FOURTH AMENDMENT AND CONSENT, dated as of July 29, 1996
(this "Amendment and Consent"), to the Second Amended and
Restated Credit Agreement, dated as of May 5, 1995 (as amended
pursuant to the First Amendment thereto dated as of December 22,
1995, the Second Amendment thereto dated as of February 9, 1996,
the Third Amendment thereto dated as of May 13, 1996 and this
Amendment and Consent, and as the same may be further 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 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
and the Agent agree to amend the Credit Agreement in the manner
provided for herein;
WHEREAS, the Borrower has also requested that the Agent
and the Lenders consent to the transfer by the Borrower of the
assets used in its cellular communications business (the
"Cellular Assets") to Audiovox Communications Corp., a Delaware
corporation and a wholly-owned Subsidiary of the Borrower
("Communications"); and
WHEREAS, the Agent and the Lenders are willing to agree
to the requested amendments and consents, but only on, and
subject to, the terms and conditions hereof;
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. Consent. Notwithstanding the provisions of
subsections 9.5 and 9.6 of the Credit Agreement, the Agent and
the Lenders hereby consent to the transfer by the Borrower of the
Cellular Assets to Communications pursuant to agreements and
other documents in form and substance reasonably satisfactory to
the Agent.
3. Amendment of Subsection 1.1. Subsection 1.1 of
the Credit Agreement is hereby amended as follows:
(a) by deleting in its entirety the first sentence of
the definition of "Borrowing Base" and substituting in lieu
thereof the following new sentence:
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) 20% of the aggregate amount of Eligible
Inventory of the Borrower and its consolidated Domestic
and Canadian Subsidiaries on such date of determination
and (ii) $15,000,000.
(b) by adding a new definition in the proper
alphabetical order to read in its entirety as follows:
"Net Worth Adjustment Amount": at any time, an
amount equal to 50% of the aggregate gain (calculated
on a pre-tax basis) realized by the Borrower and its
Subsidiaries subsequent to July 29, 1996 in respect of
the sale of the Capital Stock of any Person (including,
but not limited to, CellStar, but excluding the
Borrower or any of its Subsidiaries).
(c) by deleting in its entirety the definition of
"Termination Date" contained therein and substituting in
lieu thereof the following new definition in the proper
alphabetical order:
"Termination Date": February 28, 1998.
4. Amendment of Subsection 9.1. Subsection 9.1 of
the Credit Agreement is hereby amended as follows:
(a) by deleting paragraph (a) thereof in its entirety
and substituting in lieu thereof the following new
paragraph:
(a) Maintenance of Pre-Tax Income. Permit (i)
Consolidated Pre-Tax Income for (A) the period of two
consecutive fiscal quarters ending May 31, 1996 or May
31, 1997 to be less than $1,500,000, (B) the period of
two consecutive fiscal quarters ending November 30,
1996 or November 30, 1997, to be less than $2,500,000
or (C) any fiscal year to be less than $4,000,000, (ii)
a Consolidated Pre-Tax Loss to occur in any two
consecutive fiscal quarters or (iii) a Consolidated
Pre-Tax Loss in excess of $500,000 to occur in any
fiscal quarter.
(b) by deleting paragraph (b) thereof in its entirety
and substituting in lieu thereof the following new
paragraph:
(b) Maintenance of Net Worth. Permit
Consolidated Adjusted Net Worth to be less than (i) at
any time prior to November 30, 1996, the sum of (A)
$86,000,000 and (B) the Net Worth Adjustment Amount at
such time, (ii) at any time on or after November 30,
1996 but prior to November 30, 1997, the sum of (A)
$88,500,000 and (B) the Net Worth Adjustment Amount at
such time or (iii) at any time thereafter, the sum of
(A) $91,000,000 and (B) the Net Worth Adjustment Amount
at such time.
5. Reduction in Commitments; Assignment and Transfer;
Amendment to Schedule I. (a) Effective upon receipt by the
Lenders of the amounts described in paragraph (b) below, (i) the
aggregate Commitments of the Lenders shall be reduced to
$75,000,000 and (ii) after giving effect to such reduction, each
Lender hereby irrevocably sells, assigns and transfers to each
other Lender such portion (if any) of such Lender's Commitment
and presently outstanding Loans and other amounts owing to such
Lender under the Credit Agreement and the Notes, together with
all instruments, documents and collateral security pertaining
thereto, such that after giving effect to such sale, assignment
and transfer, the Commitments and the Commitment Percentages of
the Lenders shall be as set forth on Schedule A hereto. In
connection with the foregoing assignments and transfers and
subject to the terms and conditions hereof, the Borrower, the
Lenders and the Agent hereby agree that Schedule I to the Credit
Agreement is hereby amended by deleting such Schedule in its
entirety and substituting in lieu thereof a new Schedule to read
in its entirety as set forth in Schedule A hereto.
(b) Each Lender agrees to advance to the Agent on the
Effective Date the amount set forth opposite its name under the
heading "Advanced Amount"
on Schedule B hereto and, to the extent the same is received, the
Agent shall forward to each Lender the amount set forth opposite
its name under the heading "Repaid Amount" on Schedule B hereto.
(c) All principal payments that would otherwise be
payable from and after the Effective Date to or for the account
of the Lenders pursuant to the Credit Agreement and the Notes
shall, instead, be payable to or for the account of the Lenders
in accordance with their respective interests as reflected in
Schedule A hereto.
(d) All interest, fees and other amounts that would
otherwise accrue for the account of the Lenders from and after
the Effective Date shall, instead, accrue for the account of, and
be payable to, the Lenders in accordance with their respective
interests as reflected in Schedule A hereto.
(e) Each Lender agrees that, at any time and from time
to time upon the written request of any other Lender, it will
execute and deliver such further documents and do such further
acts and things as such other party may reasonably request in
order to effect the sale, assignment and transfer set forth in
this Section 5.
6. 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 6 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.
