CONFORMED COPY
SIXTH AMENDMENT AND CONSENT, dated as of May 28, 2002 (this "Amendment and
Consent"), to the Fourth Amended and Restated Credit Agreement, dated as of July
28, 1999 (as amended pursuant to the First Amendment and Consent thereto, dated
as of October 12, 1999, the Second Amendment thereto, dated as of December 20,
1999, the Third Amendment thereto, dated as of April 14, 2000, the Fourth
Amendment and Waiver thereto, dated as of June 5, 2001, and the Fifth Amendment
and Waiver thereto, dated as of March 14, 2002, and as the same may further be
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Audiovox Corporation, a Delaware corporation (the
"Borrower"), the several banks and other financial institutions from time to
time parties thereto (collectively, the "Lenders"; individually, a "Lender"),
and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), a New York
banking corporation, as administrative and collateral agent for the Lenders (in
such capacity, the "Agent").
W I T N E S S E T H :
WHEREAS, the Borrower, the Lenders and the Agent are parties to the Credit
Agreement;
WHEREAS, the Borrower has requested that the Lenders amend certain terms in
the Credit Agreement in the manner provided for herein;
WHEREAS, the Borrower has also requested that the Agent and the Lenders
consent to the release of the Capital Stock of Audiovox Communications Corp., a
Subsidiary of the Borrower, from the Lien of the Collateral Agent, for the
benefit of the Lenders on such Capital Stock; and
WHEREAS, the Agent and the Lenders are willing to agree to the requested
amendments and to provide the requested consent, on the terms and conditions
provided for herein;
NOW, THEREFORE, in consideration of the premises contained herein, the
parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms which are defined
in the Credit Agreement and used herein (and in the recitals hereto) as defined
terms are so used as so defined.
2. Amendments to Section 1. Subsection 1.1 of the Credit Agreement is
hereby amended as follows:
(a) by deleting therefrom the definition of the following defined term
in its entirety and substituting in lieu thereof the following definition:
"Borrowing Base": on any date of determination thereof, the sum
of (a) 75% of the aggregate amount of Eligible Accounts of the
Borrower and its consolidated Domestic and Canadian Subsidiaries on
such date of determination and (b) the lesser of (i) 30% of the
aggregate amount of Eligible Inventory of the Borrower and its
consolidated Domestic and Canadian Subsidiaries on such date of
determination and (ii) $25,000,000. The Borrowing Base shall be
reduced from time to time by an amount equal to the Foreign Exchange
Liabilities of the Borrower as most recently determined prior to such
time by the Agent pursuant to subsection 6.16. The Borrowing Base
shall be determined by the Agent in its sole discretion exercising
reasonable judgment from time to time by reference to the most recent
Exhibit 99.10
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monthly Borrowing Base Certificate delivered to the Agent
pursuant to subsection 9.2(g). The Agent shall determine the Borrowing
Base in effect on the first Business Day of each month during the
Commitment Period and shall send a Borrowing Base Notice on such
Business Day of the Borrower and each Lender setting forth the
Borrowing Base as so determined. The Agent shall also send a Borrowing
Base Notice to the Borrower and each Lender on each Business Day on
which the Borrowing Base is changed other than pursuant to the
immediately preceding sentence setting forth the Borrowing Base as so
changed.
(b) by adding thereto the following definitions is their
appropriate alphabetical order:
"Sixth Amendment and Consent": the Sixth Amendment and
Consent, dated as of May 28, 2002, to this Agreement.
"Sixth Amendment Effective Date": May 28, 2002.
"Toshiba Note": the subordinated convertible promissory note
issued by Audiovox Communications Corp., substantially in the
form of Exhibit A to the Sixth Amendment and Consent, in an
aggregate principal amount not to exceed $10,000,000.
3. Amendment to Subsection 10.2 (Limitation on Indebtedness). Subsection
10.2 of the Credit Agreement is hereby amended by deleting clause (g) in its
entirety and substituting in lieu thereof the following:
(g) Indebtedness of the Borrower which is subordinated and junior in
right of payment to the Obligations (as defined in the Borrower Security
Agreement) on terms and conditions satisfactory to the Agent and the
Required Lenders (including, without limitation, Indebtedness of the
Borrower under the Talk Note and Indebtedness of Audiovox Communications
Corp. under the Toshiba Note);
4. Amendment to Subsection 10.3 (Limitation on Liens). Subsection 10.3 of
the Credit Agreement is hereby amended by deleting the sentence at the end
thereof in its entirety and substituting in lieu thereof the following:
In no event shall the Borrower create, incur, assume or suffer to exist any
Lien upon the Capital Stock of CellStar or Audiovox Communications Corp.
now owned or hereafter acquired by the Borrower, other than Liens in favor
of the Collateral Agent for the benefit of the Lenders created pursuant to
clause (g) above.
