EXHIBIT 10.1
CONSENT AND AMENDMENT NO. 1 TO THE CREDIT AGREEMENT AND
AMENDMENT NO. 1 TO THE SECURITY AGREEMENT
CONSENT AND AMENDMENT NO. 1 TO THE CREDIT AGREEMENT AND AMENDMENT NO.
1 TO THE SECURITY AGREEMENT dated as of February 7, 2001 (this "Agreement")
among RECOTON CORPORATION, a New York corporation ("Recoton"), INTERACT
ACCESSORIES, INC., a Delaware corporation ("InterAct"), RECOTON AUDIO
CORPORATION, a Delaware corporation ("Audio"), AAMP OF FLORIDA, INC., a Florida
corporation ("AAMP"), and RECOTON HOME AUDIO, INC., a California corporation
("RHAI" and together with Recoton, InterAct, Audio, AAMP and RHAI, collectively,
the "Borrowers"), the Guarantors, the Lenders, XXXXXX FINANCIAL, INC., a
Delaware corporation, for itself as a Lender and as Administrative Agent and as
Senior Agent and GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation
for itself as a Lender and as Collateral Agent and as Syndication Agent. The
Administrative Agent, Senior Agent and the Collateral Agent are sometimes
referred to herein as the "Agents". Capitalized terms used herein and not
otherwise defined herein shall have the meaning set forth in the Credit
Agreement dated as of October 31, 2000 (the "Credit Agreement") among the
Borrowers, the Guarantors, the Lenders and the Agents.
R E C I T A L S:
- - - - - - - -
WHEREAS, the Borrowers, the Guarantors, the Lenders and the Agents
have entered into the Credit Agreement;
WHEREAS, the Borrowers, the Guarantors and the Senior Agent have
entered into that certain Security Agreement dated as of October 31, 2000 (the
"Security Agreement");
WHEREAS, the Borrowers have requested that the Lenders consent to (i)
the contribution by Recoton German Holding GmbH ("Recoton Germany") of (A)
99.569% of its interest in Mac Audio Electronic GmbH ("Mac Audio"), a
wholly-owned Subsidiary of Recoton Germany to Magnat Audio-Produkte GmbH
("Magnat"), a wholly-owned subsidiary of Recoton Germany, and (B) 0.431% of its
interest in Mac Audio to HECO Audio Produkte GmbH ("HECO"), a wholly-owned
Subsidiary of Recoton Germany, and (ii) the conversion of Mac Audio pursuant to
German law into a partnership named "Mac Audio Electronic GmbH & Co. KG", that
is (A) 99.569% owned by Magnat and 0.431% owned by HECO, all as set forth in
Schedule I hereto (the transactions described in clauses (i) and (ii) above and
as set forth in Schedule I hereto, collectively, the "Conversion");
WHEREAS, certain Subsidiaries have issued additional shares of capital
stock to their shareholders (and such shares have been pledged to the
Administrative Agent to the extent required by the Security Agreement) and
certain other shares of certain Hong Kong corporations have been transferred
into the name of Recoton Corporation;
WHEREAS, the Borrowers have requested that the Lenders agree to amend
Section 6.7 of the Security Agreement; and
WHEREAS, subject to the terms and conditions of this Agreement, the
Lenders have agreed to consent to the Conversion and to amend the Security
Agreement as specifically set forth herein;
NOW, THEREFORE, it is agreed as follows:
Section 1. CONSENT. Notwithstanding anything to the contrary in
Sections 7.4, 7.6 and 7.11 of the Credit Agreement, the Lenders consent to the
Conversion.
Section 2. AMENDMENT TO THE SECURITY AGREEMENT. Section 6.7 of the
Security Agreement is hereby amended as of October 31, 2000 by deleting the
phrase "in the aggregate" in the first sentence of Section 6.7 and substituting
therefor the word "individually".
