THERETO, THE EXCESS AVAILABILITY AMOUNT WOULD BE LESS THAN
$2,000,000.
A VIOLATION OF CLAUSE (I) OF THIS SECTION 2.5 SHALL CONSTITUTE AN
IMMEDIATE EVENT OF DEFAULT.
SECTION 3.
CONSENT TO MARTIN AUDIO
ACQUISITION; RELATED CONSENTS; RELATED AGREEMENTS; SLM HOLDBACK PAYMENT
3.1.
CONSENT TO MARTIN AUDIO ACQUISITION.
IN RELIANCE UPON THE
REPRESENTATIONS, WARRANTIES, COVENANTS AND OTHER AGREEMENTS OF BORROWERS
CONTAINED IN THIS AGREEMENT, AND SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT AND ANY DOCUMENTS OR INSTRUMENTS EXECUTED IN CONNECTION HEREWITH,
ADMINISTRATIVE AGENT AND LENDERS HEREBY CONSENT TO:
(I) THE FORMATION OF GRACE
ACQUISITIONCO LIMITED, A LIMITED COMPANY ORGANIZED UNDER THE LAWS OF ENGLAND AND
WALES ("MARTIN HOLDCO"), AS A WHOLLY-OWNED SUBSIDIARY OF LOUD, PROVIDED THAT
MARTIN HOLDCO IS CAPITALIZED SOLELY WITH THE PROCEEDS OF CAPITAL CONTRIBUTIONS
MADE TO LOUD AFTER THE DATE HEREOF (SUCH PROCEEDS BEING REFERRED TO AS THE "NEW
EQUITY") AND (II) THE CONSUMMATION OF THE MARTIN AUDIO ACQUISITION PURSUANT TO
THE TERMS AND CONDITIONS SET FORTH IN THAT CERTAIN SHARE PURCHASE AGREEMENT
DATED AS OF MARCH 5, 2007, BY AND AMONG MARTIN HOLDCO, LOUD AND THE VENDORS AND
OPTIONHOLDERS LISTED ON SCHEDULE 1 THERETO (AS AMENDED OR OTHERWISE MODIFIED
PRIOR TO THE DATE HEREOF, INCLUDING ALL EXHIBITS AND SCHEDULES THERETO, THE
"MARTIN AUDIO PURCHASE AGREEMENT"), A TRUE, CORRECT AND COMPLETE COPY OF WHICH
HAS BEEN PROVIDED TO ADMINISTRATIVE AGENT, PROVIDED THAT BORROWERS COMPLY (AND
THE TERMS AND CONDITIONS OF THE MARTIN AUDIO ACQUISITION COMPLY) WITH, THE
PROVISIONS OF SECTIONS 5.8(B)(IV), (V), (VI), (XII) AND (XIII) OF THE CREDIT
AGREEMENT, AND PROVIDED FURTHER THAT ALL CONSIDERATION PAID PURSUANT TO THE
MARTIN AUDIO PURCHASE AGREEMENT AND ALL FEES, COSTS AND EXPENSES PAID OR PAYABLE
IN CONNECTION WITH THE CONSUMMATION OF THE MARTIN AUDIO ACQUISITION ARE PAID
SOLELY WITH THE PROCEEDS OF THE NEW EQUITY.
3.2.
ADDITIONAL CONSENTS AND AGREEMENTS.
IN CONNECTION WITH THE
CONSENTS PROVIDED PURSUANT TO SECTION 3.1 ABOVE, AND IN CONNECTION WITH THE
CONSUMMATION OF THE MARTIN AUDIO ACQUISITION, BORROWERS, ADMINISTRATIVE AGENT
AND LENDERS HEREBY AGREE TO THE FOLLOWING, NOTWITHSTANDING ANY PROVISION OF THE
CREDIT AGREEMENT OR ANY OF THE OTHER FINANCING DOCUMENTS TO THE CONTRARY:
(A)
TO THE EXTENT THAT THE NEW EQUITY IS USED TO CONSUMMATE THE MARTIN
AUDIO ACQUISITION AND PAY COSTS, FEES AND EXPENSES IN CONNECTION THEREWITH,
BORROWERS SHALL NOT BE REQUIRED TO PREPAY ANY OF THE LOANS WITH THE PROCEEDS OF
THE NEW EQUITY, AS WOULD OTHERWISE BE REQUIRED PURSUANT TO THE PROVISIONS OF
SECTION 2.1(C)(III) OF THE CREDIT AGREEMENT;
(B)
AMOUNTS EXPENDED TO CONSUMMATE THE MARTIN AUDIO ACQUISITION
PURSUANT TO THE MARTIN AUDIO PURCHASE AGREEMENT SHALL BE EXCLUDED FOR PURPOSES
OF CALCULATING "CAPITAL EXPENDITURES";
4
(C)
EXCEPT FOR THE CONTRIBUTION BY LOUD TO MARTIN AUDIO OF PROCEEDS OF
THE NEW EQUITY, PRIOR TO OR CONCURRENTLY WITH THE CLOSING OF THE MARTIN AUDIO
ACQUISITION, NEITHER BORROWERS NOR ANY OTHER CREDIT PARTY SHALL DIRECTLY OR
INDIRECTLY MAKE ANY LOAN TO, MAKE ANY INVESTMENT IN, OR EXTEND ANY OTHER
FINANCIAL ACCOMMODATIONS (INCLUDING WITHOUT LIMITATION TRADE CREDIT) TO, MARTIN
HOLDCO, MARTIN AUDIO OR