Document:

exv4w8

 

Exhibit 4.8

GLOBAL AMENDMENT TO

NOTES, WARRANTS, INDENTURE, SECURITY AGREEMENT, WARRANT AGENT

AGREEMENT AND REGISTRATION RIGHTS AGREEMENT

AND

WAIVER OF EVENT OF DEFAULT

This Global Amendment to Notes, Warrants, Indenture, Security Agreement,
Warrant Agent Agreement and Registration Rights Agreement and Waiver of Event
of Default (this “Amendment”) is dated as of November 12, 2004 and is among:

	•	 	Rockford Corporation, an Arizona corporation (“Company”);
	 
	•	 	Audio Innovations, Inc., an Oklahoma corporation (“AII”);
	 
	•	 	BNY Western Trust Company, a California banking corporation (“BNY”); and
	 
	•	 	the persons listed on the Schedule of Holders attached to this Amendment as Exhibit A (“Holders”).

RECITALS:

	A.	 	Company and Holders entered into a Securities Purchase
Agreement, dated as of June 10, 2004 (the “Purchase Agreement”),
pursuant to which Company issued and sold to Holders (i) $12,500,000
aggregate principal amount of Company’s 4.5% Convertible Senior
Subordinated Secured Notes due 2009 (the “Notes”) and (ii) Warrants
to Purchase Common Stock for an aggregate of 590,737 shares of
Company’s Common Stock (the “Warrants”).
	 
	B.	 	In connection with the transactions contemplated by the
Purchase Agreement, one or more of the parties entered into the
following ancillary agreements, each of which is dated as of June
10, 2004 (together with the Purchase Agreement, the Notes, and the
Warrants, the “Operative Documents”):

	•	 	Indenture between Company and BNY, as Trustee, relating to the Notes;
	 
	•	 	Security Agreement among Company, AII and BNY, as Agent;
	 
	•	 	Warrant Agent Agreement between Company and BNY, as Warrant Agent, relating to the Warrants; and
	 
	•	 	Registration Rights Agreement among Company, Piper Jaffray and Holders.

 

 

	C.	 	As Company has advised BNY and Holders, an Event of Default
occurred under Section 7.1(e) of the Indenture by virtue of the
initiation of a voluntary receivership proceeding relating to MB
Quart GmbH, a Subsidiary of Company (the “MB Quart Receivership”).
	 
	D.	 	Company has requested that BNY and Holders waive the Known
Existing Default (as defined below) and certain additional matters
arising under the Indenture. BNY and Holders are willing to grant
such waivers subject to Company’s and AII’s agreement to amend
certain terms and conditions of the Operative Documents as specified
in this Amendment.

AGREEMENTS:

	1.	 	Defined Terms. Capitalized terms used but not defined in
this Amendment will have the meanings given them in the Operative
Documents.
	 
	2.	 	Amendment to Notes. The reference to the “conversion price”
in the first full paragraph on page 6 of each of the Notes is
amended to reflect that the conversion price will be $4.61. At the
request of the Trustee or any Holder, Company will execute and
deliver to the Trustee for authentication a new Note reflecting the
foregoing amendment, and the Trustee will thereupon authenticate and
deliver the new Note to such Holder upon surrender of the
outstanding Note in accordance with Section 11.4 of the Indenture.
	 
	3.	 	Amendments to Warrants.

	(a)	 	Each of the Warrants is amended to reflect that
such Warrant is exercisable for the number of shares of Common
Stock of Company set forth on the attached Exhibit A.
	 
	(b)	 	Section 1(c) of each of the Warrants is amended
to reflect that the Exercise Price of the Warrants is $3.73.

	 	At the request of any Holder and upon written notice to Company and
the Warrant Agent, Company will execute and deliver to the Warrant
Agent a new Warrant Certificate reflecting the foregoing
amendments, and the Warrant Agent will thereupon register and
deliver the new Warrant Certificate to such Holder upon surrender
of the outstanding Warrant Certificate in accordance with Section 5
of the Warrant Agent Agreement.