7. Effectiveness. (a) This Amendment and Consent
(other than Section 2) shall become effective as of the date (the
"Effective Date") first written above upon satisfaction of the
following conditions precedent:
(i) receipt by the Agent of counterparts of this
Amendment and Consent duly executed by the Borrower, the
Lenders and the Agent;
(ii) receipt by the Agent, with a copy for each
Lender, of a satisfactory legal opinion of counsel to the
Borrower and the Subsidiaries covering the applicable
matters set forth in Exhibit A to this Amendment and
Consent;
(iii) receipt by the Agent, for the account of each
Lender whose Commitments have changed as a result of this
Amendment and Consent, of duly executed Note(s) reflecting
such changed Commitments substantially in the form of
Exhibit A to the Credit Agreement; and
(iv) receipt by the Agent of the fees required to be
paid in connection with this Amendment and Consent pursuant
to the Fee Letter, dated July 29, 1996, from the Agent to
the Borrower.
(b) Section 2 of this Amendment and Consent shall
become effective upon receipt by the Agent of (i) counterparts of
this Amendment and Consent duly executed by the Borrower, the
Required Lenders and the Agent, (ii) a Guarantee Assumption
Agreement, substantially in the form of Exhibit B to this
Amendment and Consent, executed and delivered by a duly
authorized officer of Communications and pursuant to which
Communications shall guarantee the payment and performance of the
Obligations (as defined in the Subsidiaries Guarantee), (iii) a
Subsidiaries Security Agreement Supplement, substantially in the
form of Exhibit C to this Amendment and Consent, executed and
delivered by a duly authorized officer of Communications and
pursuant to which Communications shall grant a security interest
in certain of its assets as collateral security for the
Obligations (as defined in the Subsidiaries Guarantee), (iv) a
Stock Pledge Agreement, substantially in the form of Exhibit D to
this Amendment and Consent, executed and delivered by a duly
authorized officer of the Borrower pursuant to which the Borrower
shall pledge all of the Capital Stock of Communications as
collateral security for the Obligations (as defined in the
Borrower Security Agreement), (v) an acknowledgement from
Communications executed and delivered by a duly authorized
officer of Communications acknowledging the pledge described in
the immediately preceding clause (iv) and in form and substance
reasonably satisfactory to the Agent, (vi) stock certificates and
undated stock powers with respect to the stock certificates
representing all of the outstanding Capital Stock of
Communications, (vii) a satisfactory legal opinion of counsel to
the Borrower and the subsidiaries covering the applicable matters
set forth in Exhibit A to this Amendment and Consent, (viii) such
resolutions, incumbency certificates and legal opinions as are
reasonably requested by the Agent with respect to the transfer of
the Cellular Assets by the Borrower to Communications and the
delivery of the documents described in this paragraph and the
transactions contemplated thereby and (ix) evidence in form and
substance reasonably satisfactory to it that all filings,
recordings, registrations and other actions, including, without
limitation, the filing of duly executed financing statements on
Form UCC-1, necessary or, in the reasonable opinion of the Agent,
desirable to perfect the Liens created by the Security Documents
shall have been completed (or, to the extent that any such
filings, recordings, registrations and other actions shall not
have been completed, arrangements reasonably satisfactory to the
Agent for the completion thereof shall have been made).
8. Continuing Effect; No Other Amendments. 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 the consent provided for herein are 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).
9. 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.
10. 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.
11. 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.
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/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Sr. Vice Pres. & CFO
THE CHASE MANHATTAN BANK,
as Agent and as a Lender
By:s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
FLEET BANK, N.A., as a Lender
By:s/▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON,
as a Lender
By:s/▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Director
EUROPEAN AMERICAN BANK,
as a Lender
By:s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ACKNOWLEDGEMENT 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 (the "Guarantee"), made by each of
such corporations in favor of the Collateral Agent and (ii) as a
grantor under that certain Amended and Restated Security
Agreement, dated as of March 15, 1994 (the "Security Agreement"),
made by each of such corporations in favor of the Collateral
Agent, confirms and agrees that the Guarantee and the Security
Agreement are, and shall continue to be, in full force and effect
and are hereby ratified and confirmed in all respects and the
Guarantee and the Security Agreement and all of the Subsidiaries
Collateral (as defined in the Security Agreement) do, and shall
continue to, secure the payment of all of the Obligations (as
defined in the Guarantee) and the Secured Obligations (as defined
in the Security Agreement), as the case may be, pursuant to the
terms of the Guarantee or the Security Agreement, as the case may
be. Capitalized terms not otherwise defined herein shall have
the meanings assigned to them in the Credit Agreement referred to
in the Amendment and Consent to which this Acknowledgement and
Consent is attached.
QUINTEX COMMUNICATIONS CORP.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
QUINTEX MOBILE COMMUNICATIONS CORP.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
HERMES TELECOMMUNICATIONS INC.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary/Treasurer
LENEX CORPORATION
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary/Treasurer
AMERICAN RADIO CORP.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
AUDIOVOX INTERNATIONAL CORP.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Sr. Vice President
AUDIOVOX HOLDING CORP.
By:s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
AUDIOVOX CANADA LIMITED
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
AUDIOVOX ASIA INC.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
AUDIOVOX LATIN AMERICA LTD.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Dated as of July 29, 1996SCHEDULE A
TO FOURTH AMENDMENT AND CONSENT
SCHEDULE I
COMMITMENTS
Commitment
Lender Commitment Percentage
The Chase Manhattan Bank $30,000,000 40.00%
Fleet Bank, N.A. $20,000,000 26.67%
European American Bank $10,000,000 13.33%
The First National Bank of Boston $15,000,000 20.00%
Total $75,000,000 100.00%
SCHEDULE B
TO FOURTH AMENDMENT AND CONSENT
Repaid Advanced
Lender Amount Amount
The Chase Manhattan Bank $3,159,000
Fleet Bank, N.A. $2,106,264
European American Bank $1,052,736
The First National Bank of Boston $1,579,500
Total $7,897,500
EXHIBIT A
TO FOURTH AMENDMENT AND CONSENT
[FORM OF OPINION OF COUNSEL TO
THE BORROWER AND ITS SUBSIDIARIES]
1. The Borrower and each Domestic Subsidiary (a) is
duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and (b) has the
corporate power and authority to own and operate its property, to
lease the property it operates as lessee and to conduct the
business in which it is currently engaged.
