Exhibit 10.21

 

WAIVER AND CONSENT

 

WAIVER AND CONSENT, dated as of February 25, 2004 (“Waiver and Consent”), to the
Credit Agreement dated as of May 20, 2003 (the “Credit Agreement”), among MUZAK
HOLDINGS LLC (“Holdings”), MUZAK LLC as Borrower (the “Borrower”), the lenders
from time to time parties thereto (the “Lenders”), BEAR, STEARNS & CO. INC. and
LEHMAN BROTHERS INC., as Joint Lead Arrangers, LEHMAN COMMERCIAL PAPER INC. and
FLEET NATIONAL BANK, as Co-Syndication Agents, GENERAL ELECTRIC CAPITAL
CORPORATION, as Documentation Agent and BEAR STEARNS CORPORATE LENDING INC., as
Administrative Agent (“Administrative Agent”). Capitalized terms used and not
otherwise defined herein shall have the meanings assigned to them in the Credit
Agreement.

 

WHEREAS, Holdings, the Borrower and the Required Lenders have entered into a
waiver and consent, dated as of December 30, 2003 (the “Original Waiver”),
pursuant to which the Required Lenders consented to the sale of all of the
Borrower’s assets related to its closed circuit television business as
previously identified to the Required Lenders (the “CCTV Sale”);

 

WHEREAS, the CCTV Sale has not been consummated by January 31, 2004 as
contemplated by the Original Waiver and may not otherwise be consummated on the
terms set forth in the Original Waiver;

 

WHEREAS, the Borrower wishes to obtain the consent of the Required Lenders to
consummate the CCTV Sale in the future for aggregate consideration of not less
than $1.0 million (including the fair market value of any property received)
(the “CCTV Purchase Price”), which sale may be to Teknovation Corporation or to
any one or more other third parties selected by the Borrower and reasonably
acceptable to the Administrative Agent;

 

WHEREAS, pursuant to Section 10.1 of the Credit Agreement the consent of the
Required Lenders is necessary to effect this Waiver and Consent;

 

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NOW, THEREFORE, in consideration of the premises and covenants contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:

 

SECTION 1. CONSENT

 

Subject to the satisfaction of the conditions precedent set forth in Section 5
of this Waiver and Consent, the Required Lenders hereby consent to:

 

  (a) the consummation of the CCTV Sale to one or more third parties (including,
without limitation, Teknovation Corporation) that are not Affiliates of the
Borrower (or the Sponsors) and selected by Borrower and reasonably acceptable to
the Administrative Agent (collectively, the “Buyer”) for aggregate consideration
(including the fair market value (as determined in good faith by the Borrower)
of any property received) of not less than the CCTV Purchase Price, which may be
deferred in whole or in part in accordance with the definitive documentation
regarding the CCTV Sale (any such deferred amount, the “Deferred
Consideration”); provided that such Deferred Consideration shall be payable to
the Borrower on or prior to the third anniversary of the consummation of the
CCTV Sale;

 

  (b) the extension of credit by Borrower to Buyer represented by the Deferred
Consideration, if any; and

 

  (c) any actions performed by the Administrative Agent at the request of
Borrower having the effect of releasing Collateral to the extent necessary to
permit consummation of the CCTV Sale.

 

SECTION 2. WAIVER

 

Subject to the satisfaction of the conditions precedent set forth in Section 5
of this Waiver and Consent, the Required Lenders hereby waive:

 

  (a) any Default or Event of Default that may arise as a result of CCTV
Purchase Price exceeding the $1.0 million per fiscal year limit set forth in
Section 7.5(e) of the Credit Agreement; provided that the Purchase Price shall
count against the $5.0 million limitation provided in such section; and

 

  (b) any Default or Event of Default that may arise as a result of the Deferred
Consideration, if any, representing an extension of credit not permitted under
Section 7.8 of the Credit Agreement.

 

SECTION 3. ACKNOWLEDGEMENTS

 

  (a)

Nothing in this Waiver and Consent shall waive Section 7.5(e) of the Credit
Agreement in connection with the limitation upon the disposition of property
having a fair market value in excess of $5.0 million from May 20, 2003, and the
amount available to make Asset Sales pursuant to Section 7.5(e) of the

 

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Credit Agreement shall be permanently reduced by an amount equal to the CCTV
Purchase Price; and

 

  (b) The CCTV Sale shall constitute an Asset Sale, and the CCTV Purchase Price,
upon receipt from time to time thereof, shall constitute Net Cash Proceeds.
Pursuant to Section 3.2(b) of the Credit Agreement, Borrower (i) by execution of
this Waiver and Consent, shall be deemed to have delivered a Reinvestment Notice
on each date of receipt of such Net Cash Proceeds and (ii) shall reinvest such
Net Cash Proceeds as provided by the Credit Agreement; provided that any amount
of such Net Cash Proceeds not reinvested in accordance with the Credit Agreement
shall constitute a Reinvestment Prepayment Amount.

