Exhibit 18G
AMENDMENT AGREEMENT
AMENDMENT AGREEMENT (this "AGREEMENT"), dated as of December 31, 1998,
to the several Note Purchase Agreements (collectively, as amended and in effect
prior to the amendment effected hereby, the "EXISTING NOTE AGREEMENT" and,
immediately after giving effect to the such amendment, the "AMENDED NOTE
AGREEMENT"), each dated as of January 6, 1997, between Recoton Corporation, a
New York corporation (the "COMPANY"), and each of the purchasers (collectively,
together with their respective successors and assigns, the "NOTEHOLDERS") of the
Adjustable Rate Senior Notes Due January 6, 2007 issued thereunder, is entered
into as of December 31, 1998 by the Company and each of the Noteholders.
PRELIMINARY STATEMENT:
The Company has requested that the Noteholders consent to the
amendment of the Existing Note Agreement (to become retroactively effective as
of December 31, 1998) set forth herein. Subject to the terms and conditions of
this Agreement, the Noteholders are willing to amend the Existing Note Agreement
as set forth herein.
AGREEMENT:
1. DEFINED TERMS.
All capitalized terms used but not specifically defined in this
Agreement have the respective meanings assigned to them in, or pursuant to the
provisions of, the Existing Note Agreement. As used in this Agreement, the term
"TRANSACTION DOCUMENTS" means, collectively, each of this Agreement, the Amended
Note Agreement, the Notes and the Subsidiary Guaranty.
2. REPRESENTATIONS AND WARRANTIES.
The Company warrants and represents to each Noteholder that as of the
Effective Date (as defined below):
2.1 AUTHORIZATION, ETC. This Agreement has been duly authorized by all
necessary corporate action on the part of the Company, and each of the
Transaction Documents constitutes a legal, valid and binding obligation of the
Company and each of the Subsidiaries party thereto, enforceable against the
Company and such Subsidiaries, as the case may be, in accordance with its terms,
except as such enforceability may be limited by (a) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
2.2 DISCLOSURE. None of the written statements, documents or other
written materials (including, without limitation, the financial statements and
related certificates most recently provided to the Noteholders pursuant to
paragraph 5A of the Existing Note Agreement) furnished by, or on behalf of, the
Company to the Noteholders in connection with the negotiation, execution and
delivery of this Agreement contain any untrue statement of a material fact or
omit a material fact necessary to make the statements contained therein or
herein not misleading in light of the circumstances in which they were made.
There is no fact which the Company has not disclosed to the Noteholders which
materially affects adversely or, so far as the Company can now foresee, will
materially affect adversely the business, prospects, profits, Properties or
condition (financial or otherwise) of the Company and its Subsidiaries, taken as
a whole, or the ability of the Company to perform its obligations set forth in
the Transaction Documents.
2.3 GOVERNMENTAL AUTHORIZATIONS, ETC. No consent, approval or
authorization of, or registration, filing or declaration with, any court or
administrative or governmental body is required in connection with the
execution, delivery or performance by the Company of this Agreement.
2.4 LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.
(a) Except for the investigation by the United States Customs
Service and United States Attorney's office in Tampa, Florida
disclosed in the Company's Form 10-K for the year ended December 31,
1997, there are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company
or any Subsidiary or any Property of the Company or any Subsidiary in
any court or before any arbitrator of any kind or before or by any
governmental body that, individually or in the aggregate, could
reasonably be expected to have a material adverse effect on the
business, condition (financial or otherwise) or operations of the
Company and the Subsidiaries taken as a whole.
(b) After giving effect to the amendment to be effected by
Section 4, neither the Company nor any Subsidiary is in default under
any term of any agreement or instrument to which it is a party or by
which it is bound, or any order, judgment, decree or ruling of any
court, arbitrator or governmental body or is in violation of any
applicable law, ordinance, rule or regulation (including, without
limitation, all federal, state, local and regional statutes, laws,
ordinances and judicial or administrative orders, judgments, rulings
and regulations relating to the protection of the environment) of any
court or administrative or governmental body, which default or
violation, individually or in the aggregate, could reasonably be
expected to have a material adverse effect on the business, condition
(financial or otherwise) or operations of the Company and the
Subsidiaries taken as a whole.