Section 3. AMENDMENT TO SCHEDULE 4.1(A) (CAPITALIZATION) TO THE CREDIT
AGREEMENT. Schedule 4.1(A) to the Credit Agreement is hereby amended effective
as of the date of the Conversion by revising item 4(e)(viii) to read as set
forth on Attachment 1-A. In addition, to reflect the issuance of additional
shares of capital stock, effective as of December 21, 2000 item 4(e)(xi) of
Schedule 4.1(A) is revised to read as set froth on Attachment 1-B and item 8 is
revised to read as set forth on Attachment 1-C. Furthermore, to reflect certain
transfers previously noted as in-progress, item 6 and item 7 (other than clause
(e) regarding subsidiaries) is revised to read as set forth on Attachment 1-D.
Section 4. REPRESENTATIONS AND WARRANTIES. The Borrowers and
Guarantors hereby represent and warrant to each Agent and each Lender that after
giving effect to this Agreement:
(a) no Default or Event of Default has occurred and is continuing on
and as of the date hereof;
(b) the representations and warranties of the Borrowers and the other
Loan Parties contained in the Credit Agreement and the other Loan Documents are
true and correct on and as of the date hereof as if made on and as of the date
hereof, except to the extent such representations and warranties expressly
relate to a different date; and
(c) the execution and delivery by the Borrowers and the Guarantors of
this Agreement and the performance by the Borrowers and the Guarantors of all of
their respective agreements and obligations under this Agreement, the Credit
Agreement, the Security Agreement, as consented to and amended hereby,
respectively, are within the power and authority of the Borrowers and the
Guarantors and have been duly authorized by all necessary action on the part of
the Borrowers and the Guarantors, and that the execution and delivery by the
Borrowers and the Guarantors, of this Agreement and the performance by each of
the transactions contemplated hereby will not contravene any term or condition
set forth in any material agreement or instrument to which each is a party or by
which each is bound.
Section 5. EFFECTIVENESS. This Agreement shall become effective when
the Requisite Lenders shall have executed and delivered a counterpart of this
Agreement and received duly executed counterparts of this Agreement from the
Borrowers and Guarantors (which aforesaid executions and deliveries may be
effected by delivery and receipt by facsimile transmission).
Section 6. STATUS OF LOAN DOCUMENTS.
(a) This Agreement is limited solely for the purposes and to the
extent expressly set forth herein, and, except as expressly provided hereby, (i)
the terms, provisions and conditions of the Loan Documents and (ii) the Liens
granted under the Loan Documents shall continue in full force and effect and are
hereby ratified and confirmed in all respects.
(b) No consent or amendment of any terms or provisions of the Credit
Agreement or the Security Agreement, respectively, made hereunder shall relieve
the Borrowers and Guarantors from complying with any other term or provision of
the Credit Agreement, the Security Agreement or any other Loan Document.
Section 7. MISCELLANEOUS.
(a) NO WAIVER, CUMULATIVE REMEDIES. No failure or delay or course of
dealing on the part of any Agent or any Lender in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder. The rights, powers and remedies herein expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the Lenders
would otherwise have. No notice to or demand on the Borrowers or Guarantors in
any case shall entitle the Borrowers or Guarantors to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Lenders to any other or further action in any circumstances
without notice or demand.
(b) EXPENSES. The Borrowers agree to pay and reimburse the
Administrative Agent and Lenders for all of their costs and expenses (including,
without limitation, costs and expenses of legal counsel) in connection with this
Agreement.
(c) HEADINGS DESCRIPTIVE. The headings of the several Sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision.
(d) SEVERABILITY. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
(e) COUNTERPARTS. This Agreement may be executed and delivered in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A
complete set of counterparts shall be lodged with each of Recoton and the
Administrative Agent.
Section 8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective duly authorized officers as
of the date first written above.
BORROWERS: RECOTON CORPORATION
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Senior Vice President - Finance
INTERACT ACCESSORIES, INC.
RECOTON AUDIO CORPORATION
AAMP OF FLORIDA, INC.
RECOTON HOME AUDIO, INC.
