned Subsidiaries) for the
period from and after May 1, 2007 up to and including the last day of the First Test Period, times
(ii) 6.00, (b) in the case of the Second Test Period, TTM Fixed Charges shall be calculated as (i)
the sum of (A) all principal of Indebtedness of such Person and its Subsidiaries scheduled to be
paid for the period from and after May 1, 2007 up to and including the last day of the Second Test
Period (excluding the amount of any prepayments of such Indebtedness that were made in prior
periods), plus (B) Consolidated Net Interest Expense of such Person and its Subsidiaries
for the period from and after May 1, 2007 up to and including the last day of the Second Test
Period, plus (C) cash dividends or distributions paid by such Person and its Subsidiaries
(other than, in the case of the Parent, dividends or distributions paid to the Parent or its
wholly-owned Subsidiaries) for the period from and after May 1, 2007 up to and including the last
day of the Second Test Period, times (ii) 2.40, (c) in the case of the Third Test Period, TTM Fixed
Charges shall be calculated as (i) the sum of (A) all principal of Indebtedness of such Person and
its Subsidiaries scheduled to be paid for the period from and after May 1, 2007 up to and including
the last day of the Third Test Period (excluding the amount of any prepayments of such Indebtedness
that were made in prior periods), plus (B) Consolidated Net Interest Expense of such Person
and its Subsidiaries for the period from and after May 1, 2007 up to and including the last day of
the Third Test Period, plus (C) cash dividends or distributions paid by such Person and its
Subsidiaries (other than, in the case of the Parent, dividends or distributions paid to the Parent
or its wholly-owned Subsidiaries) for the period from and after May 1, 2007 up to and including the
last day of the Third Test Period, times (ii) 1.50, and (d) in the case of the Fourth Test Period,
TTM Fixed Charges shall be calculated as (i) the sum of (A) all principal of Indebtedness of such
Person and its Subsidiaries scheduled to be paid for the period from and after May 1, 2007 up to
and including the last day of the Fourth Test Period (excluding the amount of any prepayments of
such Indebtedness that were made in prior periods), plus (B) Consolidated Net Interest
Expense of such Person and its Subsidiaries for the period from and after May 1, 2007 up to and
including the last day of the Fourth Test Period, plus (C) cash dividends or distributions
paid by such Person and its Subsidiaries (other than, in the case of the Parent, dividends or
distributions paid to the Parent or its wholly-owned Subsidiaries) for the period from and after
May 1, 2007 up to and including the last day of the Fourth Test Period, times (ii) 1.09.”
““TTM Income Tax Liabilities” means, as of any date of determination and with respect
to a Person, all income tax liabilities (after the application of any refunds or credits) of such
Person and its Subsidiaries for the 12 consecutive months most recently ended; provided,
however, that (a) in the case of the First Test Period, TTM Income Tax Liabilities shall
be calculated as (i) all income tax liabilities (after the application of any refunds or credits)
of such Person and its Subsidiaries for the period from and after May 1, 2007 up to and including
the last
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day of the First Test Period, times (ii) 6.00, (b) in the case of the Second Test Period, TTM
Income Tax Liabilities shall be calculated as (i) all income tax liabilities (after the
application of any refunds or credits) of such Person and its Subsidiaries for the period from and
after May 1, 2007 up to and including the last day of the Second Test Period, times (ii) 2.40, (c)
in the case of the Third Test Period, TTM Income Tax Liabilities shall be calculated as (i) all
income tax liabilities (after the application of any refunds or credits) of such Person and its
Subsidiaries for the period from and after May 1, 2007 up to and including the last day of the
Third Test Period, times (ii) 1.50, and (d) in the case of the Fourth Test Period, TTM Income Tax
Liabilities shall be calculated as (i) all income tax liabilities (after the application of any
refunds or credits) of such Person and its Subsidiaries for the period from and after May 1, 2007
up to and including the last day of the Fourth Test Period, times (ii) 1.09.”