	4.	 	Amendments to Indenture.

	(a)	 	Section 17.10 of the Indenture is amended and
restated in its entirety as follows:
	 
	 	 	In the event that the Company delivers an Officers’
Certificate and Opinion of Counsel certifying that its
obligations under this Indenture have been satisfied and
discharged by complying with

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	 	 	the provisions of Article XIII, the Trustee shall (i)
execute, deliver and authorize such releases,
termination statements and other instruments (in
recordable form, where appropriate) as the Company or
AII, as applicable, may reasonably request to evidence
the termination of the Security Interests created by the
Security Documents and (ii) not be deemed to hold the
Security Interests for its benefit and the benefit of
the holders of the Notes.
	 
	(b)	 	The form of Note attached as Exhibit A to the
Indenture is amended to the extent necessary to reflect the
amendment in Paragraph 2 above.

	5.	 	Amendment to Security Agreement. Section 20(f) of the
Security Agreement is amended and restated in its entirety as
follows:
	 
	 	 	Subject to Section 20(a) hereof, this Security Agreement shall
terminate upon the payment or satisfaction in full of all
other Obligations (other than indemnification Obligations as
to which no claim has been asserted).
	 
	6.	 	Amendments to Warrant Agent Agreement.

	(a)	 	The first “Whereas” clause in the Warrant Agent
Agreement is amended to reflect that Warrants to purchase a
total of 1,246,573 shares of Company’s Common Stock have been
issued to Holders and Piper Jaffray.
	 
	(b)	 	The form of Warrant Certificate attached as
Exhibit A to the Warrant Agent Agreement is amended to the
extent necessary to reflect the amendments in Paragraph 3
above.

	7.	 	Amendment to Registration Rights Agreement. Recital A of the
Registration Rights Agreement is amended to reflect that Warrants to
purchase a total of 1,187,500 shares of Company’s Common Stock have
been issued to Holders.
	 
	8.	 	Amendment of Registration Statement; Suspension of Sales.
Company agrees to amend the Registration Statement on Form S-3 that
was declared effective by the Commission on August 20, 2004, or file
a new Registration Statement, or both, to reflect the transactions
contemplated by this Amendment, including the increase in the number
of Warrants issued to Holders, in accordance with Section 2(e) of
the Registration Rights Agreement. Holders acknowledge and agree
that, from the date of execution of this Amendment until the amended
or new Registration Statement is declared effective by the
Commission, Holders may not sell the Notes, Warrants or underlying
shares of Common Stock under the currently effective Registration
Statement.
	 
	9.	 	Reservation of Shares. Company agrees to take all actions
necessary, including the issuance of irrevocable instructions to its
transfer agents, to at all times have authorized, and reserved for
the purpose of issuance, not less than 105% of the number of shares
of Common Stock issuable upon exercise of the Warrants.

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	10.	 	Waiver of Default. Effective as of the occurrence of the MB
Quart Receivership, the Trustee and Holders hereby waive (i)
enforcement of their rights and remedies against Company arising
from the MB Quart Receivership, including any default under any of
the Operative Documents associated directly with or arising as a
result of the MB Quart Receivership (such as a cross-default with
respect to Company’s senior credit facility with Congress Financial
Corporation (Western) due to a default under any Operative Document)
(the “Known Existing Default”) and (ii) the automatic 5% increase in
the rate of interest on the Notes (and any right to be paid such
increased rate of interest) as a result of the Known Existing
Default under Section 7.1 of the Indenture. The foregoing waivers
will be effective only for the specific default comprising the Known
Existing Default, and in no event will the foregoing waivers be
deemed to be a waiver of enforcement of the Trustee’s or Holders’
rights with respect to any other Default or Event of Default now
existing or hereafter arising. Nothing contained in this Amendment,
or in any communication between Company and the Trustee or Holders,
will be a waiver of any rights or remedies the Trustee or Holders
have or may have against Company except as specifically provided in
this Amendment. Except as specifically provided in this Amendment,
the Trustee and Holders hereby reserve all of their rights and
remedies against Company under the Operative Documents.
	 
