Exhibit
10.1


 


THIRD
AMENDMENT TO LOAN AND SECURITY AGREEMENT AND WAIVER


 


THIS THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT
AND WAIVER (“Amendment”) is made as of October 24, 2009 by and
among COBRA ELECTRONICS CORPORATION, a Delaware corporation (the “Borrower”),
THE PRIVATEBANK AND TRUST COMPANY, an Illinois state chartered bank, as
Administrative Agent (“Administrative Agent”) and the Lenders currently
party to the Loan Agreement (as hereinafter defined).


 


RECITALS


 


A.            The
Administrative Agent, the Lenders and the Borrower entered into a Loan and
Security Agreement dated as of February 15, 2008 as amended by First
Amendment to Loan and Security Agreement dated as of October 31, 2008 and
as further amended by Second Amendment to Loan and Security Agreement and
Waiver dated as of August 13, 2009 (as so amended, the “Loan Agreement”).


 


B.            The
parties to the Loan Agreement desire to enter into this Amendment for the
purpose of making certain amendments to the Loan Agreement and waiving
compliance with certain covenants in the Loan Agreement.


 


AGREEMENT


 


In consideration of the matters set forth in the
recitals and the covenants and provisions herein set forth, and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:


 


1.             Definitions.  Capitalized terms used but not defined herein
are used as defined in the Loan Agreement.


 


2.             Amendments.  Upon satisfaction of the conditions precedent
hereinafter set forth, the Loan Agreement shall be amended as follows:


 


2.1.          Section 5(a) of the Loan Agreement shall be
amended in its entirety and as so amended shall read as follows:


 


“(a)         Grant
of Security Interest to Administrative Agent.


 


As
security for the payment of all Loans now or in the future made by Administrative
Agent and Lenders to Borrower hereunder and for the payment or other
satisfaction of all other Liabilities, Borrower hereby assigns to
Administrative Agent, for the benefit of Administrative Agent and Lenders, and
grants to Administrative Agent, for the benefit of Lenders, a continuing
security interest in all personal property now owned or at any time hereafter
acquired by Borrower or in which Borrower now has or at any time in the future
may acquire any right, title or interest, including all of Borrower’s:  (a) all Accounts (whether or not
Eligible Accounts) and all Goods whose sale, lease or other disposition by
Borrower


 

















 


has
given rise to Accounts and have been returned to, or repossessed or stopped in
transit by, Borrower; (b) all Chattel Paper, Instruments, Documents and
General Intangibles (including, without limitation, all patents, patent
applications, trademarks, trademark applications, trade names, trade secrets,
goodwill, copyrights, copyright applications, registrations, licenses,
software, franchises, customer lists, tax refund claims, claims against
carriers and shippers, guarantee claims, contract rights, payment intangibles,
security interests, security deposits and rights to indemnification) including
without limitation, the patents and trademarks listed on Schedule 5A hereto; (c) all
Inventory (whether or not Eligible Inventory); (d) all Goods (other than
Inventory), including, without limitation, Equipment, vehicles and Fixtures; (e) all
Investment Property; provided, that Investment Property consisting of equity of
foreign Subsidiaries shall be limited to sixty-five percent (65%) of the equity
of first tier foreign Subsidiaries; (f) all Deposit Accounts, bank
accounts, deposits and cash; (g) all Letter-of-Credit Rights; (h) Commercial
Tort Claims listed on Exhibit C hereto; (i) any other property of
Borrower now or hereafter in the possession, custody or control of
Administrative Agent or any Lender or any agent or any parent, affiliate or
subsidiary of Administrative Agent or any Lender or any participant with any
Lender in the Loans, for any purpose (whether for safekeeping, deposit,
collection, custody, pledge, transmission or otherwise); and (j) all
additions and accessions to, substitutions for, and replacements, products and
Proceeds of the foregoing property, including, without limitation, proceeds of
all insurance policies insuring the foregoing property, and all of Borrower’s
books and records relating to any of the foregoing and to Borrower’s business.”


 


2.2.          Section 11(b) of the Loan Agreement shall be
amended by adding the following sentence at the end thereof:


 


“All
real estate owned or leased by the Borrower is set forth on Exhibit A
and the Borrower agrees to promptly notify the Administrative Agent in the
event it acquires or leases any real estate after the date hereof.”


