Document:

Exhibit 4.2.2

 

THIRD AMENDMENT TO THE

REVOLVING CREDIT AGREEMENT

 

THIS THIRD
AMENDMENT to the REVOLVING CREDIT AGREEMENT, dated as of this 30 day of August,
2004 (the “Third Amendment”), is entered into in connection with and as an
amendment to that certain Revolving Credit Agreement, dated as of March 10th,
2003 (the “Credit Agreement”), as amended by that First Amendment, dated as of
August 31st,
2003, as further amended by that Second Amendment, dated as of February 27,
2004, and as further amended, restated or modified from time to time, by and
between First National Bank of Omaha (the “Bank”) and Ballantyne of Omaha, Inc.
(the “Borrower”). All capitalized terms used but not otherwise defined herein
shall have their respective meanings as prescribed in the Credit Agreement.

 

WHEREAS, the
maturity date for the Base Revolving Credit Facility pursuant to the Credit
Agreement is currently August 30th, 2004; and

 

WHEREAS, the
Borrower and the Bank desire to extend the maturity date of the Base Revolving
Credit Facility to August 29th, 2005 and to make
such other amendments as discussed below.

 

NOW, THEREFORE,
the parties hereby agree that as of the date hereof:

 

1.                                       The
following definition in Article 1 of the Credit Agreement is hereby amended to
read as follows:

 

Termination Date: August 29, 2005, or such later date as is approved in
writing by FNBO.

 

2.                                       Section
2.1 of the Credit Agreement is hereby amended by replacing the phrase “Until
August 30, 2004” with “Until August 29, 2005”.

 

3.                                       Section
2.2(a) of the Credit Agreement is hereby amended and restated in its entirety
to read as follows:

 

2.2.                              Revolving
Credit Fees.

 

(a)                                  The
Borrower shall pay to FNBO a commitment fee equal to 1/8 of 1% (.00125) of the
average unused facility, payable quarterly in arrears. Such fee shall accrue
from the first day of each calendar quarter and shall be payable in arrears on
the tenth (10th) day
of the month following the end of each calendar quarter.

 

4.                                       This
Third Amendment shall not affect any and all amounts and obligations that may
be outstanding from the Borrower to the Bank under the Credit Agreement, and
all such obligations remain secured by the Collateral.

 

 

5.                                       This
Third Amendment may be executed in several counterparts, and such counterparts
together shall constitute one and the same instrument.

 

6.                                       Except
as expressly agreed herein, all terms of the Credit Agreement shall remain in
full force and effect.

 

[Signature page follows]

 

 

IN WITNESS WHEREOF, the
Borrower and the Bank have caused this Third Amendment to be executed as of the
day and year first above written.

 

 

	
   

  	
   

  	
  BANK:

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  FIRST NATIONAL BANK OF
  OMAHA

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
  /s/ Stu
  Becker

  
	
   

  	
   

  	
  Name:

  	 

	
   

  	
   

  	
  Title:   VP

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  BORROWER:

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  BALLANTYNE OF OMAHA, INC.

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
  /s/ John Wilmers

  
	
   

  	
   

  	
  Name:  JOHN WILMERS

  	 

	
   

  	
   

  	
  Title:    PRESIDENT
  & C.E.O.

  	 

					

 

NOTICE: 
A credit agreement must be in writing to be enforceable under Nebraska
law. To protect you and us from any misunderstandings or disappointments, any
contract, promise, undertaking, or offer to forebear repayment of money or to
make any other financial accommodation in connection with this loan of money or
grant or extension of credit, or any amendment of, cancellation of, waiver of,
or substitution for any or all of the terms or provisions of any instrument or
document executed in connection with this loan of money or grant or extension
of credit, must be in writing to be effective.

 

 

	
   

  	
  INITIALED:   

  	
   /s/ Brad
  French

  	
   

  	
   

  
	
   

  	
   

  	
  BorrowerExhibit 10.5.2

 

AMENDMENT NO. 3  TO LOAN AND SECURITY AGREEMENT

 

AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT
(“Amendment No. 3”), dated as of August 3,  2004,
by and among LOUD Technologies Inc., a Washington corporation formerly known as
Mackie Designs Inc. (“US Borrower”), LOUD Technologies (Europe) Plc. formerly
known as Mackie Designs UK Plc, a company incorporated under the laws of
England and Wales with registration number 02506901 (“UK Borrower”, and
together with US Borrower, each individually a “Borrower” and collectively, “Borrowers”),
Mackie Designs Inc., a Washington corporation, formerly known as Mackie Designs
Manufacturing, Inc. (“Mackie”), SIA Software Company, Inc., a New York
corporation (“SIA”) Mackie Investment Co., a Washington corporation (“Mackie
Investment”, and together with Mackie and SIA, each individually a “Guarantor”
and collectively, “Guarantors”), Congress Financial Corporation (Florida), in
its capacity as agent pursuant to the Loan Agreement (as hereinafter defined)
acting for and on behalf of the parties thereto as lenders (in such capacity, “Agent”),
and the parties to the Loan Agreement as lenders (individually, each a “Lender”
and collectively, “Lenders”).

 

W I T N E S S E T H :

 

WHEREAS, Agent, Lenders, Borrowers and Guarantors
have entered into financing arrangements pursuant to which Agent and Lenders
have made and may make loans and advances to Borrowers as set forth in the Loan
and Security Agreement, dated March 31, 2003, by and among Agent, Lenders,
Borrowers and Guarantors, as amended by Amendment No. 1 to Loan and Security
Agreement dated as of June 30, 2003 and Amendment No. 2 and Waiver to Loan and
Security Agreement dated April 16, 2004 (as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, the “Loan Agreement”) and other agreements, documents and instruments
referred to therein or at any time executed and/or delivered in connection
therewith or related thereto (all of the foregoing, together with the Loan
Agreement, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, being collectively
referred to herein as the “Financing Agreements”);

 

WHEREAS, Agent, Lender, Borrowers and
Guarantors desire to amend the Loan Agreement to, among other things, modify
the lending formulas contained therein.

 

WHEREAS, by this Amendment No. 3, Agent,
Lenders, Borrowers and Guarantors desire and intend to evidence such amendment;

 

NOW THEREFORE, in consideration of the
foregoing and the mutual agreements and covenants contained herein, the parties
hereto agree as follows:

 

 

1.             Definitions.

 

(a)           Amendments
to Definitions.

 

(i)            Clause (ii)(a)(i)(A) of the
definition of ‘Borrowing Base” in Section 1.12 of the Loan Agreement is hereby
amended by deleting “seventy-five (75%) percent” and replacing it with “eighty
(80%) percent”.

 

(ii)           The definition of “Eligible Inventory”
in Section 1.37 of the Loan Agreement is hereby amended by deleting “raw
materials for such finished goods” and replacing it with “raw materials for
such finished goods consisting of transducers”.

 

(iii)          The definition of “Interest Rate in
Section 1.69 of the Loan Agreement is hereby amended by deleting such Section
in its entirety and replacing it with the following:

 

“1.69                     “Interest Rate” shall mean,

 

(a)                                  Subject to clause (b) of this definition
below:

 

(i)                                     as to Prime Rate Loans that are Revolving
Loans, a rate equal to three-quarters of one (.75%) percent per annum in excess
of the Prime Rate, and

 

(ii)                                  as to Eurodollar Rate Loans that are Revolving
Loans, a rate equal to three and one-half (3.50%) percent per annum in excess
of the Adjusted Eurodollar Rate (in each case, based on the Eurodollar Rate
applicable for the Interest Period selected by a Borrower, or by Administrative
Borrower on behalf of such Borrower, as in effect three (3) Business Days after
the date of receipt by Agent of the request of or on behalf of a Borrower for
such Eurodollar Rate Loans in accordance with the terms hereof, whether such
rate is higher or lower than any rate previously quoted to any Borrower or
Guarantor), and

 

(iii)                               as to Term Loans, a rate equal to one (1.00%)
percent per annum in excess of the Prime Rate.

 

(b)                                 Notwithstanding anything to the contrary
contained in clause (a) of this definition, the Interest Rate shall mean the
per annum rates set forth above plus (in each case) two (2%) percent, at Agent’s
option, upon prior notice, (i) either (A) for the period on and after the date
of termination or non-renewal hereof until such time as all Obligations are
paid and satisfied in full in immediately available funds, or (B) for the period
from and after the date of the occurrence of any Event of Default, and for so
long as such Event of Default is continuing as determined by Agent in good
faith and (ii) on the Revolving Loans to each Borrower at any time outstanding
in excess of the Borrowing Base of such Borrower or the Revolving Loan Limit of
such Borrower

 

2

 

(whether
or not such excess(es) arise or are made with or without Agent’s or any Lender’s
knowledge or consent and whether made before or after an Event of Default).
Upon the request of a Borrower, Agent will promptly notify such Borrower in
writing if the Interest Rate specified in this clause (b) is in effect.”

