exv10w2



 





EXHIBIT 10.2




Ableco Finance LLC

299 Park Avenue, 23rd Floor

New York, New York 10171




                                                       
                              
          as of May 21, 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”), Ableco Finance LLC, a Delaware limited
liability company, as collateral agent for the Lenders (in such capacity, together with any
successor collateral agent, the “Collateral Agent”), and GMAC Commercial Finance LLC, 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 the 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
(such subsidiaries, together with US Borrower and 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”), Collateral Agent and Administrative
Agent, (Administrative Agent and 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 the Agents that US Borrower is unable to deliver to Agents (i) the monthly
financial statements for March 2007 and the quarterly financial statements for the fiscal quarter
of Parent ending March 31, 2007 (collectively, the “Financial Deliverable”) by May 15, 2007
(the “Financial Deliverable Deadline”) as required by Section 7.01(a) of the Loan
Agreement, as extended by that certain extension letter dated May 3, 2007 (the “Designated
Financial Deliverable Requirement”), and (ii) the control agreement relating to the Blocked
Accounts (the “Blocked Account Deliverable”; and together with the Financial Deliverable,
collectively, the “Deliverables”) by May 15, 2007 (the “Blocked Account Deliverable
Deadline”; and together with the Financial Deliverable Deadline, collectively, the
“Delivery Deadlines”) as required by Section 8.01(a) of the Loan Agreement, as
extended by that certain extension letter dated May 3, 2007 (the “Designated Blocked Account
Deliverable Requirement”; and together with the Designated Financial Deliverable Requirement,
the “Designated Events of Default”).



 









 





     Parent has requested that the Agents and the undersigned Lenders consent to the extension of
the Delivery Deadlines with respect to the Deliverables as set forth herein. Agents and the Lenders
are willing to grant the requested extension on the terms and conditions set forth herein.



     Accordingly, the Agents, the undersigned Lenders and the Loan Parties hereby agree that (i)
the Financial Deliverable Deadline with respect to the Financial Deliverable hereby is extended to
May 27, 2007, and (ii) the Blocked Account Deliverable Deadline with respect to the Blocked Account
Deliverable hereby is extended to May 27, 2007.



     Subject to the terms and conditions hereof, the Agents and the undersigned 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 the Agents 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 any 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




2









 







counterpart of this letter by telefacsimile or other electronic method shall be equally as
effective 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]




3









 





          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
affiliates, 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]




 









 





          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
affiliates, as Lenders	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	GMAC COMMERCIAL FINANCE LLC,
 as
Administrative Agent and as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Christopher Gauch	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:
	 	Vice President	 	 
	 

	 	 	 	 

	 	 






[SIGNATURE PAGE TO WAIVER AND EXTENSION LETTER]




 









 





	 	 	 	 	 
	 	 	FORTRESS CREDIT FUNDING I LP,

as a Lender
	 
	 	 	 	 
	 

	 	By:
	 	Fortress Credit Funding I GP LLC,

its general partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Constantine M. 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 M. 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 M. 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 M. Dakolias
	 

	 	 	 	 
	 

	 	Title:
	 	CHIEF CREDIT OFFICER
	 

	 	 	 	 





[SIGNATURE PAGE TO WAIVER AND EXTENSION LETTER]





 









 








	 	 	 	 	 	 	 
	 	 	FORTRESS CREDIT OPPORTUNITIES I LP,

as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Fortress Credit Opportunities I GP LLC,

its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Constantine M. Dakolias	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	CHIEF CREDIT OFFICER	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	FORTRESS CREDIT OPPORTUNITIES II LP,

as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Fortress Credit Opportunities II GP LLC,

its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Constantine M. Dakolias	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	CHIEF CREDIT OFFICER	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	FCCD LIMITED,
 as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Constantine M. Dakolias	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	CHIEF CREDIT OFFICER	 	 
	 

	 	 	 	 

	 	 






[SIGNATURE PAGE TO WAIVER AND EXTENSION LETTER]





 









 








	 	 	 	 	 
	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:

	 	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]





 









 








	 	 	 	 	 
	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]