	11.	 	Independent Advice. Each Holder acknowledges and agrees that
such Holder has had the opportunity to consult with its own counsel,
accountants and other advisers regarding the legal, tax and other
implications of this Amendment.
	 
	12.	 	Integration. This Amendment incorporates all negotiations of
the parties hereto with respect to the subject matter of this
Amendment and is the final expression and agreement of the parties
with respect to the subject matter of this Amendment.
	 
	13.	 	Severability. If any provision of this Amendment is held to
be invalid, illegal or unenforceable, such provision will be
severable from the remainder of this Amendment and the validity,
legality and enforceability of the remaining provisions of this
Amendment will not in any way be affected or impaired thereby.
	 
	14.	 	Conflict. If there is any conflict between the provisions of
this Amendment and the provisions of any of the Operative Documents,
the provisions of this Amendment will control. Except as expressly
amended hereby, the terms, conditions and provisions of the
Operative Documents remain in full force and effect.

[signature pages follow]

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[signature page (excluding Holders)]

	 	 	 	 	 
	 	
ROCKFORD CORPORATION

 	 
	 	By:  	/s/ W. Gary Suttle
 	 
	 	Name:  	W. Gary Suttle 	 
	 	Title:  	Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	AUDIO INNOVATIONS, INC.

 	 
	 	By:  	/s/ W. Gary Suttle
 	 
	 	Name:  	W. Gary Suttle 	 
	 	Title:  	President 	 
	 

	 	 	 	 	 
	 	BNY WESTERN TRUST COMPANY

 	 
	 	By:  	/s/ David A. Oeser
 	 
	 	Name:  	David A. Oeser 	 
	 	Title:  	Assistant Vice President 	 

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[Holder signature page]

	 	 	 	 	 
	 	Special Situations Fund III, L.P.	 
	 	[print name of Holder]
 	 
	 	By:  	/s/ David Greenhouse
 	 
	 	Name:  	David Greenhouse 	 
	 	Title:  	Partner 	 

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[Holder signature page]

	 	 	 	 	 
	 	Special Situations Cayman Fund, L.P.	 
	 	[print name of Holder]
 	 
	 	By:  	/s/ David Greenhouse
 	 
	 	Name:  	David Greenhouse 	 
	 	Title:  	Partner 	 

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[Holder signature page]

	 	 	 	 	 
	 	Special Situations Private Equity Fund, L.P.	 
	 	[print name of Holder]
 	 
	 	By:  	/s/ David Greenhouse
 	 
	 	Name:  	David Greenhouse 	 
	 	Title:  	Partner 	 

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[Holder signature page]

	 	 	 	 	 
	 	JP Morgan Securities Inc.	 
	 	[print name of Holder]
 	 
	 	By:  	/s/ Charlotte Chui
 	 
	 	Name:  	Charlotte Chui 	 
	 	Title:  	Vice President 	 

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[Holder signature page]

	 	 	 	 	 
	 	Hamilton Multi-Strategy Master Fund, L.P.	 
	 	[print name of Holder]
 	 
	 	By:  	/s/ James P. Wohlmagier
 	 
	 	Name:  	James P. Wohlmagier 	 
	 	Title:  	Managing Member of the General
Partner 	 

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[Holder signature page]

	 	 	 	 	 
	

	Man Mac 2 Limited	 
	

	[print name of Holder]	 
	 	 	 	 	 
	

	By: 	 Hamilton Investment Management, LLC	 
	

	 	 	   Its: Investment Adviser	 
	 	By:  	                                           /s/ James P. Wohlmagier
 	 
	 	Name:  	James P. Wohlmagier 	 
	 	Title:  	COO/Managing Member 	 

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[Holder signature page]

	 	 	 	 	 
	 	Hamilton Convertible Opportunities Master Fund, L.P. 	 
	 	[print name of Holder]
 	 
	 	By:  	/s/ James P. Wohlmagier
 	 
	 	Name:  	James P. Wohlmagier 	 
	 	Title:  	Managing Member of the General Partner 	 

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Exhibit A

Schedule of Holders

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Warrant	 	 	 	Principal Amount of	 	Number of Warrants	 	Number of Warrants
	Number
	 	Name of Holder
	 	Notes
	 	Pre-Amendment
	 	Post-Amendment

	1.