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
GUARANTORS: CHRISTIE DESIGN CORPORATION
RECOTON INTERNATIONAL HOLDINGS, INC.
RECOTON EUROPEAN HOLDINGS, INC.
RECOTON JAPAN, INC.
RECONE, INC.
RECOTON CANADA LTD.
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
LENDERS: XXXXXX FINANCIAL, INC.,
individually and as Senior Agent and
Administrative Agent
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION,
individually and as Collateral Agent
and Syndication Agent
By:
------------------------------------
Name:
Title:
BANK OF AMERICA
By: /s/ X. Xxxxxxxxx Xxxxxx, III
------------------------------------
Name: X. Xxxxxxxxx Xxxxxx, III
Title: Vice President
THE CIT GROUP / BUSINESS CREDIT, INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
GUARANTY BUSINESS CREDIT CORPORATION
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President and CEO
DAIMLER CHRYSLER CAPITAL
By: /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: President, Asset Based Lending
Division
FOOTHILL CAPITAL
By: /s/ Xxxx Xxxxxxxxxx
------------------------------------
Name: Xxxx Xxxxxxxxxx
Title: Vice President
CITIZENS BUSINESS CREDIT
By: /s/ Xxxxxxx X. X'Xxxxx
------------------------------------
Name: Xxxxxxx X. X'Xxxxx
Title: Senior Vice President
FIRSTAR BANK
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Senior Vice President
WASHINGTON MUTUAL BANK
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
SIEMENS FINANCIAL SERVICES, INC.
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President - Credit
GMAC BUSINESS CREDIT LLC
By: /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Director
ATTACHMENT 1-A
VII) MAC AUDIO ELECTRONIC GMBH & Co, KG
a) PARTNERS (PERCENTAGE INTEREST): Magnat Audio-Produkte GmbH
(99.569%) and HECO Audio Produkte GmbH (0.431%)
b) JURISDICTION OF FORMATION: Germany
ATTACHMENT 1-B
XI) RECOTON (UK) LIMITED
a) AUTHORIZED SHARES: 35,570,714 ordinary shares at(pound)0.10 each
b) ISSUED SHARES (SHAREHOLDER): 35,570,714 (Recoton European
Holdings, Inc.)
c) TREASURY SHARES: None
d) JURISDICTION OF INCORPORATION: United Kingdom
ATTACHMENT 1-C
8. RECOTON CANADA LTD.
a) AUTHORIZED SHARES: unrestricted
b) ISSUED SHARES: 400,440 (AFLE & Co, as record nominee for Xxxxxx
Financial, Inc., holding pursuant to pledge by Recoton)
c) TREASURY SHARES: None
d) JURISDICTION OF INCORPORATION: Ontario
ATTACHMENT 1-D
6. STD TECHNOLOGY HOLDING, LTD.
a) AUTHORIZED SHARES: 10,000 shares of HK$1.00 each
b) ISSUED SHARES (SHAREHOLDER): 100 (99 shares are registered in the
name of Recoton Corporation and 1 share is registered in the name
of Xxxxxxx Xxx Xxx Xxx)
c) TREASURY SHARES: None
d) JURISDICTION OF INCORPORATION: Hong Kong
e) SUBSIDIARIES:
1. STD Technology (Shenzhen) Limited
a) REGISTERED CAPITAL: US$1,200,000
b) SHAREHOLDER: STD Technology Holding, Ltd.
c) TREASURY SHARES: None
d) JURISDICTION OF INCORPORATION: People's Republic of
China (the company is awaiting the issuance of its
business license, expected to be issued in early
February 2001).
7. RECOTON (FAR EAST) LIMITED
a) AUTHORIZED SHARES: 1,000 at HK$10.00 per share
b) ISSUED SHARES (SHAREHOLDER): 1000 (999 owned by and registered in
the name of Recoton Corporation and 1 in the name of Xxxxxx
Xxxxxxxxx as nominee for Recoton)
c) TREASURY SHARES: None
d) JURISDICTION OF INCORPORATION: Hong Kong