EXHIBIT 10.1
Ableco Finance LLC
299 Park Avenue, 23rd Floor
New York, New York 10171
                                                                 
                                        as of May 3, 2007
LOUD TECHNOLOGIES INC.
16220 Wood-Red Road NE
Woodinville, Washington 98072
Attention: Tim O’Neil, Chief Financial Officer
Ladies and Gentlemen:
     LOUD Technologies Inc., a Washington corporation (“Parent” or “US
Borrower”), Grace Acquisitionco Limited, a company incorporated under the laws
of England and Wales with registered number 06078534 (“UK Borrower”), and GMAC
Commercial Finance LLC (“GMAC”), as administrative agent for the Lenders (in
such capacity, together with any successor administrative agent, the
“Administrative Agent”) have entered into financing arrangements pursuant to
which Administrative Agent and Lenders (as defined below) have made and may make
loans and advances as set forth in that certain Financing Agreement, dated as of
March 30, 2007, by and among US Borrower and UK Borrower, each subsidiary of the
Parent listed on the signature pages thereto (together with US Borrower UK
Borrower, each a “Loan Party” and collectively the “Loan Parties”), the lenders
from time to time party thereto (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 Administrative Agent,
(together with the Collateral Agent, each an “Agent” and collectively, the
“Agents”) (as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, the “Loan Agreement”).
Initially capitalized terms used herein but not defined herein shall have the
respective meanings ascribed thereto in the Loan Agreement.
     Parent has informed Agents that US Borrower is unable to deliver to Agents
(i) the March monthly financial certificate (the “Monthly Financial
Deliverable”) by April 30, 2007 (the “Monthly Financial Deliverable Deadline”)
as required by Section 7.01(a)(iii) of the Loan Agreement (the “Designated
Monthly Financial Deliverable Requirement”) and (ii) the control agreement
relating to the Blocked Accounts (the “Blocked Account Deliverable”; and
together with the Monthly Financial Deliverable, collectively, the
“Deliverables”) on or prior to the date that is 30 days after the Effective Date
(the “Blocked Account Deliverable Deadline”; and together with the Monthly
Financial Deliverable Deadline, collectively, the “Delivery Deadlines”) as
required by Section 8.01(a) of the Loan Agreement (the “Designated Blocked
Account Deliverable Requirement”; and together with the Designated Monthly
Financial Deliverable Requirement, the “Designated Events of Default”).

 

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     Parent has requested that Agents consent to the extension of the Delivery
Deadlines with respect to the Deliverables as set forth herein. Agents are
willing to grant the requested extension on the terms and conditions set forth
herein.
     Accordingly, Agents and Parent hereby agree that (i) the Monthly Financial
Deliverable Deadline with respect to the Monthly Financial Deliverable hereby is
extended to May 15, 2007, and (ii) the Blocked Account Deliverable Deadline with
respect to the Blocked Account Deliverable hereby is extended to May 15, 2007.
     Subject to the terms and conditions hereof, Agents and the Lenders hereby
waive the Designated Events of Default. 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 Loan 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 Agent or the Lenders, nor as a
consent to or waiver of any further or other matter, under the Loan Documents.
     Parent hereby represents and warrants that (a) the execution, delivery, and
performance of this letter are within its corporate powers, have been duly
authorized by all necessary corporate action, and are not in contravention of
any law, rule, or regulation, or any order, judgment, decree, writ, injunction,
or award of any arbitrator, court, or governmental authority, or of the terms of
its charter or bylaws, or of any contract or undertaking to which it is a party
or by which any of its properties may be bound or affected, (b) the
representations and warranties in the Loan Agreement and the other Loan
Documents are true and correct in all respects 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), and (c) other than the Designated
Events of Default, no Default or Event of Default has occurred and is continuing
on the date hereof.
     Except as expressly set forth herein, this letter shall not, by implication
or otherwise, limit, impair, constitute a waiver of, or otherwise affect the
rights and remedies of Agent or any Lender under the Loan Agreement or any other
Loan Document, and shall not alter, modify, amend or in any way affect any of
the terms, conditions, obligations, covenants or agreements contained in the
Loan Agreement or any other Loan Document, all of which are ratified and
affirmed in all respects and shall continue in full force and effect.
     This letter shall constitute a Loan Document, and, after the date hereof,
any reference to the “Loan Agreement” or this “Agreement,” in the Loan Agreement
or any other Loan Document, shall mean the Loan Agreement as modified hereby.
This letter shall be subject to the provisions regarding governing law, waiver
of jury trial, jurisdiction and venue applicable to the Loan Agreement.
     This letter may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument. Delivery of an executed counterpart of this letter by
telefacsimile or other electronic method shall be equally as effective

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as delivery of an original executed counterpart of this letter. Any party
delivering an executed counterpart of this letter by telefacsimile or other
electronic method shall also deliver an original executed counterpart of this
letter, but the failure to do so shall not affect the validity, enforceability
or binding effect of this letter.
[Remainder of Page Intentionally Left Blank]

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     Please indicate your agreement with the foregoing by signing in the space
provided below.