 


2.3.          Section 11(s) of the Loan Agreement shall be
amended in its entirety and as so amended shall read as follows:


 


“Intellectual Property


 


Borrower
and each of its Subsidiaries possess adequate licenses, patents, patent
applications, copyrights, service marks, trademarks, trademark applications
trade styles and trade names (collectively, “Intellectual Property”) to
continue to conduct its business as


 


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heretofore
conducted by it, without infringement upon the rights of others.  Schedule 5A lists all Intellectual
Property (which has been or should be registered) owned by the Borrower or any
subsidiary as of the date hereof.  As of October 24,
2009, all Intellectual Property owned by the Borrower or any Subsidiary is
valid, subsisting, unexpired and enforceable and has not been abandoned.  Except as set forth on Schedule 5A, as of October 24,
2009, none of such Intellectual Property is the subject of any licensing or
franchising agreement pursuant to which Borrower or any Subsidiary is the
licensor or franchisor.”


 


2.4.          Section 12(i) of the Loan Agreement is hereby
amended in its entirety to read as follows:


 


“(i)          Intellectual Property.


 


(a) Borrower
(either itself or through licensees) will and will cause each Subsidiary to (i) continue
to use each Trademark material to its business in order to maintain such
Trademark in full force free from any claim of abandonment for non-use, (ii) maintain
in all material respects as in the past the quality of products and services
offered under such Trademark, (iii) use such Trademark with the
appropriate notice of registration and all other notices and legends required
by applicable law, (iv) not adopt or use any mark which is confusingly
similar or a colorable imitation of such Trademark unless the Administrative
Agent shall obtain a perfected security interest in such mark pursuant to this
Agreement, and (v) not (and not permit any licensee or sublicensee thereof
to) do any act or knowingly omit to do any act whereby such Trademark may
become invalidated or impaired in any material way.


 


(b)           Borrower (either itself or through
licensees) will not, nor will it permit any Subsidiary to, do any act, or omit
to do any act, whereby any Patent material to its business may become
forfeited, abandoned or dedicated to the public.


 


(c)           Borrower (either itself or through
licensees) (i) will, and will cause each Subsidiary to, employ each
Copyright material to its business and (ii) will not (and will not permit
any licensee or sublicensee thereof to) do any act or knowingly omit to do any
act whereby any material portion of such Copyrights may become invalidated or
otherwise materially impaired.  Borrower
will not, nor will it permit any Subsidiary to, (either itself or through
licensees) do any act whereby any material portion of such Copyrights may fall
into the public domain.


 


(d)           Borrower (either itself or through
licensees) will not, and will not permit any Subsidiary to, do any act that
knowingly uses


 


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any
Intellectual Property material to its business to infringe the intellectual
property rights of any other Person.


 


(e)           Borrower will, and will cause each
Subsidiary to, notify the Lender promptly if it knows, or has reason to know,
that any application or registration relating to any material Intellectual
Property may become forfeited, abandoned or dedicated to the public, or of any
adverse determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court or tribunal
in any country) regarding, Borrower’s or such Subsidiary’s ownership of, or the
validity of, any material Intellectual Property or Borrower’s or such
Subsidiary’s right to register the same or to own and maintain the same.


 


(f)            Within thirty (30) days after
Borrower or any Subsidiary, either by itself or through any agent, employee,
licensee or designee, shall file an application for the registration of any
Intellectual Property with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency in any other country
or any political subdivision thereof, Borrower shall report such filing to the
Administrative Agent.  Promptly following
the request of the Administrative Agent, Borrower shall, or shall cause such
Subsidiary to, execute and deliver, and have recorded, any and all agreements,
instruments, documents, and papers as the Administrative Agent may reasonably
request to evidence the Administrative Agent’s security interest in any
Copyright, Patent or Trademark and the goodwill and general intangibles of
Borrower or such Subsidiary relating thereto or represented thereby.


 


(g)           Borrower will, and will cause each
Subsidiary to, take all reasonable and necessary steps to maintain and pursue
each application (and to obtain the relevant registration) and to maintain each
registration of all material Intellectual Property owned by it.