2. The Borrower has the corporate power and authority
to execute and deliver the Fourth Amendment, the Notes and the
Stock Pledge Agreement and perform its obligations under the
Fourth Amendment, the Credit Agreement, the Notes, and the Stock
Pledge Agreement and to borrow under the Credit Agreement and has
taken all necessary corporate action to authorize the borrowings
on the terms and conditions of the Credit Agreement and the Notes
and to authorize the execution, delivery and performance of the
Fourth Amendment, the Credit Agreement, the Notes and the Stock
Pledge Agreement.
3. The Fourth Amendment, the Credit Agreement, the
Notes and the Stock Pledge Agreement (i) have been duly executed
and delivered on behalf of the Borrower, and (ii) constitute
legal, valid and binding obligations of Borrower enforceable
against the Borrower in accordance with their respective terms
except as affected by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting creditors' rights
generally and by general principles of equity.
4. Each Domestic Subsidiary has the corporate power
and authority to execute, deliver and perform and has taken all
necessary corporate action to authorize the execution, delivery
and performance of the Acknowledgement and Consent attached to
the Fourth Amendment. Communications has the corporate power and
authority to execute, deliver and perform and has taken all
necessary corporate action to authorize the execution, delivery
and performance of the Guarantee Assumption Agreement, the
Subsidiaries Guarantee, the Subsidiaries Securities Agreement
Supplement and the Subsidiaries Security Agreement. The
Guarantee Assumption Agreement, the Subsidiaries Guarantee, the
Subsidiaries Security Agreement Supplement and the Subsidiaries
Security Agreement (i) have been duly executed and delivered on
behalf of Communications and (ii) constitute the legal, valid and
binding obligations of Communications enforceable against
Communications in accordance with their respective terms except
as affected by bankruptcy, insolvency, moratorium, reorganization
or other similar laws affecting creditors' rights generally and
by general principles of equity.
5. No consent or authorization of, or other act by or
in respect of any Federal, or New York or Delaware state,
governmental authority or any other Person is or will be required
in connection with the borrowings under the Credit Agreement or
with the execution, delivery, performance, validity or
enforceability of the Fourth Amendment, the Credit Agreement, the
Notes, the Stock Pledge Agreement, the Guarantee Assumption
Agreement or the Subsidiaries Security Agreement Supplement
except for filings necessary to perfect security interests
created by the Security Documents and consents and filings which
have been obtained or made, as the case may be, and which are in
full force and effect.
6. The execution, delivery and performance of the
Fourth Amendment, the Credit Agreement, the Notes, the Stock
Pledge Agreement, the Guarantee Assumption Agreement and the
Subsidiaries Security Agreement Supplement, the borrowings under
the Credit Agreement and the use of the proceeds thereof (a) do
not violate applicable Federal laws, New York laws or Delaware
corporate statutory laws or regulations or breach or result in a
default under or conflict with any existing Contractual
Obligation of the Borrower or any Domestic Subsidiary and (b) do
not result in, or require, the creation or imposition of any Lien
on any of its or their respective properties or revenues pursuant
to any such laws or any such obligations.
7. The Borrower is not an "investment company", or a
company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
EXHIBIT B
TO FOURTH AMENDMENT AND CONSENT
[FORM OF
GUARANTEE ASSUMPTION AGREEMENT]
GUARANTEE ASSUMPTION AGREEMENT, dated as of July __,
1996, made by AUDIOVOX COMMUNICATIONS CORP., a Delaware
corporation (the "Additional Guarantor"), in favor of THE CHASE
MANHATTAN BANK, a New York banking corporation, as collateral
agent (in such capacity, the "Collateral Agent") for the several
banks and other financial institutions (collectively, the
"Lenders"; individually, a "Lender") from time to time parties to
the Second Amended and Restated Credit Agreement, dated as of May
5, 1995 (as amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among Audiovox Corporation, a
Delaware corporation (the "Borrower"), the Lenders and 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, in connection with the Credit Agreement,
certain Subsidiaries of the Borrower entered into a Second
Amended and Restated Subsidiaries Guarantee, dated as of March
15, 1994 (the "Subsidiaries Guarantee");
WHEREAS, the Borrower and the Additional Guarantor have
requested that the Lenders and the Agent agree to consent to the
transfer by the Borrower of the assets used in its cellular
communications business (the "Cellular Assets") to the Additional
Guarantor pursuant to the Fourth Amendment and Consent, dated as
of July 29, 1996 (the "Fourth Amendment and Consent"), to the
Credit Agreement; and
WHEREAS, it is a condition precedent to the
effectiveness of the consent to the transfer of the Cellular
Assets to the Additional Guarantor that the Additional Guarantor
shall have executed and delivered this Guarantee Assumption
Agreement;
NOW, THEREFORE, the Additional Guarantor hereby agrees
to become a "Guarantor" for all purposes of the Subsidiaries
Guarantee and, as such, shall be subject to and bound by the
terms and conditions thereof. Without limiting the generality of
the foregoing, the Additional Guarantor hereby jointly and
severally with the other Guarantors, guarantees to each Lender
and the Agent and their respective successors, indorsees,
transferees and assigns the prompt and complete payment and
performance by the Borrower when due (whether at stated maturity,
by acceleration or otherwise) of the Obligations in the same
manner and to the same extent as is provided in Section 2 of the
Subsidiaries Guarantee. The undersigned further agrees to be
bound by all of the provisions of the Subsidiaries Guarantee
applicable to a Guarantor thereunder and agrees that it shall
become a Guarantor for all purposes of the Subsidiaries Guarantee
to the same extent as if originally a party thereto with the
representations and warranties contained therein being deemed to
be made by the undersigned as of the date hereof. Terms defined
in the Subsidiaries Guarantee shall have their defined meanings
when used herein.
IN WITNESS WHEREOF, the Additional Guarantor has caused
this Guarantee Assumption Agreement to be duly executed and
delivered as of the day and year first above written.
AUDIOVOX COMMUNICATIONS CORP.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attention:
Telecopier:
Accepted and agreed:
THE CHASE MANHATTAN BANK,
as Agent
By:s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
QUINTEX COMMUNICATIONS CORP.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
QUINTEX MOBILE COMMUNICATIONS CORP.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
HERMES TELECOMMUNICATIONS INC.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary/Treasurer
LENEX CORPORATION
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary/Treasurer
AMERICAN RADIO CORP.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
AUDIOVOX INTERNATIONAL CORP.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
AUDIOVOX HOLDING CORP.