 

SECTION 4. REPRESENTATIONS AND WARRANTIES

 

  (a) Holdings, Borrower and their respective Subsidiaries have taken all
necessary action to authorize the execution, delivery and performance of this
Waiver and Consent.

 

  (b) The execution, delivery and performance of this Waiver and Consent will
not violate: (i) the Certificate of Incorporation and By-Laws or other
organizational or governing documents of Holdings, Borrower or any of their
respective Subsidiaries; (ii) any law, treaty, rule or regulation or
determination of an arbitrator or a court or other nation or government, any
state or other political subdivision thereof, any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative functions
of or pertaining to government, any securities exchange and any self-regulatory
or other organization (including the National Association of Insurance
Commissioners), in each case applicable to or binding upon Holdings, Borrower or
any of their respective Subsidiaries or any of their property to which they or
any of their property are subject; or (iii) any provision of any written
agreement, written instrument or other written undertaking to which Holdings,
Borrower or any of their respective Subsidiaries is a party or by which any of
their property is bound.

 

  (c) All of the representations and warranties in the Credit Agreement, after
giving effect to this Waiver and Consent, are true and correct in all material
respects on and as of the date hereof as if made on the date hereof (or, if any
such representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date).

 

  (d) After giving effect to the waivers described in Section 1 hereof, no
Default or Event of Default has occurred and is continuing.

 

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SECTION 5. CONDITIONS TO EFFECTIVENESS

 

The effectiveness of this Waiver and Consent is subject to the following
conditions precedent (unless specifically waived in writing by the
Administrative Agent), each to be in form and substance satisfactory to the
Administrative Agent:

 

  (a) Borrower shall have paid to the Lenders’ counsel all reasonable legal
costs, fees and expenses;

 

  (b) All corporate and other proceedings taken or to be taken in connection
with this Waiver and Consent and all documents incidental thereto, whether or
not referred to herein, shall be satisfactory in form and substance to the
Administrative Agent and its legal counsel;

 

  (c) The Administrative Agent shall have received duly executed counterparts of
this Waiver and Consent which, when taken together, bear the authorized
signatures of the Borrower, Holdings and the Required Lenders; and

 

  (d) After giving effect to the waivers described in Section 1 hereof, no
Default or Event of Default has occurred and is continuing.

 

SECTION 6. MISCELLANEOUS

 

  (a) This Waiver and Consent may be executed by the parties hereto in one or
more counterparts, each of which shall be an original and all of which shall
constitute one and the same agreement.

 

  (b) THIS WAIVER AND CONSENT SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS.

 

  (c) Except as expressly provided herein, this Waiver and Consent shall not
constitute a consent or waiver to or modification of any other provision, term
or condition of the Credit Agreement or any other Loan Document. All terms,
provisions, covenants, representations, warranties, agreements and conditions
contained in the Credit Agreement and the other Loan Documents are ratified and
confirmed in all respects and shall remain in full force and effect.

 

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Waiver and Consent to be
duly executed as of the date first above written.

 

MUZAK  LLC,
as Borrower

By:   /s/ Catherine Walsh    

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Name: Catherine Walsh

Title: Treasurer

 

MUZAK HOLDINGS LLC

By:   /s/ Catherine Walsh    

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Name: Catherine Walsh

Title: Treasurer

 

Waiver and Consent

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BEAR  STEARNS CORPORATE LENDING INC., as Administrative Agent and a Lender

By:   /s/ Victor Bulzacchelli    

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Name: Victor Bulzacchelli

Title: Authorized Agent

 

Waiver and Consent

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LEHMAN  COMMERCIAL PAPER INC.,

as  Lender

By:        

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Name:

Title:

 

Waiver and Consent

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FLEET  NATIONAL BANK,
as Lender

By:   /s/ Kay H. Campbell    

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Name: Kay H. Campbell

Title: Director

 

Waiver and Consent

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GENERAL  ELECTRIC CAPITAL CORPORATION, as Lender

By:   /s/ Bhupesh Gupta    

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Name: Bhupesh Gupta

Title: Duely Authorized Signatory

 

Waiver and Consent

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CANPARTNERS  INVESTMENTS IV, LLC,
as Lender

By:        

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Name:

Title:

 

Waiver and Consent

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CANYON  CAPITAL CLO 2004-1 LTD.,
as Lender

By:        

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Name:

Title:

 

Waiver and Consent

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GOLDENTREE  HIGH YIELD
OPPORTUNITIES I, L.P., as Lender

By:   /s/ Frederick S. Haddad    

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Name: Frederick S. Haddad

Title:

 

Waiver and Consent

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GOLDENTREE  HIGH YIELD
OPPORTUNITIES II, L.P., as Lender

By:   /s/ Frederick S. Haddad    

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Name: Frederick S. Haddad

Title:

 

Waiver and Consent

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