 


(h)           In the event that any material
Intellectual Property is infringed upon or misappropriated or diluted by a
third party, Borrower shall, and shall cause each Subsidiary to, (i) take
such actions as Borrower shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, notify the Administrative
Agent within thirty (30) days after it learns thereof and, to the extent, in
its reasonable judgment, Borrower determines it appropriate under the
circumstances, sue for infringement, misappropriation or dilution, to seek
injunctive relief where


 


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appropriate
and to recover any and all damages for such infringement, misappropriation or
dilution.”


 


2.5.          Section 12 of the Loan Agreement is hereby amended by
adding the following new Sections at the end thereof:


 


“(k) 
Further Assurances.  Borrower agrees
to take, and cause each other Obligor to take, such actions as are necessary or
as the Administrative Agent or any Lender may reasonably request from time to
time to ensure that the Liabilities of each Obligor under the Loan Agreement
and Other Agreements are secured by substantially all of the assets of the
Borrower and each domestic Subsidiary (as well as all Capital Securities of
each domestic Subsidiary and 65% of all equity of each direct foreign
Subsidiary) and guaranteed by each domestic Subsidiary (including, upon the
acquisition or creation thereof, any domestic Subsidiary acquired or created
after the date hereof), in each case as the Administrative Agent or any Lender
may reasonably determine, including (a) the execution and delivery of
guaranties, security agreements, pledge agreements, mortgages, deeds of trust,
financing statements and other documents, and the filing or recording of any of
the foregoing and (b) the delivery of certificated securities and other
Collateral with respect to which perfection is obtained by possession.


 


(l) 
Real Estate Appraisals.  The
Borrower agrees to cooperate with the Administrative Agent and Lenders in
connection with obtaining new appraisals of all of its real property owned in
fee simple and pay for the costs in connection therewith.


 


(m) 
Consultant.  The Borrower shall,
not later than January 15, 2010, retain a consultant acceptable to the
Lenders (the “Consultant”), which Consultant shall conduct a review of Borrower’s
businesses and practices in scope and substance reasonably acceptable to the
Borrower and the Administrative Agent, and not later than February 15,
2010 provide a written report to the board of directors of the Borrower and the
Lenders, in form and substance reasonably satisfactory to the Lenders which
shall include the following:  (i) a
description of the review and the Consultant’s resulting recommendations and (ii) an
assessment of and the Consultant’s recommendations concerning the Borrower’s
2010 Budget and projections submitted to the Lenders.  Borrower hereby agrees that the Lenders may
contact the Consultant directly and Borrower shall direct the Consultant to
provide the Lenders with any and all information regarding the Borrower as any
Lender may reasonably request.”


 


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(n) 
The Borrower shall, no later than November 20, 2009, deliver to the
Administrative Agent all original certificates together with stock powers
executed in blank by the Borrower evidencing the Borrower’s pledge of 65% of
the equity interests in its direct foreign subsidiaries pursuant to the Loan
Agreement.


 


2.6.          Exhibit A to the Loan Agreement is hereby amended to
read as set forth on Exhibit A attached hereto.


 


2.7.          Schedule 5A to the Loan Agreement is hereby amended to read
as set forth on Schedule 5A attached hereto.


 


2.8.          Schedule 11(p) to the Loan Agreement is hereby amended
to read as set forth on Schedule 11(p) attached hereto.


 


3.             Waiver.  The Borrower has advised the Administrative
Agent that the Borrower is in violation of the provisions of Sections 14(a) and
14(b) of the Loan Agreement as of September 30, 2009 (the “Violations”).  Subject to the satisfaction of the conditions
precedent set forth in Section 6 below, the Requisite Lenders hereby
acknowledge the Violations and waive any Event of Default or Unmatured Event of
Default that would otherwise be caused by the Violations.  The waiver under this Section 3 is
limited as specifically written herein and shall be solely a waiver of the
above described Violations and it shall not constitute a waiver of any other
terms or conditions of the Loan Agreement.


