EX-10.1 FIFTH AMENDMENT TO CREDIT AGREEMENT



 





Exhibit 10.1



FIFTH AMENDMENT TO CREDIT AGREEMENT




     This Fifth Amendment to Credit Agreement is made as of this 22 day of
November, 2004 by and among




NEW ENGLAND AUDIO CO., INC., a Massachusetts corporation, having
its principal place of business at 40 Pequot Way, Canton,
Massachusetts 02021, as Lead Borrower for the Borrowers, being




said NEW ENGLAND AUDIO CO., INC., and




SOUND ADVICE OF ARIZONA INC., a Florida corporation, having a
mailing address at 40 Pequot Way, Canton, Massachusetts 02021, and




NEA DELAWARE, INC., a Delaware corporation, having a mailing
address at 40 Pequot Way, Canton, Massachusetts 02021, and




THEG USA, L.P., a Delaware limited partnership, having a mailing
address at 40 Pequot Way, Canton, Massachusetts 02021, and




HILLCREST HIGH FIDELITY, INC., a Texas corporation, having a
mailing address at 40 Pequot Way, Canton, Massachusetts 02021, and




SOUND ADVICE, INC., a Florida corporation, having a mailing
address at 40 Pequot Way, Canton, Massachusetts 02021, and




SUMARC ELECTRONICS INCORPORATED, a North Carolina corporation,
having a mailing address at 40 Pequot Way, Canton, Massachusetts
02021; and




STEREO SOUND, INC., a Tennessee corporation, having a mailing
address at 40 Pequot Way, Canton, Massachusetts 02021, and




the LENDERS party hereto; and




FLEET NATIONAL BANK, a national banking association having a place of
business at 100 Federal Street, Boston, Massachusetts 02110, as Issuing
Bank; and




FLEET NATIONAL BANK, a national banking association having a place of
business at 100 Federal Street, Boston, Massachusetts 02110, as
Administrative Agent for the Lenders; and




FLEET NATIONAL BANK, a national banking association having a place of
business at 100 Federal Street, Boston, Massachusetts 02110, and FLEET
RETAIL GROUP, INC. (f/k/a Fleet Retail Finance Inc.), a Delaware



 









 






corporation, having its principal place of business at 40 Broad Street,
Boston, Massachusetts 02109, as Collateral Agents for the Lenders


in consideration of the mutual covenants herein contained and benefits to be
derived herefrom.




W I T N E S S E T H




     A. Reference is made to the Credit Agreement (as amended and in effect,
the “Credit Agreement”) dated as of April 16, 2003 by and among the Lead
Borrower, the Borrowers, the Lenders, the Issuing Bank, the Administrative
Agent and the Collateral Agents.



     B. The parties to the Credit Agreement desire to modify and amend certain
provisions of the Credit Agreement, as provided herein.



     Accordingly, the parties hereto agree as follows:





	1.	 	     Definitions. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit
Agreement.







	2.	 	     Amendments to Article I of the Credit Agreement. The provisions of
Article I of the Credit Agreement are hereby amended as follows:







	 	a.	 	by deleting the chart appearing in the definition of
“Applicable Margin and substituting the following chart in its
stead:





	 	 	 	 	 	 	 
	Level	 	Performance Criteria	 	Prime Rate Loans	 	LIBO Loans
	1

	 	Average Excess Availability

greater than $24,000,000
	 	0%
	 	1.75%
	2

	 	Average Excess Availability
greater than $15,000,000 but
less than or equal to
$24,000,000
	 	0%
	 	2.00%
	3

	 	Average Excess Availability
less than or equal to
$15,000,000
	 	0%
	 	2.25%







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	 	b.	 	by deleting the number “0.375%” appearing in the definition
of “Line Fee” and substituting the number “0.30%” in its stead.







	 	c.	 	by deleting the date “April 1, 2006” appearing in the
definition of “Maturity Date” and substituting the date “April 1,
2008” in its stead.