	 	Hamilton Multi-strategy
Master Fund, L.P.
	 	$	2,595,000	 	 	 	122,637	 	 	 	246,525	 
	2.

	 	Man Mac 2 Limited

	 	$	2,384,000	 	 	 	112,665	 	 	 	226,480	 
	3.

	 	Hamilton Convertible

Opportunities Master Fund, L.P.
	 	$	21,000	 	 	 	992	 	 	 	1,995	 
	4.

	 	JP Morgan Securities Inc

	 	$	5,000,000	 	 	 	236,295	 	 	 	475,000	 
	5.

	 	Special Situations Fund III, L.P.
	 	$	1,500,000	 	 	 	70,889	 	 	 	142,500	 
	6.

	 	Special Situations Cayman Fund, L.P.
	 	$	450,000	 	 	 	21,267	 	 	 	42,750	 
	7.

	 	Special Situations Private 

Equity Fund,  L.P.
	 	$	550,000	 	 	 	25,992	 	 	 	52,250	 

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Exhibit 4.9

AMENDMENT TO

WARRANTS, WARRANT AGENT AGREEMENT AND REGISTRATION RIGHTS AGREEMENT

This Amendment to Warrants, Warrant Agent Agreement and Registration Rights
Agreement (this “Amendment”) is dated as of November 12, 2004 and is among:

	•	 	Rockford Corporation, an Arizona corporation
(“Company”);
	 
	•	 	BNY Western Trust Company, a California banking
corporation (“BNY”); and
	 
	•	 	Piper Jaffray & Co. (“Piper Jaffray”).

RECITALS:

	A.	 	Company entered into a Securities Purchase Agreement, dated
as of June 10, 2004 (the “Purchase Agreement”), pursuant to which
Company issued and sold to certain Holders (the “Holders”) (i)
$12,500,000 aggregate principal amount of Company’s 4.5% Convertible
Senior Subordinated Secured Notes due 2009 (the “Notes”) and (ii)
Warrants to Purchase Common Stock for an aggregate of 590,737 shares
of Company’s Common Stock (the “Holder Warrants”). In addition,
Company also issued Warrants to Purchase Common Stock for an
aggregate of 59,073 shares of Company’s Common Stock (the “Piper
Warrants” and, together with the “Holder Warrants”, the “Warrants”)
to Piper Jaffray.
	 
	B.	 	In connection with the transactions contemplated by the
Purchase Agreement, one or more of the parties entered into the
following ancillary agreements, each of which is dated as of June
10, 2004 (together with the Purchase Agreement and the Warrants, the
“Operative Documents”):

	•	 	Warrant Agent Agreement between Company
and BNY, as Warrant Agent, relating to the Warrants;
and
	 
	•	 	Registration Rights Agreement among
Company, Piper Jaffray and Holders.

	C.	 	As Company has advised BNY and Holders, an Event of Default
occurred under Section 7.1(e) of the Indenture relating to the Notes
by virtue of the initiation of a voluntary receivership proceeding
relating to MB Quart GmbH, a Subsidiary of Company (the “MB Quart
Receivership”).
	 
	D.	 	Company has requested that BNY and Holders waive the Event of
Default arising as a result of the MB Quart Receivership and certain
additional matters arising under the Indenture (the “Known Existing
Default”). Company, Audio Innovations, Inc., BNY and Holders have
entered into an agreement to amend

 

 

	 	 	certain terms and conditions of the Operative Documents and to
waive the Known Existing Default (the “Waiver”).
	 
