AMENDMENT AGREEMENT
AMENDMENT AGREEMENT (this "AGREEMENT"), dated as of May 13, 1997, by and
among RECOTON CORPORATION, a New York corporation (together with its successors
and assigns, the "COMPANY"), THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, XXXX
XXXXXXX MUTUAL LIFE INSURANCE COMPANY, XXXX XXXXXXX VARIABLE LIFE INSURANCE
COMPANY, MELLON BANK, N.A. (SOLELY IN ITS CAPACITY AS TRUSTEE FOR THE LONG TERM
INVESTMENT TRUST, AS DIRECTED BY XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY, AND
NOT IN ITS INDIVIDUAL CAPACITY), XXXX XXXXXXX LIFE INSURANCE COMPANY OF AMERICA
and MELLON BANK, N.A. (SOLELY IN ITS CAPACITY AS TRUSTEE FOR THE NYNEX MASTER
PENSION TRUST, AS DIRECTED BY XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY, AND
NOT IN ITS INDIVIDUAL CAPACITY) (collectively, the "NOTEHOLDERS").
RECITALS:
A. The Company has entered into that certain Note Purchase Agreement, dated
as of January 6, 1997 (the "EXISTING NOTE PURCHASE AGREEMENT" and, as amended
hereby, the "AMENDED NOTE PURCHASE AGREEMENT" ), with the Noteholders, pursuant
to which the Company originally issued and sold to the Noteholders an aggregate
principal amount of $75,000,000 of the Company's Adjustable Rate Senior Notes
due January 6, 2007.
B. The Noteholders are the current holders of 100% of the Notes outstanding
as of the date hereof (the "AMENDMENT DATE").
C. The Company has requested that certain of the provisions in the Existing
Note Purchase Agreement be amended, as more particularly provided herein.
D. The Noteholders are agreeable, subject to the terms and conditions set
forth below, to amending the Existing Note Purchase Agreement, and in connection
therewith, the Company and the Noteholders have agreed to amend the Existing
Note Purchase Agreement as set forth herein.
E. Unless otherwise expressly provided for herein, capitalized terms used
herein and defined in the Existing Note Purchase Agreement are used herein with
the meanings ascribed to them in the Existing Note Purchase Agreement.
AGREEMENT:
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. AMENDMENTS.
The Company and, subject to the satisfaction of the conditions set forth in
Section 4, the Noteholders hereby consent and agree to the following amendments
to the Existing Note Purchase Agreement, such amendments to be deemed to have
been in effect on and after the Closing Date:
(I) PARAGRAPH 6C -- subclause (a) of clause (iii) of paragraph 6C
shall be amended and restated in its entirety as follows:
(a) the sum of (x) Consolidated Funded Debt plus (y) Excess
Current Debt shall be less than or equal to
(1) $110,000,000, if the incurrence of such Funded Debt
occurs on or after the Closing Date and before June 30, 1997,
(2) 55% of Consolidated Tangible Gross Worth, determined as
at the end of the then most recently ended fiscal quarter of the
Company, if the incurrence of such Funded Debt occurs on or after
June 30, 1997 and prior to December 31, 1997, and
(3) 50% of Consolidated Tangible Gross Worth, determined as
at the end of the then most recently ended fiscal quarter of the
Company, if the incurrence of such Funded Debt occurs after
December 31, 1997, and
(II) PARAGRAPH 6E -- paragraph 6E shall be amended and restated in its
entirety as follows:
6E. NET WORTH. The Company will not at any time permit
Consolidated Tangible Net Worth to be less than
(i) if such time is on or after the Closing Date and before
June 30, 1997, $87,000,000, and
(ii) if such time is on or after June 30, 1997, the sum of
(a) $90,000,000, plus
(b) the sum of the Annual Net Worth Increase
Amounts for all fiscal years ended after the Closing Date.
"Annual Net Worth Increase Amount" means, for any fiscal
year of the Company ended after December 31, 1996, the greater of
(a) 50% of Consolidated Net Income for such fiscal year and (b)
$0.
SECTION 2. AFFIRMATION.
The Company hereby acknowledges and affirms all of its obligations under
the terms of the Note Purchase Agreement.
SECTION 3. WARRANTIES AND REPRESENTATIONS.