2.5 NO DEFAULTS. No event has occurred and is continuing and no
condition exists which, upon the effectiveness of the amendments provided for in
this Agreement, would constitute a Default or Event of Default.
3. CONDITIONS PRECEDENT
The amendment to be effected by Section 4 shall become retroactively
effective, as of December 31, 1998, at such time as the Company and each of the
Noteholders shall have executed and delivered this Agreement (the time and date
of such execution and delivery is referred to herein as the "EFFECTIVE DATE");
the willingness of the Noteholders to execute and deliver this Agreement is
contingent on the satisfaction of each of the following conditions (which shall
be deemed to have been satisfied upon such execution and delivery; however, no
such deemed satisfaction shall affect the provisions of Section 6.3):
3.1 CONSENT OF NOTEHOLDERS. The Company and each Noteholder shall have
executed and delivered a counterpart of this Agreement.
3.2 WARRANTIES AND REPRESENTATIONS TRUE; COMPLIANCE WITH THIS
AGREEMENT.
(A) WARRANTIES AND REPRESENTATIONS TRUE. The warranties and
representations contained in Section 2 shall be true on the Effective
Date with the same effect as though made on and as of that date.
(B) COMPLIANCE WITH THIS AGREEMENT. The Company shall have
performed and complied with all agreements and conditions contained
herein that are required to be performed or complied with by the
Company on or prior to the Effective Date, and such performance and
compliance shall remain in effect on the Effective Date.
3.3 BANK AGREEMENT. The Company shall have delivered to each
Noteholder a true and correct copy of an amendment to the Bank Credit Agreement,
which amendment shall be in form and substance satisfactory to each Noteholder,
and pursuant to which the defined term "EBITDA" therein contained shall have
been amended substantially in conformity with the amendment to the term
"Consolidated EBITDA" set forth in Section 4. No "Default" or "Event of Default"
under, and as defined in, the Bank Credit Agreement shall exist on the Effective
Date.
3.4 1998 NOTE PURCHASE AGREEMENT. The Company shall have delivered to
each Noteholder a true and correct copy of an amendment to the Company's Note
Purchase Agreement, dated as of September 1, 1998 (as amended, the "1998 NOTE
PURCHASE AGREEMENT"), pursuant to which it issued $25,000,000 in aggregate
principal amount of its Adjustable Rate Senior Notes Due September 1, 2008,
which amendment shall be in form and substance satisfactory to each Noteholder,
and pursuant to which the defined term "Consolidated EBITDA" therein contained
shall have been amended substantially in conformity with the amendment to the
term "Consolidated EBITDA" set forth in Section 4. No "Default" or "Event of
Default" under, and as defined in, the 1998 Note Purchase Agreement shall exist
on the Effective Date.
3.5 SUBORDINATED DEBT ISSUANCE. The Company shall have delivered to
each Noteholder a true and correct copy of an amendment to the Company's
Securities Purchase Agreement, dated as of February 4, 1999 (as amended, the
"SENIOR SUBORDINATED NOTE AGREEMENT"), pursuant to which it issued $35,000,000
in aggregate principal amount of its Senior Subordinated Notes Due February 4,
2004, which amendment shall be in form and substance satisfactory to each
Noteholder, and pursuant to which the defined term "Consolidated EBITDA" therein
contained shall have been amended substantially in conformity with the amendment
to the term "Consolidated EBITDA" set forth in Section 4. No "Default" or "Event
of Default" under, and as defined in, the Senior Subordinated Note Agreement
shall exist on the Effective Date.