	E.	 	Piper Jaffray has assisted the Company to negotiate the
Waiver and, in connection with this assistance, the Company has
agreed to amend the Piper Warrants issued to Piper Jaffray to reduce
the exercise price of the Piper Warrants to equal the amended
exercise price of the Holder Warrants under the Waiver.

AGREEMENTS:

	1.	 	Defined Terms. Capitalized terms used but not defined in
this Amendment will have the meanings given them in the Operative
Documents or in the Waiver, as applicable.
	 
	2.	 	Amendment to Warrants. Section 1(c) of the Warrant
Certificate issued to Piper Jaffray is amended to reflect that the
Exercise Price of the Piper Warrants is $3.73. At the request of
Piper Jaffray and upon written notice to Company and the Warrant
Agent, Company will execute and deliver to the Warrant Agent a new
Warrant Certificate reflecting the foregoing amendment, and the
Warrant Agent will thereupon register and deliver the new Warrant
Certificate to Piper Jaffray upon surrender of the outstanding
Warrant Certificate in accordance with Section 5 of the Warrant
Agent Agreement.
	 
	3.	 	Amendment to Warrant Agent Agreement. As agreed in the
Waiver, the first “Whereas” clause in the Warrant Agent Agreement is
amended to reflect that Warrants to purchase a total of 1,246,573
shares of Company’s Common Stock have been issued to Holders and
Piper Jaffray.
	 
	4.	 	Amendment to Registration Rights Agreement. As agreed in the
Waiver, Recital A of the Registration Rights Agreement is amended to
reflect that Warrants to purchase a total of 1,187,500 shares of
Company’s Common Stock have been issued to Holders.
	 
	5.	 	Amendment of Registration Statement; Suspension of Sales.
Company agrees to amend the Registration Statement on Form S-3 that
was declared effective by the Commission on August 20, 2004, or file
a new Registration Statement, or both, to reflect the transactions
contemplated by this Amendment in accordance with Section 2(e) of
the Registration Rights Agreement. Piper Jaffray acknowledges and
agrees that, from the date of execution of this Amendment until the
amended or new Registration Statement is declared effective by the
Commission, Piper Jaffray may not sell the Warrants or underlying
            shares of Common Stock under the currently effective Registration
Statement.
	 
	6.	 	Reservation of Shares. Company agrees to take all actions
necessary, including the issuance of irrevocable instructions to its
transfer agents, to at all times have authorized, and reserved for
the purpose of issuance, not less than 105% of the

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	 	 	number of shares of Common Stock issuable upon exercise of the
Piper Warrants.
	 
	7.	 	Integration. This Amendment incorporates all negotiations of
the parties hereto with respect to the subject matter of this
Amendment and is the final expression and agreement of the parties
with respect to the subject matter of this Amendment.
	 
	8.	 	Severability. If any provision of this Amendment is held to
be invalid, illegal or unenforceable, such provision will be
severable from the remainder of this Amendment and the validity,
legality and enforceability of the remaining provisions of this
Amendment will not in any way be affected or impaired thereby.
	 
	9.	 	Conflict. If there is any conflict between the provisions of
this Amendment and the provisions of any of the Operative Documents,
the provisions of this Amendment will control. Except as expressly
amended hereby, the terms, conditions and provisions of the
Operative Documents remain in full force and effect.

	 	 	 	 	 
	 	ROCKFORD CORPORATION

 	 
	 	By:  	/s/ W. Gary Suttle
 	 
	 	Name:  	W. Gary Suttle 	 
	 	Title:  	Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	BNY WESTERN TRUST COMPANY

 	 
	 	By:  	/s/ David A. Oeser
 	 
	 	Name:  	David A. Oeser 	 
	 	Title:  	Assistant Vice President 	 
	 

	 	 	 	 	 
	 	PIPER JAFFRAY & CO.

 	 
	 	By:  	/s/ Eric Alt
 	 
	 	Name:  	Eric Alt 	 
	 	Title:  	Managing Director 	 

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