SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): NOVEMBER 30, 1998
RECOTON CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
NEW YORK 0-5860 11-1771737
(STATE OR OTHER JURISDIC- (COMMISSION (IRS EMPLOYER
TION OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
2950 LAKE EMMA ROAD, LAKE MARY, FLORIDA 32746
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 407-333-8900
N.A.
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
<PAGE>
ITEM 5. OTHER EVENTS
On November 30, 1998 Recoton Corporation's multibank credit facility
lenders agreed to extend until January 22, 1999 the $15 million portion which
was to be paid down on November 30th of the $101.5 million committed revolving
line of credit. Conditions of the extension include at stated times the
engagement of an underwriter to sell at least $100 million in high yield
subordinated debt, the engagement of a financial management consultant and the
receipt of a preliminary report of such consultant and the payment of an
extension fee of approximately $380,000. In addition, the interest rate on
Eurodollar borrowings was increased by 100 basis points and certain other rates
also increased. The Company also made a $500,000 payment to these banks as an
additional commitment fee as provided in the existing credit facility
documentation.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
a. FINANCIAL STATEMENTS OF BUSINESS ACQUIRED: not applicable
b. PRO FORMA FINANCIAL INFORMATION: not applicable
c. EXHIBITS:
1. Amendment, dated as of November 30, 1998, to Second Amended and
Restated Credit Agreement dated as of June 18, 1998 between
Recoton Corporation and The Chase Manhattan Bank, among others.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RECOTON CORPORATION
By: /S/ STUART MONT
Name: Stuart Mont
Title: Chief Operating
Officer and Executive Vice
President - Operations
Dated: December 4, 1998
<PAGE>
EXHIBIT INDEX
1. Amendment, dated as of November 30, 1998, to Second Amended and
Restated Credit Agreement dated as of June 18, 1998 between Recoton
Corporation and The Chase Manhattan Bank, among others.
<PAGE>
Exhibit 1 to Form 8-K dated
November 30, 1998
AMENDMENT
AMENDMENT, dated as of November 30, 1998 (this "AMENDMENT"), to the
Second Amended and Restated Credit Agreement, dated as of June 18, 1998 (as
heretofore amended, the "CREDIT AGREEMENT") among RECOTON CORPORATION, a New
York corporation (the "BORROWER"), the several banks and other financial
institutions from time to time parties thereto (the "LENDERS") and THE CHASE
MANHATTAN BANK, as Administrative Agent for the Lenders (in such capacity, the
"ADMINISTRATIVE AGENT").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to
make, and have made, certain loans and other extensions of credit to the
Borrower; and
WHEREAS, the Borrower has requested, and, upon this Amendment becoming
effective, the Lenders have agreed, that certain provisions of the Credit
Agreement be amended in the manner provided for in this Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in consideration of the
premises contained herein, the parties hereto hereby agree as follows:
SECTION I. AMENDMENTS
1.1 AMENDMENT TO SECTION 2.4. Subsection 2.4(b)(i) of the Credit
Agreement is hereby amended by deleting therefrom the reference to "November 30,
1998" and inserting in lieu thereof a reference to "January 22, 1999".
1.2 AMENDMENT TO SECTION 4.16. Subsection 4.16(a) of the Credit
Agreement is hereby amended by deleting therefrom the reference to "November 30,
1998" and inserting in lieu thereof a reference to "January 22, 1999".
1.3 SCHEDULE IV (APPLICABLE MARGIN, L/C FEE RATE AND COMMITMENT FEE
RATE). Schedule IV to the Credit Agreement is hereby amended by deleting such
Schedule IV in its entirety and inserting in lieu thereof a new Schedule IV in
the form of Annex A hereto.
SECTION II. MISCELLANEOUS
2.1 REPRESENTATIONS AND WARRANTIES. On and as of the date hereof and
after giving effect to this Amendment, the Borrower hereby confirms, reaffirms
and restates the representations and warranties set forth in Section 4 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 and warranties as of such earlier date, PROVIDED that the
references to the Credit Agreement in such representations and warranties shall
be deemed to refer to the Credit Agreement as amended prior to the date hereof
and pursuant to this Amendment.
2.2 EFFECTIVENESS. (a) This Amendment shall become effective as of the
date hereof upon:
(i) receipt by the Administrative Agent of counterparts of this
Amendment duly executed and delivered by the Borrower, each Guarantor, the
Administrative Agent, the Required Lenders and each Lender affected by the
amendment provided for in Section I above; and
(ii) receipt by the Administrative Agent, for the account of each
Lender, of an amendment fee equal to .375% of such Lender's Revolving
Credit Commitment.
(b) Anything in this Amendment to the contrary notwithstanding, the
provisions of Sections 1.1 and 1.2 of this Amendment shall terminate
automatically on:
(i) December 11, 1998, unless on or before such date the Borrower
shall have delivered to the Administrative Agent evidence, in form and
substance satisfactory to the Administrative Agent, that the Borrower shall
have entered into a customary engagement letter relating to the issuance by
the Borrower of at least $100,000,000 of high-yield subordinated debt
securities to be led by an underwriter which shall have been included among
the highest ten underwriters ranked according to aggregate dollar volume of
high-yield debt securities placed during the first nine months of 1998
(based on full credit to lead manager);
(ii) December 14, 1998, unless on or before such date the
Borrower shall have engaged a financial management consultant satisfactory
to the Lenders; or
(iii) January 15, 1999, unless on or before such date the
Borrower shall have caused the consultants referred to in clause (ii) above
to deliver to each of the Lenders a preliminary report regarding the
matters for which it has been engaged.