By:s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
AUDIOVOX CANADA LIMITED
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
AUDIOVOX ASIA INC.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
AUDIOVOX LATIN AMERICA LTD.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
EXHIBIT C
TO FOURTH AMENDMENT AND CONSENT
[FORM OF
SUBSIDIARIES SECURITY AGREEMENT SUPPLEMENT]
SUBSIDIARIES SECURITY AGREEMENT SUPPLEMENT, dated as of
July __, 1996, made by AUDIOVOX COMMUNICATIONS CORP., a Delaware
corporation (the "Additional Subsidiary"), in favor of THE CHASE
MANHATTAN BANK, a New York banking corporation, as collateral
agent (in such capacity, the "Collateral Agent") for the several
banks and other financial institutions (collectively, the
"Lenders"; individually, a "Lender") from time to time parties to
the Second Amended and Restated Credit Agreement, dated as of May
5, 1995 (as the same may be amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among
Audiovox Corporation, a Delaware corporation (the "Borrower"),
the Lenders, and The Chase Manhattan Bank, as administrative and
collateral agent for the Lenders (in such capacity, the "Agent").
W I T N E S S E T H :
WHEREAS, in connection with the Credit Agreement,
certain Subsidiaries of the Borrower are parties to that certain
Amended and Restated Subsidiaries Security Agreement, dated as of
March 15, 1994 (the "Subsidiaries Security Agreement"), made by
such Subsidiaries in favor of the Collateral Agent, pursuant to
which the Subsidiaries granted a security interest in certain of
their respective assets as collateral security for, among other
things, their respective obligations to the Lenders under the
Guarantee (as defined in the Subsidiaries Security Agreement);
WHEREAS, the Borrower and the Additional Subsidiary
have requested that the Lenders and the Agent agree to consent to
the transfer by the Borrower of the assets used in its cellular
communications business (the "Cellular Assets") to the Additional
Subsidiary pursuant to the Fourth Amendment and Consent, dated as
of July 29, 1996 (the "Fourth Amendment and Consent"), to the
Credit Agreement;
WHEREAS, it is a condition precedent to the
effectiveness of the consent to the transfer of the Cellular
Assets to the Additional Subsidiary that the Additional
Subsidiary become a "Guarantor" under the Guarantee (as defined
in the Subsidiaries Security Agreement) and, in satisfaction of
such condition, the Additional Subsidiary is executing and
delivering a Guarantee Assumption Agreement, dated as of July __,
1996, in respect of such Guarantee; and
WHEREAS, it is also a condition precedent to the
effectiveness of the consent to the transfer of the Cellular
Assets to the Additional Subsidiary that the Additional
Subsidiary shall have executed and delivered this Subsidiaries
Security Agreement Supplement pursuant to which the Additional
Subsidiary shall grant a security interest in certain of its
assets as collateral security for its obligations under the
Guarantee (as defined in the Subsidiaries Security Agreement);
NOW, THEREFORE, in consideration of the premises
contained herein and to induce the Lenders to enter into the
Fourth Amendment and Consent and to make their loans and other
extensions of credit under the Credit Agreement, the Additional
Subsidiary hereby agrees with the Collateral Agent, for the
benefit of the Lenders, as follows:
1. The Additional Subsidiary agrees to become a
"Subsidiary" for all purposes of the Subsidiaries Security
Agreement and, as such, shall be subject to and bound by the
terms and conditions thereof. Without limiting the generality of
the foregoing, the Additional Subsidiary hereby grants to the
Collateral Agent, for the benefit of the Lenders, a security
interest in all of the property now owned or at any time
hereafter acquired by it or in which it now has or at any time in
the future may acquire any right, title or interest, in the same
manner and to the same extent as is provided in Section 2 of the
Subsidiaries Security Agreement.
2. Schedules 1, 2 and 3 to the Subsidiaries Security
Agreement are hereby amended by adding at the end of each
thereof, the information contained in Schedules 1, 2 and 3 to
this Subsidiaries Security Agreement Supplement, respectively.
3. The undersigned further agrees to be bound by all
of the provisions of the Subsidiaries Security Agreement
applicable to a Subsidiary thereunder and agrees that it shall
become a Subsidiary, for all purposes of the Subsidiaries
Security Agreement to the same extent as if originally a party
thereto with the representations and warranties contained therein
being deemed to be made by the undersigned as of the date hereof.
Without limiting the foregoing, the Additional Subsidiary hereby
represents and warrants that (a) the security interests granted
by the Additional Subsidiary pursuant to this Subsidiaries
Security Agreement Supplement and the Subsidiaries Security
Agreement, upon completion of the filings and other actions
specified on Schedule 1 attached hereto, will constitute
perfected security interests on the Subsidiaries Collateral of
the Additional Subsidiary in favor of the Collateral Agent, for
the ratable benefit of the Lenders, which are prior to all other
Liens on such Subsidiaries Collateral in existence on the date
hereof except for Liens permitted to exist pursuant to the Credit
Agreement and are enforceable as such against all creditors of
and purchasers from the Additional Subsidiary (except purchasers
of Inventory in the ordinary course of business), except in each
case as enforceability is affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good
faith and fair dealing, (b) such Additional Subsidiary's chief
executive office and chief place of business is located at the
address listed in Schedule 2 hereto and (c) all of its Inventory
is located at the locations listed in Schedule 3 hereto. Terms
defined in the Subsidiaries Security Agreement shall have their
defined meanings when used herein.
IN WITNESS WHEREOF, the Additional Subsidiary has
caused this Subsidiaries Security Agreement Supplement to be duly
executed and delivered as of the date first above written.
AUDIOVOX COMMUNICATIONS CORP.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary
Accepted and agreed:
THE CHASE MANHATTAN BANK,
as Agent
By:s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
QUINTEX COMMUNICATIONS CORP.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
QUINTEX MOBILE COMMUNICATIONS CORP.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
HERMES TELECOMMUNICATIONS INC.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary/Treasurer
LENEX CORPORATION
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary/Treasurer
AMERICAN RADIO CORP.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
AUDIOVOX INTERNATIONAL CORP.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Sr. Vice President
AUDIOVOX HOLDING CORP.