3. First Amendment Fee. Parent hereby agrees to pay to Collateral Agent for the ratable
benefit of the Lenders an amendment fee in an amount equal to $75,000 (the “First Amendment
Fee”) which shall fully earned and due and payable in full in immediately available funds on
the date hereof and shall be non-refundable when paid.
4. Limited Amendments; Full Force And Effect. The amendments set forth in Section 2
of this Amendment shall be limited precisely as written and shall not be deemed (a) to be an
amendment of any other term or condition of the Financing Agreement or the other Loan Documents,
to prejudice any right or remedy which the Agents or the Lenders may now have or may have in the
future under or in connection with the Financing Agreement or the other Loan Documents or (b) to
be a consent or waiver to any future amendment or departure from the terms and conditions of the
Financing Agreement or the other Loan Documents. This Amendment shall be construed in connection
with and as part of the Loan Documents, and all terms, conditions, representations, warranties,
covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby
ratified and confirmed and shall remain in full force and effect.
5. Representations And Warranties. Each Loan Party hereby represents and warrants to each
Agent and each Lender as follows:
(a) Each has the requisite power and authority to execute and deliver this Amendment and to
perform its obligations hereunder and under the Loan Documents to which it is a party. The
articles of organization and operating agreement of each Loan Party have not been amended since
the Effective Date;
(b) The execution, delivery, and performance by each Loan Party of this Amendment and the
performance by it of each Loan Document to which it is a party (i) have been duly authorized by all
necessary action, (ii) do not and will not contravene its charter or by-laws, its limited liability
company or operating agreement or its certificate of partnership or partnership agreement, as
applicable, or any applicable law or any contractual restriction binding on or otherwise affecting
it or any of its properties, (iii) do not and will not result in or require the creation of any
Lien (other than pursuant to any Loan Document) upon or with respect to any of its properties, and
(iv) do not and will not result in any default, noncompliance, suspension, revocation, impairment,
forfeiture or nonrenewal of any permit, license, authorization or approval applicable to its
operations or any of its properties, except where any such default,
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noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal could not reasonably
be expected to result in a Material Adverse Effect;
(c) This Amendment has been duly executed and delivered by each Loan Party. This Amendment
and each Loan Document is the legal, valid and binding obligation of each Loan Party, enforceable
against such Loan Party in accordance with its terms, and is in full force and effect, except as
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws;
(d) The execution, delivery and performance by each Loan Party of this Amendment and the
performance by each Loan Party of the Financing Agreement as amended hereby do not and will not
require any authorization or approval of, or other action by, or notice to or filing with any
Governmental Authority or regulatory body or the consent of any third party which has not yet been
obtained;
(e) No injunction, writ, restraining order, or other order of any nature prohibiting,
directly or indirectly, the consummation of the transactions contemplated herein has been issued
and remains in force by any Governmental Authority against any Loan Party, either Agent or any
Lender;
(f) After giving effect to this Amendment, no event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this Amendment that would
constitute a Default or an Event of Default; and
(g) After giving effect to this Amendment, the representations and warranties in the
Financing Agreement and the other Loan Documents are true and correct 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) on and as of
the date hereof, as though made on such date (except to the extent that such representations and
warranties relate solely to an earlier date).
6. Conditions Precedent To Amendment
The satisfaction of each of the following shall constitute conditions precedent to the
effectiveness of this Amendment and each and every provision hereof (the date of such effectiveness
being herein called the “First Amendment Effective Date”):
(a) Collateral Agent shall have received this Amendment, duly executed and delivered by the
parties hereto, and the same shall be in full force and effect;
(b) Collateral Agent shall have received payment in full in immediately available funds of
the First Amendment Fee;
(c) The representations and warranties herein and in the Financing Agreement and the other
Loan Documents shall be true and correct 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) on and as of the date hereof, as though
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made on such date (except to the extent that such representations and warranties relate solely to
an earlier date);
(d) No Default or Event of Default shall have occurred and be continuing on the date hereof;
and
(e) No injunction, writ, restraining order, or other order of any nature prohibiting,
directly or indirectly, the consummation of the transactions contemplated herein shall have been
issued and remain in force by any Governmental Authority against the Borrower, any Guarantor, any
Agent, or any Lender.
7. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF
NEW YORK.
8. Entire Amendment; Effect Of Amendment. This Amendment, and the terms and provisions
hereof, constitute the entire agreement among the parties pertaining to the subject matter hereof
and supersedes any and all prior or contemporaneous amendments relating to the subject matter
hereof. Except for the amendments to the Financing Agreement expressly set forth in Section
2 hereof, the Financing Agreement and other Loan Documents shall remain unchanged and in full
force and effect. To the extent any terms or provisions of this Amendment conflict with those of
the Financing Agreement or other Loan Documents, the terms and provisions of this Amendment shall
control. This Amendment is a Loan Document. The amendments set forth herein are limited to the
specifics hereof, shall not apply with respect to any 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 shall not operate as a consent to or waiver of any other matter
under the Loan Documents.
9. Headings. Section and subsection headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment for any other
purpose or be given any substantive effect.
10. Counterparts; Telecopy Execution. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same instrument and any of
the parties hereto may execute this Amendment by signing any such counterpart. Delivery of an
executed counterpart of this Amendment by telecopy shall be equally as effective as delivery of an
original executed counterpart of this Amendment. Any party delivering an executed counterpart of
this Amendment by telecopy also shall deliver an original executed counterpart of this Amendment,
but the failure to deliver an original executed counterpart shall not affect the validity,
enforceability, and binding effect of this Amendment.
11. Miscellaneous.
(a) Upon the effectiveness of this Amendment, each reference in the Financing Agreement to
“this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the
Financing Agreement shall mean and refer to the Financing Agreement as amended by this Amendment.
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(b) Upon the effectiveness of this Amendment, each reference in the Loan Documents to the
“Financing Agreement”, “thereunder”, “therein”, “thereof” or words of like import referring to the
Financing Agreement shall mean and refer to the Financing Agreement as amended by this Amendment.
(c) Except as expressly provided herein, (i) the Agents and the Lenders hereby reserve all
remedies, powers, rights, and privileges that the Agents and the Lenders may have under the
Financing Agreement or the other Loan Documents, at law (including under the Code), in equity, or
otherwise; (ii) all terms, conditions, and provisions of the Financing Agreement and the other
Loan Documents are and shall remain in full force and effect; and (iii) nothing herein shall
operate as a consent to or a waiver, amendment, or forbearance in respect of any matter (including
any Event of Default whether presently existing or subsequently occurring) or any other right,
power, or remedy of the Agents or the Lenders under the Financing Agreement and the other Loan
Documents. No delay on the part of the Agents and the Lenders in the exercise of any remedy,
power, right or privilege shall impair such remedy, power, right, or privilege or be construed to
be a waiver of any default, nor shall any partial exercise of any such remedy, power, right or
privilege preclude further exercise thereof or of any other remedy, power, right or privilege.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered as of
the date first written above.