2.3 CONTINUING EFFECT; NO OTHER AMENDMENTS. Except as expressly set
forth in this Amendment, all of the terms and provisions of the Credit Agreement
are and shall remain in full force and effect and the Borrower shall continue to
be bound by all of such terms and provisions. The amendments provided for herein
are limited to the specific subsections of the Credit Agreement specified herein
and shall not constitute an amendment of, or an indication of the Administrative
Agent's or the Lenders' willingness to amend or waive, any other provisions of
the Credit Agreement or the same subsections for any other date or purpose.
2.4 SEVERABILITY. Any provision of this Amendment which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
2.5 INTEGRATION. This Amendment represents the agreement of the
Borrower and the Administrative Agent with respect to the subject matter hereof
and thereof, and there are no promises, undertakings, representations or
warranties by the Administrative Agent relative to the subject matter hereof and
thereof not expressly set forth or referred to herein.
2.6 EXPENSES. The Borrower agrees to pay and reimburse the
Administrative Agent for all its reasonable costs and expenses incurred in
connection with the preparation and delivery of this Amendment, including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent.
2.7 COUNTERPARTS. This Amendment may be executed by one or more of the
parties to this Amendment on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Amendment
signed by the parties hereto shall be delivered to the Borrower and the
Administrative Agent.
2.8 GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
RECOTON CORPORATION
By: \S\ STUART MONT
Name: Stuart Mont
Title: Executive Vice President
THE CHASE MANHATTAN BANK,
as Administrative Agent and as a Lender
By: \S\ CF MATTHIESSEN
Name: CF Matthiessen
Title: Vice President
SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION
By: \S\ WILLIAM C. BARR III
Name: William C. Barr III
Title: First Vice President
HARRIS TRUST AND SAVINGS BANK
By: \S\ RICHARD WOKOUN
Name: Richard Wokoun
Title: Vice President
MARINE MIDLAND BANK
By: \S\ PATRICK J. DOULIN
Name: Patrick J. Doulin
Title: Senior Vice President
FIRST UNION NATIONAL BANK
By: \S\ MARY H. DOONAN
Name: Mary H. Doonan
Title: Vice President
THE UNDERSIGNED GUARANTORS HEREBY CONSENT AND AGREE TO THE FOREGOING
AGREEMENT AS OF THE DATE HEREOF:
Christie Design Corporation, a Delaware corporation
InterAct Accessories, Inc., a Delaware corporation
Recoton Audio Corporation, a Delaware corporation
ReCone, Inc., a Delaware corporation
Recoton Home Audio, Inc., a California corporation
Recoton Japan, Inc., an Illinois corporation
Recoton International Holdings, Inc., a Delaware
corporation
Recoton European Holdings, Inc., a Delaware
corporation
AAMP of Florida, Inc., a Florida corporation
By: \S\ STUART MONT
Name: Stuart Mont
Title: Vice President
Recoton German Holdings GmbH, a German corporation
Mac Audio Electronic GmbH, a German corporation
Magnat Audio-Produkte GmbH, a German corporation
Heco Audio-Produkte GmbH, a German corporation
Arcona s.r.l., an Italian corporation
Recoton Italia s.r.l., an Italian corporation
By: \S\ JEREMY MERMAGEN
Name: Jeremy Mermagen
Title: Director
Recoton Canada Ltd., a Canadian corporation
By: \S\ STUART MONT
Name: Stuart Mont
Title: President
Recoton (Far East) Limited, a Hong Kong corporation
STD Holding Limited, a Hong Kong corporation
STD Electronic International Limited, a Hong Kong
corporation
STD Manufacturing Limited, a Hong Kong corporation
STD Plastic Industrial Limited, a Hong Kong
corporation
STD Trading Limited, a Hong Kong corporation
Peak Hero Limited, a Hong Kong corporation
Ever Smart Management Limited, a Hong Kong
corporation
By: \S\ ROBERT L. BORCHARDT
Name: Robert L. Borchardt
Title: Director
<PAGE>
ANNEX A
TO AMENDMENT TO CREDIT AGREEMENT
Schedule IV
APPLICABLE MARGIN, L/C FEE RATE
AND COMMITMENT FEE RATE
<TABLE>
<CAPTION>
Total Debt ABR Loans Eurodollar Loans Commitment L/C
Leverage Ratio Applicable Margin Applicable Margin Fee Rate Fee Rate
<S> <C> <C> <C> <C>
Greater than or equal 0.50% 3.75% 0.75% 1.25%
to 4.50 to 1.00
Less than 4.50 to 1.00 0.50% 3.50% 0.75% 1.25%
but greater than or
equal to 4.00 to 1.00
Less than 4.00 to 1.00 0.50% 3.25% 0.75% 1.25%
</TABLE>