	2.	 	Amendments to Article II of the Credit Agreement. The provisions of
Article II of the Credit Agreement are hereby amended as follows:







	 	a.	 	by deleting the number “$110,000,000” appearing in Section
2.01(a)(i) and substituting the number “$90,000,000” in its stead.







	 	b.	 	by deleting Section 2.02(a)(iv) in its entirety and
substituting the following in its stead:






     (iv) Excess Availability (an Availability Reserve): In an amount
equal to $7,500,000.





	 	c.	 	by deleting the number “0.375%” appearing in Section 2.12 and
substituting the number “0.30%” in its stead.







	 	d.	 	by deleting the provisions of Section 2.14 in their entirety
and substituting the following in their stead:
	 
	 	 	 	SECTION 2.14 Early Termination Fees. In the event that the
Termination Date occurs or the Total Commitments are reduced, for
any reason, prior to April 1, 2007 (other than by virtue of the
Borrowers’ refinancing of the Obligations with Fleet, FRF or any
of their Affiliates), the Borrowers shall pay to the
Administrative Agent, for the benefit of the Lenders, a fee (the
“Early Termination Fee”) in an amount equal to (a) 0.75% of the
then Total Commitments (in effect immediately prior to such
Termination Date) or the amount of the reduction of the Total
Commitments, as applicable, if such Termination Date occurs on or
before December 31, 2005, and (b) 0.375% of the then Total
Commitments (in effect immediately prior to such Termination Date)
or the amount of the reduction of the Total Commitments, as
applicable, if such Termination Date occurs after December 31,
2005 and on or before April 1, 2007.







	3.	 	Amendments to Schedules. Schedule 1.1 to the Loan Agreement is hereby
deleted in its entirety and a new Schedule 1.1 in the form annexed hereto
substituted in its stead.







	4.	 	Amendment Fee. In consideration of the Lenders’ entering into this Fifth
Amendment, the Borrowers shall pay to the Administrative Agent, for the
pro rata accounts of the Lenders consenting hereto, an amendment fee in an
amount equal to 0.125% of each such Lender’s Commitment (after giving
effect to the reduction in the Total Commitments provided herein). The
amendment fee shall be paid upon the execution hereof, shall not be
subject to refund or rebate, and shall be retained as a fee and not
applied in reduction of




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	 	 	the principal, interest or other amounts due in connection with the Loan
Documents.







	6.	 	Miscellaneous.







	 	a.	 	This Fifth Amendment may be executed in several counterparts
and by each party on a separate counterpart, each of which when so
executed and delivered shall be an original, and all of which
together shall constitute one instrument.
	 
	 	b.	 	This Fifth Amendment expresses the entire understanding of
the parties with respect to the transactions contemplated hereby.
No prior negotiations or discussions shall limit, modify, or
otherwise affect the provisions hereof.
	 
	 	c.	 	Any determination that any provision of this Fifth Amendment
or any application hereof is invalid, illegal or unenforceable in
any respect and in any instance shall not effect the validity,
legality, or enforceability of such provision in any other instance,
or the validity, legality or enforceability of any other provisions
of this Fifth Amendment.
	 
	 	d.	 	The Borrowers shall pay on demand all costs and expenses of
the Agents, including, without limitation, reasonable attorneys’
fees in connection with the preparation, negotiation, execution and
delivery of this Fifth Amendment.
	 
	 	e.	 	The Borrowers warrant and represent that the Borrowers have
consulted with independent legal counsel of the Borrowers’ selection
in connection with this Fifth Amendment and are not relying on any
representations or warranties of the Agents, the Lenders or their
counsel in entering into this Fifth Amendment.





[SIGNATURE PAGES FOLLOW]




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     IN WITNESS WHEREOF, the parties have duly executed this Fifth Amendment as
of the day and year first above written.