 

(iv)                              The definition of “Inventory Loan Limit” in
Section 1.71 of the Loan Agreement is hereby amended by deleting “US$16,000,000”
and replacing it with “US$12,000,000”.

 

(v)                                  The definition of “Maximum Credit” in Section
1.84 of the Loan Agreement is hereby amended by deleting “US$28,500,000” and
replacing it with “US$25,000,000”.

 

(vi)                              The definition of “Raw Material Availability”
in Section 1.110 of the Loan Agreement is hereby amended by deleting such
section in its entirety and replacing the following therefore

 

“1.110     “Raw Material Availability” shall mean the
lesser of (a) twenty two (22%) percent multiplied by the US Dollar Equivalent
of the Value of the Eligible Inventory of US Borrower consisting of raw
materials which are transducers or (b) eighty five (85%) percent of the Net
Recovery Percentage of Inventory of US Borrower consisting of raw materials
which are transducers multiplied by the US Dollar Equivalent of the Value of
Eligible Inventory of US Borrower consisting of raw materials which are
transducers or (c) the US Dollar Equivalent of $500,000.”

 

(vii)                           The definition of “Reserve” in Section 1.117
of the Loan Agreement is hereby
amended by deleting the phrase “greater than fifteen (15%)” and replacing it
with “greater than ten (10%)”.

 

(viii)                        The definition of “Revolving Loan Limit” in
Section 1.118 of the Loan Agreement is hereby amended by deleting “US$26,000,000”
and replacing it with “US$25,000,000”.

 

(b)                                   Existing Definitions in Loan Agreement.
Capitalized terms used herein which are not otherwise defined herein shall have
the respective meanings ascribed thereto in the Loan Agreement.

 

2.                                       Loans. Section 2.1 (c) of the Loan Agreement is hereby amended by:

 

(a)                                  deleting “Eligible Inventory of US” from
clause (iv) of such Section and replacing it with “Eligible Inventory of US
Borrower”;

 

(b)                                 deleting “and” at the end of clause (v) of
such Section and replacing it with “;” and

 

3

 

(c)                                  inserting the following immediately before the
period at the end of such Section; “and (vii) the aggregate principal amounts
of the Revolving Loans and Letter of Credit Accommodations outstanding at any
time to US Borrower based on the Eligible Inventory of US Borrower located at
the Dutch Warehouse shall not exceed the US Dollar Equivalent of US$2,000,000”.

 

3.                                       Term Loans. Section 2.3 of the Loan Agreement is hereby amended by deleting clause
(b) of such Section in its entirety and replacing it with the following:

 

“(b) Each of the Term Loans is (i) evidenced by an Amended and Restated
Term Promissory Note in such original principal amount duly executed and
delivered by US Borrower to Agent; (ii) to be repaid, together with interest
and other amounts, in accordance with this Agreement, such Amended and Restated
Term Promissory Note, and the other Financing Agreements and (iii) secured by
the Collateral as provided in Section 5.1. The principal amount of each of the
Term Loans shall be repaid in forty (40) consecutive monthly installments (or
earlier as provided herein) payable on the first day of each month commencing
July 1, 2003, the first twelve (12) of which shall be each in the amount of
$41,666 and the following twenty-eight (28) installments of which shall each be
in the amount of $25,000; provided,  that, the entire unpaid
principal amount of each Term Loan and all accrued and unpaid interest thereon
shall be due and payable on the effective date of termination or non-renewal of
the Financing Agreements.”

 

4.                                       Fees. Section 3.2(a) of the Loan Agreement is hereby amended by deleting “US$26,000,000”
and replacing it with “US$25,000,000”,

 

5.                                       Excess Availability. Section 9.19 of the Loan Agreement is hereby
amended by deleting “US$1,500,000 and replacing it with “US$500,000”.