| LOAN PARTIES: LOUD TECHNOLOGIES INC., a Washington corporation, as US Borrower and as a US Guarantor |
||||
| By: | /s/ Xxxxxxx X. X’Xxxx | |||
| Name: | Xxxxxxx X. X’Xxxx | |||
| Title: | CFO | |||
| GRACE ACQUISITIONCO LIMITED, a company organized under the laws of England and Wales, as UK Borrower |
||||
| By: | /s/ Xxxxxxx X. X’Xxxx | |||
| Name: | Xxxxxxx X. X’Xxxx | |||
| Title: | VP | |||
| LOUD TECHNOLOGIES EUROPE PLC, a company organized under the laws of England and Wales, as a Foreign Guarantor |
||||
| By: | /s/ Xxxxx X. Xxxxx | |||
| Name: | Xxxxx X. Xxxxx | |||
| Title: | Director | |||
| MACKIE DESIGN INC., a Washington corporation, as a US Guarantor |
||||
| By: | /s/ Xxxxxxx X. X’Xxxx | |||
| Name: | Xxxxxxx X. X’Xxxx | |||
| Title: | VP | |||
[SIGNATURE PAGE TO AMENDMENT NO. 1 TO FINANCING AGREEMENT]
| SIA SOFTWARE COMPANY INC., a New York corporation, as a US Guarantor |
||||
| By: | /s/ Xxxxxxx X. X’Xxxx | |||
| Name: | Xxxxxxx X. X’Xxxx | |||
| Title: | VP | |||
| SLM HOLDING CORP., a Delaware corporation, as a US Guarantor |
||||
| By: | /s/ Xxxxxxx X. X’Xxxx | |||
| Name: | Xxxxxxx X. X’Xxxx | |||
| Title: | VP | |||
| ST. LOUIS MUSIC, INC., a Missouri corporation, as a US Guarantor |
||||
| By: | /s/ Xxxxxxx X. X’Xxxx | |||
| Name: | Xxxxxxx X. X’Xxxx | |||
| Title: | VP | |||
[SIGNATURE PAGE TO AMENDMENT NO. 1 TO FINANCING AGREEMENT]
| ABLECO FINANCE LLC, as Collateral Agent, and on behalf of itself and its affiliates as Lenders |
||||
| By: | /s/ Xxxxxx X. Xxxx | |||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | President | |||
[SIGNATURE PAGE TO AMENDMENT NO. 1 TO FINANCING AGREEMENT]
| GMAC COMMERCIAL FINANCE LLC, as Administrative Agent and as a Lender |
||||
| By: | /s/ Xxxxxxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxxxxxx X. Xxxxx | |||
| Title: | Vice President | |||
[SIGNATURE PAGE TO AMENDMENT NO. 1 TO FINANCING AGREEMENT]
| FORTRESS CREDIT FUNDING I LP, | ||||
| as a Lender | ||||
| By: | Fortress Credit Funding I GP LLC, | |||
| its general partner | ||||
| By: | /s/ Xxxxxxxxxxx Xxxxxxxx | |||
| Title: | ||||
| FORTRESS CREDIT FUNDING II LP, | ||||
| as a Lender | ||||
| By: | Fortress Credit Funding II GP LLC, | |||
| its general partner | ||||
| By: | /s/ Xxxxxxxxxxx Xxxxxxxx | |||
| Title: | ||||
| FORTRESS CREDIT FUNDING III LP, | ||||
| as a Lender | ||||
| By: | Fortress Credit Funding III GP LLC, | |||
| its general partner | ||||
| By: | /s/ Xxxxxxxxxxx Xxxxxxxx | |||
| Title: | ||||
| FORTRESS CREDIT FUNDING IV LP, | ||||
| as a Lender | ||||
| By: | Fortress Credit Funding IV GP LLC, | |||
| its general partner | ||||
| By: | /s/ Xxxxxxxxxxx Xxxxxxxx | |||
| Title: | ||||
[SIGNATURE PAGE TO AMENDMENT NO. 1 TO FINANCING AGREEMENT]
| FORTRESS CREDIT OPPORTUNITIES I LP, | ||||
| as a Lender | ||||
| By: | Fortress Credit Opportunities I GP LLC, | |||
| its general partner | ||||
| By: | /s/ Xxxxxxxxxxx Xxxxxxxx | |||
| Title: | ||||
| FORTRESS CREDIT OPPORTUNITIES II LP, | ||||
| as a Lender | ||||
| By: | Fortress Credit Opportunities II GP LLC, | |||
| its general partner | ||||
| By: | /s/ Xxxxxxxxxxx Xxxxxxxx | |||
| Title: | ||||
| FCCD LIMITED, as a Lender | ||||
| By: | /s/ Xxxxxxxxxxx Xxxxxxxx | |||
| Title: | ||||
[SIGNATURE PAGE TO AMENDMENT NO. 1 TO FINANCING AGREEMENT]