                  Very truly yours,    
 
                ABLECO FINANCE LLC,
as Collateral Agent, and on behalf of itself, and its affiliate assigns, as
Lenders    
 
           
 
  By:   /s/ Daniel E. Wolf    
 
           
 
           
 
  Title:   President    
 
           
 
                GMAC COMMERCIAL FINANCE LLC,
as Administrative Agent and as a Lender    
 
           
 
  By:        
 
           
 
           
 
  Title:        
 
     
 
   

[SIGNATURE PAGE TO WAIVER AND EXTENSION LETTER]

 

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     Please indicate your agreement with the foregoing by signing in the space
provided below.

              Very truly yours,
 
            ABLECO FINANCE LLC,
as Collateral Agent, and on behalf of itself, and its affiliate assigns, as
Lenders
 
       
 
  By:    
 
       
 
       
 
  Title:    
 
       
 
            GMAC COMMERCIAL FINANCE LLC,
as Administrative Agent and as a Lender
 
       
 
  By:   /s/ Christopher Gauch
 
       
 
       
 
  Title:   Senior Managing Director
 
       

[SIGNATURE PAGE TO WAIVER AND EXTENSION LETTER]

 

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                  FORTRESS CREDIT FUNDING I LP, as a Lender    
 
           
 
  By:   Fortress Credit Funding I GP LLC, its general partner    
 
           
 
  By:   /s/ Constantine Dakolias    
 
           
 
  Title:   CHIEF CREDIT OFFICER    
 
           
 
                FORTRESS CREDIT FUNDING II LP,
as a Lender    
 
           
 
  By:   Fortress Credit Funding II GP LLC, its general partner    
 
           
 
  By:   /s/ Constantine Dakolias    
 
           
 
  Title:   CHIEF CREDIT OFFICER    
 
           
 
                FORTRESS CREDIT FUNDING III LP, as a Lender    
 
           
 
  By:   Fortress Credit Funding III GP LLC, its general partner    
 
           
 
  By:   /s/ Constantine Dakolias    
 
           
 
  Title:   CHIEF CREDIT OFFICER    
 
           
 
                FORTRESS CREDIT FUNDING IV LP, as a Lender    
 
           
 
  By:   Fortress Credit Funding IV GP LLC, its general partner    
 
           
 
  By:   /s/ Constantine Dakolias    
 
           
 
  Title:   CHIEF CREDIT OFFICER    
 
     
 
   

[SIGNATURE PAGE TO WAIVER AND EXTENSION LETTER]

 

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                  FORTRESS CREDIT OPPORTUNITIES I LP,
as a Lender    
 
           
 
  By:   Fortress Credit Opportunities I GP LLC,
its general partner    
 
           
 
  By:   /s/ Constantine Dakolias    
 
           
 
  Title:   CHIEF CREDIT OFFICER    
 
     
 
   
 
                FORTRESS CREDIT OPPORTUNITIES II LP,
as a Lender    
 
           
 
  By:   Fortress Credit Oportunities II GP LLC,
its general partner    
 
           
 
  By:   /s/ Constantine Dakolias    
 
           
 
  Title:   CHIEF CREDIT OFFICER    
 
     
 
   
 
                FCCD LIMITED,
as a Lender    
 
           
 
  By:   /s/ Constantine Dakolias    
 
           
 
  Title:   CHIEF CREDIT OFFICER    
 
     
 
    

[SIGNATURE PAGE TO WAIVER AND EXTENSION LETTER]

 

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          ACKNOWLEDGED AND AGREED TO BY:    
 
        LOUD TECHNOLOGIES INC.,
as US Borrower    
 
       
By:
  /s/ Timothy P. O’Neil    
 
       
 
       
Title:
  CFO    
 
 
 
    
 
        GRACE ACQUISITIONCO LIMITED,
as UK Borrower    
 
       
By:
  /s/ Timothy P. O’Neil    
 
       
 
       
Title:
  VP-Director    
 
 
 
    
 
        LOUD TECHNOLOGIES EUROPE PLC,
as a Foreign Guarantor    
 
       
By:
  /s/ James T. Engen    
 
       
 
       
Title:
  Director    
 
 
 
    
 
        MACKIE DESIGNS INC.,
as a US Guarantor    
 
       
By:
  /s/ Timothy P. O’Neil    
 
       
 
       
Title:
  VP    
 
 
 
    
 
        SIA SOFTWARE COMPANY, INC.,
as a US Guarantor    
 
       
By:
  /s/ Timothy P. O’Neil    
 
       
 
       
Title:
  VP    
 
 
 
    

[SIGNATURE PAGE TO WAIVER AND EXTENSION LETTER]

 

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          SLM HOLDING CORP.,
as a US Guarantor    
 
       
By:
  /s/ Timothy P. O’Neil    
 
       
 
       
Title:
  VP    
 
 
 
    
 
        ST. LOUIS MUSIC, INC.,
as a US Guarantor    
 
       
By:
  /s/ Timothy P. O’Neil    
 
       
 
       
Title:
  VP    
 
 
 
    

[SIGNATURE PAGE TO WAIVER AND EXTENSION LETTER]