By:s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
AUDIOVOX CANADA LIMITED
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
AUDIOVOX ASIA INC.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
AUDIOVOX LATIN AMERICA LTD.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Schedule 1 to
Subsidiaries Security Agreement Supplement
UCC FILING JURISDICTIONS
Audiovox Communications Corp.
Schedule 2 to
Subsidiaries Security Agreement Supplement
CHIEF EXECUTIVE OFFICES OF
THE SUBSIDIARIES
NAME OF CHIEF EXECUTIVE CHIEF PLACE
SUBSIDIARY OFFICE OF BUSINESS
Audiovox
Communications
Corp.
Schedule 3 to
Subsidiaries Security Agreement Supplement
LOCATIONS OF INVENTORY
NAME OF SUBSIDIARY LOCATION
Audiovox Communications Corp.
EXHIBIT D
TO FOURTH AMENDMENT AND CONSENT
[FORM OF
STOCK PLEDGE AGREEMENT]
STOCK PLEDGE AGREEMENT, dated as of July __, 1996, made
by AUDIOVOX CORPORATION, a Delaware corporation (the "Borrower"),
in favor of THE CHASE MANHATTAN BANK, a New York banking
corporation, as collateral agent (in such capacity, the
"Collateral Agent") for the several banks and other financial
institutions (collectively, the "Lenders"; individually, a
"Lender") from time to time parties to the Second Amended and
Restated Credit Agreement, dated as of May 5, 1995 (as amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Borrower, the several banks and other
financial institutions from time to time parties thereto
(collectively, the "Lenders"; individually, a "Lender") and 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 owns all of the issued and
outstanding shares of Pledged Stock (as hereinafter defined)
issued by the Issuer (as hereinafter defined);
WHEREAS, the Borrower and the Issuer have requested
that the Lenders and the Agent agree to consent to the transfer
by the Borrower of the assets used in its cellular communications
business (the "Cellular Assets") to the Issuer pursuant to the
Fourth Amendment and Consent, dated as of July 29, 1996 (the
"Fourth Amendment and Consent"), to the Credit Agreement;
WHEREAS, it is a condition precedent to the
effectiveness of the Fourth Amendment and Consent that the
Borrower shall have executed and delivered this Stock Pledge
Agreement;
NOW, THEREFORE, in consideration of the premises and to
induce the Agent and the Lenders to enter into the Fourth
Amendment and Consent and to induce the Lenders to make their
respective extensions of credit to the Borrower under the Credit
Agreement, the Borrower hereby agrees with the Collateral Agent,
for the benefit of the Lenders, as follows:
1. Defined Terms. (a) Unless otherwise defined
herein, terms defined in the Credit Agreement (and in the
recitals hereto) and used herein shall have the meanings given to
them in the Credit Agreement.
(b) The following terms shall have the following
meanings:
"Agreement": this Stock Pledge Agreement, as the same
may be amended, modified or otherwise supplemented from time
to time.
"Code": the Uniform Commercial Code from time to time
in effect in the State of New York.
"Collateral": the Pledged Stock and all Proceeds
thereof.
"Collateral Account": any account established to hold
money Proceeds, maintained under the sole dominion and
control of the Collateral Agent, subject to withdrawal by
the Collateral Agent for the account of the Lenders only as
provided in Section 9(a).
"Issuer": Audiovox Communications Corp., a Delaware
corporation.
"Obligations": the collective reference to the unpaid
principal of and interest on the Loans and the Notes and all
other obligations and liabilities of the Borrower to the
Agent, the Collateral Agent and the Lenders (including,
without limitation, interest accruing at the then applicable
rate provided in the Credit Agreement after the maturity of
the Loans and interest accruing at the then applicable rate
provided in the Credit Agreement after the filing of any
petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding),
whether direct or indirect, absolute or contingent, due or
to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, the Credit
Agreement, the Notes, any Letter of Credit, any Acceptance,
this Agreement, the other Loan Documents, any Foreign
Exchange Contract or interest rate agreement entered into
with any Lender, or any other document made, delivered or
given in connection therewith, in each case whether on
account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to
the Agent, the Collateral Agent or to the Lenders that are
required to be paid by the Borrower pursuant to the terms of
the Credit Agreement or this Agreement or any other Loan
Document).
"Pledged Stock": the shares of Capital Stock listed on
Schedule 1 hereto, together with all stock certificates,
options or rights of any nature whatsoever that may be
issued or granted by the Issuer to the Borrower in respect
of the Pledged Stock while this Agreement is in effect.
"Proceeds": all "proceeds" as such term is defined in
Section 9-306(1) of the Code in effect on the date hereof of
the Pledged Stock and, in any event, shall include, without
limitation, all dividends or other income from the Pledged
Stock, collections thereon or distributions with respect
thereto.
"Securities Act": the Securities Act of 1933, as
amended.
(c) The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision
of this Agreement, and section and paragraph references are to
this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of
such terms.
2. Pledge; Grant of Security Interest. The Borrower
hereby delivers to the Collateral Agent, for the benefit of the
Lenders, all the Pledged Stock and hereby grants to the
Collateral Agent, for the benefit of the Lenders, a first
security interest in the Collateral, as collateral security for
the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the
Obligations.
3. Stock Powers. Concurrently with the delivery to
the Collateral Agent of each certificate representing one or more
shares of Pledged Stock, the Borrower shall deliver an undated
stock power covering such certificate, duly executed in blank by
the Borrower with, if the Collateral Agent so requests, signature
guaranteed.
4. Representations and Warranties. The Borrower
represents and warrants that:
(a) The Borrower has the corporate power and authority
and the legal right to execute and deliver, to perform its
obligations under, and to grant the security interest in the
Collateral pursuant to, this Agreement and has taken all
necessary corporate action to authorize its execution,
delivery and performance of, and grant of the security
interest in the Collateral pursuant to, this Agreement.
(b) This Agreement constitutes a legal, valid and
binding obligation of the Borrower, enforceable in
accordance with its terms, and upon delivery to the
Collateral Agent of the stock certificates evidencing the
Pledged Stock, the security interest created pursuant to
this Agreement will constitute a valid, perfected first
priority security interest in the Collateral, enforceable in
accordance with its terms against all creditors of the
Borrower and any Persons purporting to purchase any
Collateral from the Borrower, except in each case as
enforceability may be affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered
in a proceeding in equity or at law) and an implied covenant
of good faith and fair dealing.