5. Amendment to Subsection 10.6 (Limitation on Sale of Assets). Subsection
10.6 of the Credit Agreement is hereby amended by deleting clause (i) in its
entirety and substituting in lieu thereof the following:
(i) the sale or issuance of up to 30% of the Capital Stock of Audiovox
Communications Corp. to Toshiba Corporation; and
6. Consent. The Agent and the Lenders parties hereto hereby consent to the
release of the Capital Stock of Audiovox Communications Corp. from the Lien of
the Collateral Agent, for the benefit of the Lenders, on such Capital Stock
created pursuant to the Audiovox Pledge Agreement.
7. Representations and Warranties. On and as of the date hereof, the
Borrower hereby confirms, reaffirms and restates the representations and
warranties set forth in Section 7 of the Credit Agreement mutatis mutandis,
except to the extent that such representations and warranties expressly relate
to a specific earlier date in which case the Borrower hereby confirms, reaffirms
and restates such representations
Exhibit 99.10
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and warranties as of such earlier date.
8. Conditions to Effectiveness. This Amendment and Consent shall become
effective as of the date first written above upon receipt by the Agent of (i)
counterparts to this Amendment and Consent duly executed by the Borrower and the
Required Lenders, (ii) an amendment fee in the amount of $150,000 for the
account of Lenders which have executed and delivered to the Agent this Amendment
and Consent prior to Noon (New York City time) on May 28, 2002 (and will be paid
to such Lenders pro rata according to their respective Commitments), (iii) an
Acknowledgement and Consent in the form of Exhibit B hereto duly executed by
each of the Guarantors, (iv) a prepayment of the Loans in an aggregate principal
amount equal to the Net Cash Proceeds from the issuance of the Toshiba Note and
any sale or issuance of the Capital Stock of Audiovox Communications Corp. and
(v) all documentation relating to the issuance of the Toshiba Note and the sale
or issuance of Capital Stock of Audiovox Communications Corp. to Toshiba
Corporation, in each case satisfactory to the Agent, and evidence that such
transactions shall have been consummated for aggregate cash consideration not
less than $32,000,000; provided that Section 2(a) of this Amendment and Consent
shall become effective as of the date first written above upon satisfaction of
the foregoing clauses (i) and (iii).
9. Continuing Effect. Except as expressly provided herein, all of the terms
and provisions of the Credit Agreement are and shall remain in full force and
effect. The amendments and consent provided for herein is limited to the
specific subsections of the Credit Agreement specified herein and shall not
constitute a consent, waiver or amendment of, or an indication of the Agent's or
the Lenders' willingness to consent to any action requiring consent under or to
waive or amend, any other provisions of the Credit Agreement or the same
subsections for any other date or time period (whether or not such other
provisions or compliance with such subsections for another date or time period
are affected by the circumstances addressed in this Amendment and Consent).
10. Expenses. The Borrower agrees to pay and reimburse the Agent for all
its reasonable costs and out-of-pocket expenses incurred in connection with the
preparation and delivery of this Amendment and Consent, including, without
limitation, the reasonable fees and disbursements of counsel to the Agent.
11. Counterparts. This Amendment and Consent may be executed in any number
of counterparts by the parties hereto (including by facsimile transmission),
each of which counterparts when so executed shall be an original, but all the
counterparts shall together constitute one and the same instrument.
12. GOVERNING LAW. THIS AMENDMENT AND CONSENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Exhibit 99.10
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment and
Consent to be executed and delivered by their respective duly authorized
officers as of the date first above written.
AUDIOVOX CORPORATION
By: s/ Charles M. Stoehr
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Name: Charles M. Stoehr
Title: Senior Vice President/Chief Financial Officer
JPMORGAN CHASE BANK,
as Agent and as a Lender
By: s/ John Budzynski
-------------------------------------------------
Name: John Budzynski
Title: Vice President
Exhibit 99.10
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FLEET NATIONAL BANK, as a Lender
By: s/ Steven J. Melicharek
------------------------------------
Name: Steven J. Melicharek
Title: Senior Vice President
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By: s/ Renee M. Singer
----------------------------------------
Name: Renee M. Singer
Title: Vice President
CITIBANK, N.A., as a Lender
By: s/ Stephen Kelly
------------------------------------
Name: Stephen Kelly
Title: Vice President
MELLON BANK, N.A., as a Lender
By: s/ Donald G. Cassidy, Jr.