3.6 EXPENSES. All fees and disbursements required to be paid pursuant
to Section 6.2 shall have been paid in full, including, but not limited to, the
statement for reasonable fees and disbursements of Xxxx & Xxxxxx, the
Noteholders' special counsel, presented to the Company on or prior to the
Effective Date.
3.7 PROCEEDINGS SATISFACTORY. All proceedings taken in connection with
the execution and delivery of this Agreement and the transactions contemplated
hereby shall be satisfactory to the Noteholders and their special counsel; and
the Noteholders and their special counsel shall have received copies of such
documents and papers as they may reasonably request in connection therewith.
4. AMENDMENT TO EXISTING NOTE AGREEMENT.
Each of the Company and the Noteholders hereby consents and agrees
that the defined terms "Consolidated Adjusted Cash Flow" and "Consolidated
EBITDA" in paragraph 10B of the Existing Note Agreement are hereby amended and
restated in their entirety to read, respectively, as follows:
"CONSOLIDATED ADJUSTED CASH FLOW" shall mean, for any period,
(i) Consolidated Operating Income for such period, PLUS
(ii) to the extent, and only to the extent, that such amount
was deducted in the computation of Consolidated Net Income for
such period, the aggregate amount of depreciation and
amortization of the Company and the Restricted Subsidiaries,
determined on a consolidated basis for such Persons;
PROVIDED, HOWEVER, that, if for any period prior to December
31, 1999 Consolidated Net Income shall be reduced as a result of the
establishment by the Company of a reserve for the eventual resolution
of the investigation by the United States Customs Service and United
States Attorney's office in Tampa, Florida disclosed in the Company's
Form 10-K for the year ended December 31, 1997, there shall be added to
Consolidated Net Income for such period an amount equal to such
reduction (provided that the aggregate of the amounts added to
Consolidated Net Income for all such periods pursuant to this proviso
shall not exceed $15,000,000)."
"CONSOLIDATED EBITDA" shall mean, for any period,
(i) Consolidated Net Income for such period, PLUS
(ii) without duplication and only to the extent deducted
from revenues in the determination of Consolidated Net Income for
such period, the sum of (a) income tax expense, (b) interest
expense, amortization or writeoffs of debt discount and debt
issuance costs and commissions, discounts and other fees and
charges associated with the issuance of Debt (including the
Notes), (c) depreciation and amortization expense and (d)
amortization of intangibles (including, but not limited to,
goodwill) and organization costs, MINUS
(iii) only to the extent included in the determination of
Consolidated Net Income for such period, the sum of (a) interest
income and (b) income tax credits, all determined on a
consolidated basis;
PROVIDED, HOWEVER, that, if for any period prior to December
31, 1999 Consolidated Net Income shall be reduced as a result of the
establishment by the Company of a reserve for the eventual resolution
of the investigation by the United States Customs Service and United
States Attorney's office in Tampa, Florida disclosed in the Company's
Form 10-K for the year ended December 31, 1997, there shall be added to
Consolidated Net Income for such period an amount equal to such
reduction (provided that the aggregate of the amounts added to
Consolidated Net Income for all such periods pursuant to this proviso
shall not exceed $15,000,000)."
5. AFFIRMATION OF OBLIGATIONS.
Except as expressly amended by this Agreement, (a) no terms or
provisions of any agreement are modified or changed by this Agreement, (b) the
terms and provisions of the Transaction Documents shall continue in full force
and effect and (c) the terms and provisions of the Transaction Documents are
hereby ratified, confirmed and approved in all respects.
6. MISCELLANEOUS.
6.1 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and
shall inure to the benefit of, the successors and assigns of the parties hereto
and the holders from time to time of the Notes.
6.2 FEES AND EXPENSES. On the Effective Date, the Company shall pay
all reasonable costs and expenses of the Noteholders relating to this Agreement,
including, but not limited to, the statement for reasonable fees and
disbursements of the Noteholders' special counsel presented to the Company on or
prior to the Effective Date. The Company will also pay, upon receipt of any
statement thereof, each additional statement for reasonable fees and
disbursements of the Noteholders' special counsel rendered after the Effective
Date in connection with this Agreement. The obligations of the Company under
this Section 6.2 shall survive the termination of this Agreement.