(c) The execution, delivery and performance of this
Agreement will not violate any provision of any Requirement
of Law or Contractual Obligation of the Borrower and will
not result in the creation or imposition of any Lien on any
of the properties or revenues of the Borrower pursuant to
any Requirement of Law or Contractual Obligation of the
Borrower, except the security interest created by this
Agreement.
(d) Except for such consents as have been obtained and
are in full force and effect, no consent or authorization
of, filing with, or other act by or in respect of, any
arbitrator or Governmental Authority and no consent of any
other Person (including, without limitation, any stockholder
or creditor of the Borrower), is required in connection with
the execution, delivery, performance, validity or
enforceability of this Agreement.
(e) No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending
or, to the knowledge of the Borrower, threatened by or
against the Borrower or against any of its properties or
revenues with respect to this Agreement or any of the
transactions contemplated hereby.
(f) All the shares of the Pledged Stock have been duly
and validly issued and are fully paid and nonassessable.
(g) The Borrower is the record and beneficial owner
of, and has good and marketable title to, the Pledged Stock,
free of any and all Liens or options in favor of, or claims
of, any other Person, except the security interests created
by this Agreement.
5. Covenants. The Borrower covenants and agrees with
the Collateral Agent and the Lenders that, from and after the
date of this Agreement until this Agreement is terminated and the
security interests created hereby are released:
(a) If the Borrower shall, as a result of its
ownership of the Pledged Stock, become entitled to receive
or shall receive any stock certificate (including, without
limitation, any certificate representing a stock dividend or
a distribution in connection with any reclassification,
increase or reduction of capital or any certificate issued
in connection with any reorganization), option or rights,
whether in addition to, in substitution of, as a conversion
of, or in exchange for any shares of the Pledged Stock, or
otherwise in respect thereof, the Borrower shall accept the
same as the agent of the Collateral Agent and the Lenders,
hold the same in trust for the Collateral Agent and the
Lenders and deliver the same forthwith to the Collateral
Agent in the exact form received, duly indorsed by the
Borrower to the Collateral Agent, if required, together with
an undated stock power covering such certificate duly
executed in blank by the Borrower and with, if the
Collateral Agent so requests, signature guaranteed, to be
held by the Collateral Agent, subject to the terms hereof,
as additional collateral security for the Obligations. Any
sums paid upon or in respect of the Pledged Stock upon the
liquidation or dissolution of the Issuer shall be paid over
to the Collateral Agent to be held by it hereunder as
additional collateral security for the Obligations, and in
case any distribution of capital shall be made on or in
respect of the Pledged Stock or any property shall be
distributed upon or with respect to the Pledged Stock
pursuant to the recapitalization or reclassification of the
capital of the Issuer or pursuant to the reorganization
thereof, the property so distributed shall be delivered to
the Collateral Agent to be held by it hereunder as
additional collateral security for the Obligations. If any
sums of money or property so paid or distributed in respect
of the Pledged Stock shall be received by the Borrower, the
Borrower shall, until such money or property is paid or
delivered to the Collateral Agent, hold such money or
property in trust for the Lenders, segregated from other
funds of the Borrower, as additional collateral security for
the Obligations.
(b) Without the prior written consent of the
Collateral Agent, the Borrower will not (i) sell, assign,
transfer, exchange, or otherwise dispose of, or grant any
option with respect to, the Collateral, (ii) create, incur
or permit to exist any Lien or option in favor of, or any
claim of any Person with respect to, any of the Collateral,
or any interest therein, except for the security interests
created by this Agreement or (iii) enter into any agreement
or undertaking restricting the right or ability of the
Borrower or the Collateral Agent to sell, assign or transfer
any of the Collateral.
(c) The Borrower shall maintain the security interest
created by this Agreement as a first, perfected security
interest and shall defend such security interest against
claims and demands of all Persons whomsoever. At any time
and from time to time, upon the written request of the
Collateral Agent, and at the sole expense of the Borrower,
the Borrower will promptly and duly execute and deliver such
further instruments and documents and take such further
actions as the Collateral Agent may reasonably request for
the purposes of obtaining or preserving the full benefits of
this Agreement and of the rights and powers herein granted.
If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any promissory
note, other instrument or chattel paper, such note,
instrument or chattel paper shall be immediately delivered
to the Collateral Agent, duly endorsed in a manner
satisfactory to the Collateral Agent, to be held as
Collateral pursuant to this Agreement.
(d) The Borrower shall pay, and save the Collateral
Agent and the Lenders harmless from, any and all liabilities
with respect to, or resulting from any delay in paying, any
and all stamp, excise, sales or other taxes which may be
payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions
contemplated by this Agreement.
6. Cash Dividends; Voting Rights. Unless an Event of
Default shall have occurred and be continuing and the Collateral
Agent shall have given notice to the Borrower of the Collateral
Agent's intent to exercise its corresponding rights pursuant to
Section 7 or 8 below, the Borrower shall be permitted to receive
all cash dividends paid in the normal course of business of the
Issuer and consistent with past practice in respect of the
Pledged Stock and to exercise all voting and corporate rights
with respect to the Pledged Stock; provided, however, that no
vote shall be cast or corporate right exercised or other action
taken which, in the Collateral Agent's reasonable judgment, would
impair the Collateral or which would be inconsistent with or
result in any violation of any provision of the Credit Agreement,
any Notes, this Agreement or any other Loan Document.
7. Rights of the Lenders and the Collateral Agent.
(a) All money Proceeds received by the Collateral Agent
hereunder shall be held by the Collateral Agent for the benefit
of the Lenders in a Collateral Account. All Proceeds while held
by the Collateral Agent in a Collateral Account (or by the
Borrower in trust for the Collateral Agent and the Lenders) shall
continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until
applied by the Collateral Agent to the payment thereof pursuant
to Section 8(a).