To induce the Noteholders to enter into this Agreement, the Company
warrants and represents to the Noteholders that as of the Amendment Date:
3.1 ACTIONS PENDING. Except as set forth in Part 8C of Annex 3 to the Note
Purchase Agreement, there is no action, suit, investigation or proceeding
pending or, to the knowledge of the Company, threatened against the Company or
any of the Subsidiaries, or any Properties of the Company or any of the
Subsidiaries, by or before any court, arbitrator or administrative or
governmental body which might result in any material adverse change in the
business, condition (financial or otherwise) or operations of the Company and
the Subsidiaries taken as a whole.
3.2 NO DEFAULTS. No Defaults or Events of Default exist under the terms of
the Amended Note Purchase Agreement.
SECTION 4. CONDITIONS.
The consent of the Noteholders to the amendments set forth in Section 1
shall be effective as of the Closing Date upon the execution hereof by the
Company and the Required Holders and receipt of an executed copy of an
acceptable waiver of any violations of covenants contained in the Bank Credit
Agreement.
SECTION 5. MISCELLANEOUS.
5.1 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK.
5.2 DUPLICATE ORIGINALS.
Two or more duplicate originals of this Agreement may be signed by the
parties, each of which shall be an original but all of which together shall
constitute one and the same instrument. This Agreement may be executed in one or
more counterparts and shall be effective when at least one counterpart shall
have been executed by the Company and the Required Holders, and each set of
counterparts which, collectively, show execution by each party hereto shall
constitute one duplicate original.
5.3 EFFECT OF THIS AGREEMENT.
Except as specifically provided in this Agreement, no terms or provisions
of the Existing Note Purchase Agreement have been modified or changed by this
Agreement and the terms and provisions of the Existing Note Purchase Agreement,
as amended hereby, shall continue in full force and effect.
5.4 WAIVERS AND AMENDMENTS OF THIS AGREEMENT.
Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated orally, or by any action or inaction, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.
5.5 SECTION HEADINGS.
The titles of the sections hereof appear as a matter of convenience only,
do not constitute a part of this Agreement and shall not affect the construction
hereof.
5.6 COSTS AND EXPENSES.
The Company shall pay promptly (and in any event within 30 days of
receiving a statement therefor) all costs and expenses of the Noteholders
related hereto, including, but not limited to, the statement for fees and
disbursements of the Noteholders' special counsel for matters in connection with
this Agreement. The obligations of the Company under this Section 5.6 shall
survive the payment or prepayment of the Notes and the termination of the
Amended Note Purchase Agreement.
5.7 SURVIVAL.
All warranties, representations, certifications and covenants made by the
Company hereunder, or in any certificate or other instrument delivered pursuant
hereto or thereto, 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 the Noteholders.
5.8 SUBSIDIARY CONSENTS.
The Company covenants to obtain an executed consent to this Agreement from
each of its Subsidiaries that is a party to a Subsidiary Guaranty within ten
days after the date hereof. This covenant shall be deemed to be an agreement of
the type referred to in paragraph 7A(iv) of the Amended Note Purchase Agreement.
[REMAINDER OF PAGE INTENTIONALLY 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
----------------------------------------
Name:
Title:
The foregoing Agreement is hereby accepted as of the date first above written.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By
Name: Xxxxx X. Xxxxxx
Title: Vice President
XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY
By
Name:
Title:
XXXX XXXXXXX VARIABLE LIFE INSURANCE COMPANY
By
Name:
Title:
[Signature page to the Amendment Agreement among Recoton
Corporation and the Noteholders listed therein.]
MELLON BANK, N.A., SOLELY IN ITS CAPACITY AS TRUSTEE FOR THE LONG TERM
INVESTMENT TRUST, (AS DIRECTED BY XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY),
AND NOT IN ITS INDIVIDUAL CAPACITY
The decision to participate in this investment, any representations made herein
by the participant, and any actions taken hereunder by the participant has/have
been made solely at the discretion of the investment fiduciary who has sole
investment discretion with respect to this investment.
By [SEAL]
Name:
Title:
XXXX XXXXXXX LIFE INSURANCE COMPANY OF AMERICA
By
Name:
Title:
MELLON BANK, N.A., SOLELY IN ITS CAPACITY AS TRUSTEE FOR THE NYNEX MASTER
PENSION TRUST, (AS DIRECTED BY XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY), AND
NOT IN ITS INDIVIDUAL CAPACITY
The decision to participate in this investment, any representations made herein
by the participant, and any actions taken hereunder 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 [SEAL] Name: Title:
By [SEAL]
Name:
Title:
[Signature page to the Amendment Agreement among Recoton Corporation and the
Noteholders listed therein.]