 

6.                                       Additional Representations, Warranties and
Covenants. Borrowers
represent, warrant and covenant with and to Agent and Lenders as follows, which
representations, warranties and covenants are continuing and shall survive the
execution and delivery hereof, and the truth and accuracy of, or compliance
with each, together with the representations, warranties and covenants in the
other Financing Agreements, being a continuing condition of the making of Loans
by Lenders (or Agent on behalf of Lenders) to Borrowers:

 

(a)                                  no Default or Event of Default has occurred
and is continuing as of the date
of this Amendment No. 3; and

 

(b)                                 this Amendment No. 3 and all agreements,
documents and instruments executed and/or delivered in connection herewith have
been duly executed and delivered by Borrowers and Guarantors and the agreements
and obligations of Borrowers and Guarantors contained herein and therein
constitute legal, valid and binding obligations of Borrowers and Guarantors
enforceable against Borrowers and Guarantors in accordance with their
respective

 

4

 

terms, except as such enforceability may be limited
by bankruptcy, insolvency, moratorium or similar laws limiting creditors rights
generally and by general equitable principles.

 

7.                                       Conditions Precedent for Amendment. The amendments contained herein shall be
effective upon Agent’s receipt of the following; (a) this Amendment No. 3, duly
authorized, executed and delivered by Borrowers, Guarantors and Required
Lenders, and (b) an Amended and Restated Term Promissory Note, in form and
substance satisfactory to Agent, duly authorized, executed and delivered by US
Borrower.

 

8.                                       Effect of this Amendment. Except as modified pursuant hereto, no other
changes or modifications to the Financing Agreements are intended or implied,
and in all other respects the Financing Agreements are hereby specifically
ratified, restated and confirmed by all parties hereto as of the effective date
of this Amendment No. 3. To the extent of conflict between the terms of this
Amendment No. 3 and the other Financing Agreements, the terms of this Amendment
No. 3 shall control.

 

9.                                       Further Assurances. Borrowers and Guarantors shall execute and
deliver such additional documents and take such additional action as may be
reasonably necessary or desirable to effectuate the provisions and purposes of
this Amendment No. 3.

 

10.                                 Governing Law. The validity, interpretation and enforcement
of this Amendment No. 3 and any dispute arising out of the relationship between
the parties hereto whether in contract, tort, equity or otherwise, shall be
governed by the internal laws of the State of Florida (without giving effect to
principles of conflicts of laws).

 

11.                                 Binding Effect. This Amendment No. 3 shall be binding upon
and inure to the benefit of each of the parties hereto and their respective
successors and assigns.

 

12.                                 Headings. The headings listed herein are for convenience only and do not constitute
matters to be construed in interpreting this Amendment No. 3.

 

13.                                 Counterparts. This Amendment No. 3 may be executed in any number of counterparts,
but all of such counterparts shall together constitute but one and the same agreement.
In making proof of this Amendment No. 3, it shall not be necessary to produce
or account for more than one counterpart thereof signed by each of the parties
hereto. This Amendment No. 3 may be executed and delivered by telecopier with
the same force and effect as if it were a manually executed and delivered
counterpart.

 

5

 

IN WITNESS WHEREOF, the parties hereto have
caused this Amendment No. 3 to be duly executed and delivered by their
authorized officers as of the day and year first above written.

 

	
   

  	
  BORROWERS

  
	
   

  	
   

  
	
   

  	
  LOUD TECHNOLOGIES INC.,
  formerly known

  as Mackie Designs Inc.

  
	
   

  	
   

  
	
  `

  	
  By:

  	
  /s/ Timothy P. O’Neil

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  CFO

  	
   

  
	
   

  	
   

  
	
   

  	
  LOUD TECHNOLOGIES (EUROPE)
  PLC.,

  formerly know as Mackie Designs UK Plc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy P. O’Neil

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  VP

  	
   

  
	
  `

  	
   

  
	
   

  	
  By:

  	
  /s/ James T. Engen

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  VP

  	
   

  
	
   

  	
   

  
	
   

  	
  GUARANTORS

  
	
   

  	
   

  
	
   

  	
  MACKIE DESIGNS INC., formerly
  known as

  Mackie Designs Manufacturing, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy P. O’Neil

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  VP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SIA SOFTWARE COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy P. O’Neil

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  VP

  	
   

  
					

 

 

	
   

  	
  MACKIE INVESTMENT CO.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy P. O’Neil

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  VP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AGENT

  
	
   

  	
   

  
	
   

  	
  CONGRESS
  FINANCIAL CORPORATION

  (FLORIDA) , as Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Martin J. Coloson

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  FIRST VICE PRESIDENT

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER

  
	
   

  	
   

  
	
   

  	
  CONGRESS FINANCIAL CORPORATION

  (FLORIDA)

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Martin J. Coloson

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  FIRST VICE PRESIDENT

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