(b) If an Event of Default shall occur and be
continuing and the Collateral Agent shall give notice of its
intent to exercise such rights to the Borrower, (i) the
Collateral Agent shall have the right to receive any and all cash
dividends paid in respect of the Pledged Stock and make
application thereof to the Obligations in accordance with Section
8(a) and (ii) all shares of the Pledged Stock shall be registered
in the name of the Collateral Agent or its nominee, and the
Collateral Agent or its nominee may thereafter exercise, (A) all
voting, corporate and other rights pertaining to such shares of
the Pledged Stock at any meeting of shareholders of the Issuer or
otherwise and (B) any and all rights of conversion, exchange,
subscription and any other rights, privileges or options
pertaining to such shares of the Pledged Stock as if it were the
absolute owner thereof (including, without limitation, the right
to exchange at its discretion any and all of the Pledged Stock
upon the merger, consolidation, reorganization, recapitalization
or other fundamental change in the corporate structure of the
Issuer, or upon the exercise by the Borrower or the Collateral
Agent of any right, privilege or option pertaining to such shares
of the Pledged Stock, and in connection therewith, the right to
deposit and deliver any and all of the Pledged Stock with any
committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as the
Collateral Agent may determine), all without liability except to
account for property actually received by it, but the Collateral
Agent shall have no duty to the Borrower to exercise any such
right, privilege or option and shall not be responsible for any
failure to do so or delay in so doing.
8. Remedies. (a) If an Event of Default shall have
occurred and be continuing, at any time at the Collateral Agent's
election, the Collateral Agent may apply all or any part of
Proceeds held in any Collateral Account in payment of the
Obligations in such order as the Collateral Agent shall
determine.
(b) If an Event of Default shall occur and be
continuing, the Collateral Agent, on behalf of the Lenders, may
exercise, in addition to all other rights and remedies granted in
this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and
remedies of a secured party under the Code. Without limiting the
generality of the foregoing, the Collateral Agent, without demand
of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required
by law referred to below) to or upon the Borrower or any other
Person (all and each of which demands, defenses, advertisements
and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell,
assign, give option or options to purchase or otherwise dispose
of and deliver the Collateral or any part thereof (or contract to
do any of the foregoing), in one or more parcels at public or
private sale or sales, in the over-the-counter market, at any
exchange, broker's board or office of the Collateral Agent or any
Lender or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit
risk. The Collateral Agent or any Lender shall have the right
upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or
equity of redemption in the Borrower, which right or equity is
hereby waived or released. The Collateral Agent shall apply any
Proceeds from time to time held by it and the net proceeds of any
such collection, recovery, receipt, appropriation, realization or
sale, after deducting all reasonable costs and expenses of every
kind incurred in respect thereof or incidental to the care or
safekeeping of any of the Collateral or in any way relating to
the Collateral or the rights of the Collateral Agent and the
Lenders hereunder, including, without limitation, reasonable
attorneys' fees and disbursements of counsel to the Collateral
Agent, to the payment in whole or in part of the Obligations, in
such order as the Collateral Agent shall determine, and only
after such application and after the payment by the Collateral
Agent of any other amount required by any provision of law,
including, without limitation, Section 9-504(1)(c) of the Code,
need the Collateral Agent account for the surplus, if any, to the
Borrower. To the extent permitted by applicable law, the
Borrower waives all claims, damages and demands it may acquire
against the Collateral Agent or any Lender arising out of the
exercise by them of any rights hereunder. If any notice of a
proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other
disposition.
(c) The Borrower waives and agrees not to assert any
rights or privileges which it may acquire under Section 9-112 of
the Code. The Borrower shall remain liable for any deficiency if
the proceeds of any sale or other disposition of Collateral are
insufficient to pay the Obligations and the fees and
disbursements of any attorneys employed by the Collateral Agent
or any other Lender to collect such deficiency.
9. Registration Rights; Private Sales. (a) If the
Collateral Agent shall determine to exercise its right to sell
any or all of the Pledged Stock pursuant to Section 8(b) hereof,
and if in the opinion of the Collateral Agent it is necessary or
advisable to have the Pledged Stock, or that portion thereof to
be sold, registered under the provisions of the Securities Act,
the Borrower will use its best efforts to cause the Issuer to (i)
execute and deliver, and cause the directors and officers of the
Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may
be, in the opinion of the Collateral Agent, necessary or
advisable to register the Pledged Stock, or that portion thereof
to be sold, under the provisions of the Securities Act, (ii) to
use its best efforts to cause the registration statement relating
thereto to become effective and to remain effective for a period
of one year from the date of the first public offering of the
Pledged Stock, or that portion thereof to be sold, and (iii) to
make all amendments thereto and/or to the related prospectus
which, in the opinion of the Collateral Agent, are necessary or
advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities
and Exchange Commission applicable thereto. The Borrower agrees
to use its best efforts to cause the Issuer to comply with the
provisions of the securities or "Blue Sky" laws of any and all
jurisdictions which the Collateral Agent shall designate and to
make available to its security holders, as soon as practicable,
an earnings statement (which need not be audited) which will
satisfy the provisions of Section 11(a) of the Securities Act.
(b) The Borrower recognizes that the Collateral Agent
may be unable to effect a public sale of any or all the Pledged
Stock, by reason of certain prohibitions contained in the
Securities Act and applicable state securities laws or otherwise,
and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for
their own account for investment and not with a view to the
distribution or resale thereof. The Borrower acknowledges and
agrees that any such private sale may result in prices and other
terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private
sale shall be deemed to have been made in a commercially
reasonable manner. The Collateral Agent shall be under no
obligation to delay a sale of any of the Pledged Stock for the
period of time necessary to permit the Issuer thereof to register
such securities for public sale under the Securities Act, or
under applicable state securities laws, even if the Issuer would
agree to do so.
(c) The Borrower further agrees to use its best
efforts to do or cause to be done all such other acts as may be
necessary to make such sale or sales of all or any portion of the
Pledged Stock pursuant to this Section valid and binding and in
compliance with any and all other applicable Requirements of Law.
The Borrower further agrees that a breach of any of the covenants
contained in this Section will cause irreparable injury to the
Collateral Agent and the Lenders, that the Collateral Agent and
the Lenders have no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant
contained in this Section shall be specifically enforceable
against the Borrower, and the Borrower hereby waives and agrees
not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event
of Default has occurred.