	 	 	 	 	 
	 	NEW ENGLAND AUDIO CO., INC., as

Lead Borrower and Borrower

 	 
	 	By:  	 	 
	 	 	Name:  	Joseph McGuire 	 
	 	 	Title:  	Vice President and
 Chief Financial Officer 	 
	 
	 	SOUND ADVICE OF ARIZONA INC.,

as Borrower

 	 
	 	By:  	 	 
	 	 	Name:  	Joseph McGuire 	 
	 	 	Title:  	Vice President and
 Chief Financial Officer 	 
	 
	 	NEA DELAWARE, INC., as Borrower

 	 
	 	By:  	 	 
	 	 	Name:  	Joseph McGuire 	 
	 	 	Title:  	Vice President and 
Chief Financial Officer 	 
	 
	 	THEG USA, L.P., as Borrower

 	 
	 	By:  	New England Audio Co.,
 	 
	 	 	Inc., its General Partner 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Joseph McGuire 	 
	 	 	Title:  	Vice President and
 Chief Financial Officer 	 
	 





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	 	HILLCREST HIGH FIDELITY, INC.,

as Borrower

 	 
	 	By:  	 	 
	 	 	Name:  	Joseph McGuire 	 
	 	 	Title:  	Vice President and
 Chief Financial Officer 	 
	 
	 	SOUND ADVICE, INC., as Borrower

 	 
	 	By:  	 	 
	 	 	Name:  	Joseph McGuire 	 
	 	 	Title:  	Vice President and
 Chief Financial Officer 	 
	 
	 	SUMARC ELECTRONICS

INCORPORATED, as Borrower

 	 
	 	By:  	 	 
	 	 	Name:  	Joseph McGuire 	 
	 	 	Title:  	Vice President and
 Chief Financial Officer 	 
	 
	 	STEREO SOUND, INC., as Borrower

 	 
	 	By:  	 	 
	 	 	Name:  	Joseph McGuire 	 
	 	 	Title:  	Vice President and 
Chief Financial Officer 	 
	 
	 	TWEETER HOME ENTERTAINMENT

GROUP FINANCING COMPANY TRUST,

as Facility Guarantor

 	 
	 	By:  	 	 
	 	 	Name:  	Joseph McGuire 	 
	 	 	Title:  	Vice President and 
Chief Financial Officer 	 
	 




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	 	TWEETER HOME ENTERTAINMENT

GROUP, INC., as Facility

Guarantor

 	 
	 	By:  	 	 
	 	 	Name:  	Joseph McGuire 	 
	 	 	Title:  	Vice President and 
Chief Financial Officer 	 
	 
	 	FLEET RETAIL GROUP, INC.,

As Collateral Agent, as

Swingline Lender and as Lender

 	 
	 	By:  	 	 
	 	 	Name:  	Sally A. Sheehan 	 
	 	 	Title:  	Managing Director 	 
	 
	 	FLEET NATIONAL BANK,

as Administrative Agent, as

Collateral Agent and as Issuing

Bank

 	 
	 	By:  	 	 
	 	 	Name:  	Sally A. Sheehan 	 
	 	 	Title:  	Managing Director 	 
	 
	 	GENERAL ELECTRIC CAPITAL

CORPORATION, as Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	NATIONAL CITY BUSINESS CREDIT,

INC. (f/k/a National City

Commercial Finance, Inc.), as

Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




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	 	CONGRESS FINANCIAL CORPORATION

(CENTRAL), as Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	WELLS FARGO FOOTHILL, INC.

(f/k/a Foothill Capital

Corporation), as Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




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Schedule 1.1




Lenders and Commitments




	 	 	 	 	 	 	 	 	 
	Lender
	 	Commitment
	 	Commitment Percentage

	Fleet Retail Group, Inc.
	 	$	24,600,000	 	 	 	27.3333	%
	Congress Financial Corporation
	 	$	16,350,000	 	 	 	18.1667	%
	Wells Fargo Foothill, Inc.
	 	$	16,350,000	 	 	 	18.1667	%
	General Electric Capital
Corporation
	 	$	16,350,000	 	 	 	18.1667	%
	National City Business Credit,
Inc.
	 	$	16,350,000	 	 	 	18.1667	%
	TOTAL
	 	$	90,000,000.00	 	 	 	100.00	%








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