 


4.             Affirmation.  Except as expressly amended hereby, the Loan
Agreement and the Other Agreements are and shall continue in full force and
effect and the Borrower hereby fully ratifies and affirms the Loan Agreement
and each Other Agreement to which it is a party.  Reference in any of this Amendment, the Loan
Agreement or any Other Agreement to the Loan Agreement shall be a reference to
the Loan Agreement as amended hereby and as further amended, modified,
restated, supplemented or extended from time to time.


 


5.             Representations and Warranties.  To induce the Administrative Agent and
Lenders to execute this Amendment, the Borrower hereby represents and warrants
to the Lenders as follows:


 


5.1.          The Borrower is duly authorized to execute and deliver this
Amendment and is duly authorized to perform its obligations hereunder.


 


5.2.          The execution, delivery and performance by the Borrower of
this Amendment do not and will not (i) require any consent or approval of
any Person (other than any consent or approval which has been obtained and is
in full force and effect), (ii) conflict with (A) any provision of
law, (B) the charter, by-laws or other organizational documents of the
Borrower or (C) any agreement, indenture, instrument or other document, or
any judgment, order or decree, which is binding upon the Borrower or any of its
properties or (iii) require, or result in, the creation or imposition of
any Lien on any asset of the Borrower other than Liens in favor of the
Administrative Agent.


 


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5.3.          This Amendment is the legal, valid and binding obligation
of the Borrower, enforceable against the Borrower in accordance with its terms,
subject to bankruptcy, insolvency and similar laws affecting enforceability of
creditors’ rights generally and to general principles of equity.


 


5.4.          The representations and warranties in the Loan Agreement
and Other Agreements (including but not limited to Section 11 of the Loan
Agreement), in each case after giving effect to the amendments set forth in Section 2
hereof, are true and correct with the same effect as though made on and as of
the date of this Amendment (except to the extent stated to relate to a specific
earlier date, in which case such representations and warranties were true and
correct as of such earlier date).


 


5.5.          Except for the Violations waived pursuant to Section 3
of this Amendment, no Unmatured Event of Default or Event of Default has
occurred and is continuing.


 


6.             Conditions to Amendment.  This Amendment shall become effective upon
the satisfaction in full of all of the following conditions precedent, each of
which shall be satisfactory to the Administrative Agent and the Requisite
Lenders:


 


6.1.          Amendment. 
The Borrower and the Requisite Lenders shall have executed and delivered
to the Administrative Agent this Amendment.


 


6.2.          Waiver Fee. 
The Administrative Agent shall have received $50,000 as and for a
nonrefundable waiver fee for the pro rata account of the Lenders executing this
Amendment.


 


6.3.          Other.  Such
other documents as the Administrative Agent or Lender shall reasonably request.


 


7.             Costs and Expenses.  The Borrower shall pay or reimburse the
Administrative Agent within five Business Days after demand for all reasonable
costs and expenses (including reasonable attorneys fees) incurred by it in
connection with the preparation, delivery, administration, and execution of
this Amendment and the documentation and transactions contemplated hereby, and
in connection with any review of the Collateral and Other Agreements considered
necessary by them in connection with this Amendment.


 


8.             Counterparts.  This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute one instrument. 
Delivery of an executed counterpart of this Amendment by facsimile or
electronic transmission shall be effective as delivery of an original counterpart.


 


9.             Headings.  The headings and captions of this Amendment
are for the purposes of reference only and shall not affect the construction
of, or be taken into consideration in interpreting, this Amendment.


 


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10.           APPLICABLE LAW.  THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS WITHOUT
GIVING EFFECT TO ILLINOIS CHOICE OF LAW DOCTRINE.


 


The parties hereto have caused this Amendment to be
executed by their duly authorized officers, all as of the day and year first
above written.


 


Signature Pages Follow


 


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  COBRA
  ELECTRONICS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael Smith

  
	
   

  	
  Name:

  	
  Michael
  Smith

  
	
   

  	
  Title:

  	
  Senior
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  PRIVATEBANK AND TRUST COMPANY, individually as a Lender
  and as Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mitchell Rasky

  
	
   

  	
  Name:

  	
  Mitchell
  Rasky

  
	
   

  	
  Its:

  	
  Managing
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  RBS
  CITIZENS, N.A., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Paul M. Mongeau

  
	
   

  	
  Name:

  	
  Paul
  M. Mongeau

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  



 


Third Amendment Signature Page