------------------------------------
Name: Donald G. Cassidy, Jr.
Title: Senior Vice President
DEUTSCHE FINANCIAL SERVICES
CORPORATION,
as a Lender
By: s/ David J Lynch
------------------------------------
Name: David J. Lynch
Title: Vice President - Operations
Exhibit 99.10
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ISRAEL DISCOUNT BANK OF NEW YORK,
as a Lender
By: s/ Alan B. Lefkowitz
----------------------------------------
Name: Alan B. Lefkowitz
Title: First Vice President
By: s/ Karen Chen
----------------------------------------
Name: Karen Chen
Title: Assistant Manager
PNC BANK, as a Lender
By: s/ Kysha A. White
----------------------------------------
Name: Kysha A. White
Title: Assistant Vice President
WASHINGTON MUTUAL BANK, FA,
as a Lender
By: s/ Brian Stone
----------------------------------------
Name: Brian Stone
Title: Senior Vice President
BANK LEUMI USA, as a Lender
By: s/ Paul Tine Glenn Kreutzer
----------------------------------------
Name: Paul Tine Glenn Kreutzer
Title: Vice President Banking Officer
FIRSTAR BANK, N.A., as a Lender
By: _____________________________________
Name:
Title:
Exhibit 99.10
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ACKNOWLEDGMENT AND CONSENT
Each of the undersigned corporations (i) as a guarantor under that certain
Amended and Restated Subsidiaries Guarantee, dated as of March 15, 1994 (as
amended, supplemented or otherwise modified from time to time, the "Guarantee"),
made by each of such corporations in favor of the Collateral Agent, (ii) as a
grantor under that certain Amended and Restated Security Agreement, dated as of
March 15, 1994 (as amended, supplemented or otherwise modified from time to
time, the "Security Agreement"), made by each of such corporations in favor of
the Collateral Agent, and (iii) in the case of Audiovox Holding Corp., as the
pledgor under that certain Pledge Agreement, dated as of February 9, 1996 (as
amended, supplemented or otherwise modified from time to time, the "Pledge
Agreement"), made by Audiovox Holding Corp. in favor of JPMorgan Chase Bank
(formerly known as The Chase Manhattan Bank), as pledge agent for the secured
parties thereunder, hereby consents to the execution and delivery of the Sixth
Amendment and Consent to which this Acknowledgment and Consent is attached and
hereby confirms and agrees that the Guarantee, the Security Agreement and the
Pledge Agreement are, and shall continue to be, in full force and effect and are
hereby ratified and confirmed in all respects and the Guarantee, the Security
Agreement, the Pledge Agreement and all of the Subsidiaries Collateral (as
defined in the Security Agreement) and Collateral (as defined in the Pledge
Agreement) do, and shall continue to, secure the payment of all of the
Obligations (as defined in the Guarantee and the Security Agreement, as the case
may be) pursuant to the terms of the Guarantee or the Security Agreement, as the
case may be, or, in the case of the Pledge Agreement, secure the payment of the
Secured Obligations (as defined in the Pledge Agreement) pursuant to the terms
of the Pledge Agreement. Capitalized terms not otherwise defined herein shall
have the meanings assigned to them in the Credit Agreement referred to in the
Sixth Amendment and Consent to which this Acknowledgment and Consent is
attached.
QUINTEX MOBILE COMMUNICATIONS
CORP.
By: s/ Charles M. Stoehr
-------------------------------
Name: Charles M. Stoehr
Title: Vice President
AMERICAN RADIO CORP.
By: s/ Charles M. Stoehr
-------------------------------
Name: Charles M. Stoehr
Title: Vice President
Exhibit 99.10
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AUDIOVOX INTERNATIONAL CORP.
By: s/ Charles M. Stoehr
-------------------------------
Name: Charles M. Stoehr
Title: Vice President
AUDIOVOX CANADA LIMITED
By: s/ Charles M. Stoehr
-------------------------------
Name: Charles M. Stoehr
Title: Vice President
AUDIOVOX HOLDING CORP.
By: s/ Chris Lazarides
--------------------------------
Name: Chris Lazarides
Title: President
AUDIOVOX ASIA INC.
By: s/ Charles M. Stoehr
-------------------------------
Name: Charles M. Stoehr
Title: President
AUDIOVOX LATIN AMERICA LTD.
By: s/ Charles M. Stoehr
-------------------------------
Name: Charles M. Stoehr
Title: President
AUDIOVOX COMMUNICATIONS CORP.
By: s/ Charles M. Stoehr
-------------------------------
Name: Charles M. Stoehr
Title: Secretary
Dated as of May 28, 2002
Exhibit 99.10
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