EXHIBIT 10.33
SECOND AMENDMENT AGREEMENT
SECOND AMENDMENT AGREEMENT (this "AGREEMENT"), dated as of August 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, as amended by that certain Amendment Agreement
dated as of May 13, 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 6D - paragraph 6D shall be amended and
restated in its entirety as follows:
6D. INTEREST EXPENSE COVERAGE. The Company
will not permit the ratio of
(i) Consolidated Adjusted Cash Flow for
any period of four consecutive complete fiscal
quarters of the Company to
(ii) Consolidated Interest Expense for
such period to be less than (a) if such period
ends on or after the Closing Date and on or prior
to September 30, 1997, 2.50 to 1.00, and (b) if
such period ends after September 30, 1997, 3.50 to
1.00.
(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,
(ii) if such time is on or after June
30, 1997 and before December 31, 1997,
$88,000,000, and
(iii) if such time is on or after
December 31, 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 Existing 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 /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Treasurer & Assistant Secretary
The foregoing Agreement is hereby accepted as of the date first above written.
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: Senior Investment Officer
XXXX XXXXXXX VARIABLE LIFE INSURANCE COMPANY
By /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Authorized Officer
[Signature page to the Amendment Agreement among Recoton
Corporation and the Noteholders listed therein.]
MELLON BANK, N.A., SOLELY IN ITS CAPACITY AS The decision to participate in this investment,
TRUSTEE FOR THE LONG TERM INVESTMENT TRUST, any representations made herein by the
(AS DIRECTED BY XXXX XXXXXXX MUTUAL LIFE INSURANCE participant, and any actions taken hereunder
COMPANY), AND NOT IN ITS INDIVIDUAL CAPACITY 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 /s/ Xxxxxx Xxxxx [SEAL]
Name: /s/ Xxxxxx Xxxxx
Title: Authorized Signatory
XXXX XXXXXXX LIFE INSURANCE COMPANY OF AMERICA
By /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Authorized Officer
MELLON BANK, N.A., SOLELY IN ITS CAPACITY AS The decision to participate in this investment,
TRUSTEE FOR THE NYNEX MASTER PENSION TRUST, any representations made herein by the
(AS DIRECTED BY XXXX XXXXXXX MUTUAL LIFE INSURANCE participant, and any actions taken hereunder
COMPANY), AND NOT IN ITS INDIVIDUAL CAPACITY 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 /s/ Xxxxxx Xxxxx [SEAL]
Name: /s/ Xxxxxx Xxxxx
Title: Authorized Signatory
[Signature page to the Amendment Agreement among Recoton Corporation
and the Noteholders listed therein.]