10. Irrevocable Authorization and Instruction to
Issuer. The Borrower hereby authorizes and instructs the Issuer
to comply with any instruction received by it from the Collateral
Agent in writing that (a) states that an Event of Default has
occurred and (b) is otherwise in accordance with the terms of
this Agreement, without any other or further instructions from
the Borrower, and the Borrower agrees that the Issuer shall be
fully protected in so complying.
11. Collateral Agent's Appointment as Attorney-in-Fact.
(a) The Borrower hereby irrevocably constitutes and
appoints the Collateral Agent and any officer or agent of the
Collateral Agent, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of the Borrower and in the name
of the Borrower or in the Collateral Agent's own name, from time
to time in the Collateral Agent's discretion, for the purpose of
carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the
purposes of this Agreement, including, without limitation, any
financing statements, endorsements, assignments or other
instruments of transfer.
(b) The Borrower hereby ratifies all that said
attorneys shall lawfully do or cause to be done pursuant to the
power of attorney granted in Section 11(a). All powers,
authorizations and agencies contained in this Agreement are
coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are
released.
12. Duty of Collateral Agent. The Collateral Agent's
sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section
9-207 of the Code or otherwise, shall be to deal with it in the
same manner as the Collateral Agent deals with similar securities
and property for its own account, except that the Collateral
Agent shall have no obligation to invest funds held in any
Collateral Account and may hold the same as demand deposits.
Neither the Collateral Agent, any Lender nor any of their
respective directors, officers, employees or agents shall be
liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon
the request of the Borrower or any other Person or to take any
other action whatsoever with regard to the Collateral or any part
thereof.
13. Execution of Financing Statements. Pursuant to
Section 9-402 of the Code, the Borrower authorizes the Collateral
Agent to file financing statements with respect to the Collateral
without the signature of the Borrower in such form and in such
filing offices as the Collateral Agent reasonably determines
appropriate to perfect the security interests of the Collateral
Agent and the Lenders under this Agreement. A carbon,
photographic or other reproduction of this Agreement shall be
sufficient as a financing statement for filing in any
jurisdiction.
14. Authority of Collateral Agent. The Borrower
acknowledges that the rights and responsibilities of the
Collateral Agent under this Agreement with respect to any action
taken by the Collateral Agent or the exercise or non-exercise by
the Collateral Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the
Collateral Agent and the Lenders, be governed by such agreements
with respect thereto as may exist from time to time among them,
but, as between the Collateral Agent and the Borrower, the
Collateral Agent shall be conclusively presumed to be acting as
agent for the Lenders with full and valid authority so to act or
refrain from acting, and neither the Borrower nor the Issuer
shall be under any obligation, or entitlement, to make any
inquiry respecting such authority.
15. Notices. Notices may be given by hand, by
telecopy, or by nationally recognized overnight courier service,
addressed or transmitted to the Person to which it is being given
at such Person's address or transmission number set forth in the
Credit Agreement and shall be effective (a) when delivered by
hand, (b) in the case of a nationally recognized overnight
courier service, one Business Day after delivery to such courier
service, and (c) in the case of telecopy notice when received.
The Borrower may change its address and transmission number by
written notice to the Collateral Agent, and the Collateral Agent
or any Lender may change its address and transmission number by
written notice to the Borrower and, in the case of a Lender, to
the Collateral Agent.
16. Severability. Any provision of this Agreement
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.
17. Amendments in Writing; No Waiver; Cumulative
Remedies. (a) None of the terms or provisions of this Agreement
may be waived, amended, supplemented or otherwise modified except
by a written instrument executed by the Borrower and the
Collateral Agent.
(b) Neither the Collateral Agent nor any Lender shall
by any act (except by a written instrument pursuant to Section
17(a) hereof), delay, indulgence, omission or otherwise be deemed
to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of
any of the terms and conditions hereof. No failure to exercise,
nor any delay in exercising, on the part of the Collateral Agent
or any Lender, any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other
or further exercise thereof or the exercise of any other right,
power or privilege. A waiver by the Collateral Agent or any
Lender of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the
Collateral Agent or such Lender would otherwise have on any
future occasion.
(c) The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.
18. Section Headings. The section headings used in
this Agreement are for convenience of reference only and are not
to affect the construction hereof or be taken into consideration
in the interpretation hereof.
19. Successors and Assigns. This Agreement shall be
binding upon the successors and assigns of the Borrower and shall
inure to the benefit of the Collateral Agent and the Lenders and
their successors and assigns.
20. Governing Law. This Agreement shall be governed
by, and construed and interpreted in accordance with, the law of
the State of New York.
IN WITNESS WHEREOF, the undersigned has caused this
Agreement to be duly executed and delivered as of the date first
above written.
AUDIOVOX CORPORATION
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Sr. Vice Pres.& CFO
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy
of the Stock Pledge Agreement, dated as of July __, 1996 (as the
same may be amended, supplemented, waived or otherwise modified
from time to time, the "Pledge Agreement"), made by Audiovox
Corporation, a Delaware corporation (the "Borrower"), in favor of
The Chase Manhattan Bank, a New York banking corporation, as
collateral agent (in such capacity, the "Collateral Agent") for
the several banks and other financial institutions (collectively,
the "Lenders"; individually, a "Lender") from time to time
parties to the Second Amended and Restated Credit Agreement,
dated as of May 5, 1995 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the
Borrower, the several banks and other financial institutions from
time to time parties thereto (collectively, the "Lenders";
individually, a "Lender") and The Chase Manhattan Bank, a New
York banking corporation, as administrative and collateral agent
for the Lenders (in such capacity, the "Agent"). The undersigned
agrees for the benefit of the Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the
Pledge Agreement and will comply with such terms insofar as
such terms are applicable to the undersigned.
2. The undersigned will notify the Agent promptly in
writing of the occurrence of any of the events described in
Section 5(a) of the Pledge Agreement.
3. The terms of Section 9(c) of the Pledge Agreement
shall apply to it, mutatis mutandis, with respect to all
actions that may be required of it under or pursuant to or
arising out of Section 9 of the Pledge Agreement.
AUDIOVOX COMMUNICATIONS CORP.
By:s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:Sr. Vice Pres. & CFO
SCHEDULE 1
TO PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
Stock
Class of Certificate No. of
Issuer Stock* No. Shares
Audiovox Communications
Corp. 1 10
*Stock is assumed to be common stock unless otherwise
indicated.