6.3 SURVIVAL. All warranties, representations, certifications and
covenants made by the Company in this Agreement or in any certificate or other
instrument delivered by it or on its behalf under this Agreement shall be
considered to have been relied upon by the Noteholders and shall survive the
execution of this Agreement, regardless of any investigation made by or on
behalf of any Noteholder. All such statements made herein or in any such
certificate or other instrument shall constitute warranties and representations
of the Company under this Agreement and the Amended Note Agreement.
6.4 GOVERNING LAW. This Agreement shall be construed, interpreted and
enforced in accordance with, and governed by, the laws of the State of New York,
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
6.5 SECTION HEADINGS, ETC. The titles of the Sections hereof appear as
a matter of convenience only, do not constitute a part hereof and shall not
affect the construction hereof. The words "herein," "hereof," "hereunder" and
"hereto" refer to this Agreement as a whole and not to any particular Section or
other subdivision. References to Sections are, unless otherwise specified,
references to Sections of this Agreement.
6.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts and shall be effective when at least one counterpart shall have
been executed by each party hereto, and each set of counterparts which,
collectively, show execution by each such party hereto shall constitute one
duplicate original. Any party hereto may execute and deliver a counterpart of
this Agreement by delivering by facsimile transmission a signature page of this
Agreement signed by such party, and such facsimile signature shall be treated in
all respects as having the same effect as an original signature.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. NEXT PAGE IS SIGNATURE PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on their behalf by a duly authorized officer or agent thereof, as
the case may be, as of the date first above written.
RECOTON CORPORATION
By /s/ Xxxxxx Xxxxxxx
------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By /s/ Xxxxx X. Xxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
XXXX XXXXXXX MUTUAL LIFE
INSURANCE COMPANY
By /s/ Xxxxxx X. Xxxxx
----------------------------
Name: Xxxxxx X. Xxxxx
Title: Authorized Officer
XXXX XXXXXXX VARIABLE LIFE
INSURANCE COMPANY
By /s/ Xxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Authorized Officer
The decision to participate MELLON BANK, N.A., solely in its capacity
in this investment, as Trustee for THE LONG-TERM INVESTMENT
any representations made herein TRUST, (as directed by Xxxx Xxxxxxx
by the participant, and any Mutual Life Insurance Company),
actions taken hereunder and not in its individual capacity
by the participant has/have been
made solely at the direction of
the investment fiduciary
who has sole investment discretion
with respect to this investment.
By /s/ Xxxxxxxxxx Xxxx
------------------------------
Name: Xxxxxxxxxx Xxxx
Title: Authorized Signatory
INVESTORS PARTNER LIFE INSURANCE COMPANY
By /s/ Xxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Authorized Officer
The decision to participate in
this investment, MELLON BANK, N.A., solely in its capacity
any representations as Trustee for XXXX ATLANTIC MASTER
made herein by the TRUST, (as directed by Xxxx Xxxxxxx
participant, and any Mutual Life Insurance Company),
actions taken hereunder and not in its individual capacity
by the participant has/have
been made solely
at the direction of the
investment fiduciary
who has sole investment discretion with
respect to this investment.
By /s/ Xxxxxxxxxx Xxxx
---------------------------
Name: Xxxxxxxxxx Xxxx
Title: Authorized Signatory
THE NORTHERN TRUST COMPANY,
AS TRUSTEE FOR LUCENT TECHNOLOGIES INC.
MASTER PENSION TRUST
By: XXXX XXXXXXX MUTUAL LIFE
INSURANCE COMPANY, as Investment
Manager
By /s/ Xxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Authorized Officer
XXXX XXXXXXX REASSURANCE COMPANY LTD.
By /s/ Xxxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Second Vice President
