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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): July 8, 1998
AUDIOVOX CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-9532 13-1964841
(State or other jurisdiction (Commission (IRS Employer Identification
of Incorporation or File Number) Number)
organization)
150 Marcus Boulevard, Hauppauge, New York 11788
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 231-7750
NONE
(Former name, former address and former fiscal year, if changed
since last report)
Page 1 of 4
Exhibit Index on Page 4
Item 5. Other Events
A. Waiver and Twelfth Amendment to the Second Amended and Restated
Credit Agreement
Effective July 8, 1998, the Company and its Lenders executed a Waiver and
Twelfth Amendment to the Company's Second Amended and Restated Credit Agreement
(the "Waiver and Twelfth Amendment").
The Waiver and Amendment, among other things, (i) waives compliance by the
Company with the provisions of subsection 9.1(a) (I) (A) with respect to the two
consecutive fiscal quarters of the Company ending May 31, 1998, provided that
the amount of the Consolidated Pre-Tax Loss for such two consecutive fiscal
quarters shall not exceed $6,485,000; (ii) waives compliance by the Company with
the provisions of subsection 9.1(a) (iii) with respect to the fiscal quarter of
the Company ending May 31, 1998 provided that they amount of the Consolidated
Pre-Tax Loss for such fiscal quarter shall not exceed $8,721,000; and, (iii)
amends subsection 9.9 to allow for the Company's investment in Shintom Co., Ltd.
Page 2 of 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AUDIOVOX CORPORATION
Dated: July 20, 1998 By: s/Charles M. Stoehr
Charles M. Stoehr
Senior Vice President and
Chief Financial Officer
Page 3 of 4
EXHIBIT INDEX
Exhibit Description
1 Waiver and Twelfth Amendment dated as of
July 8, 1998 to the Audiovox Corporation
Second Amended and Restated Credit Agreement
Page 4 of 4
WAIVER and TWELFTH AMENDMENT, dated as of July 8, 1998 (this "Waiver and
Amendment"), 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, the Fourth Amendment and
Consent thereto, dated as of July 29, 1996, the Fifth Amendment thereto dated as
of September 10, 1996, the Sixth Amendment thereto dated as of November 27,
1996, the Seventh Amendment and Waiver thereto dated as of February 5, 1997, the
Eighth Amendment thereto dated as of March 7, 1997, the Ninth Amendment thereto
dated as of August 19, 1997, the Tenth Amendment thereto dated as of October 24,
1997, the Eleventh Amendment thereto dated as of March 20, 1998 and this
Amendment, 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 E T H :
WHEREAS, the Borrower, the Lenders and the Agent are parties to the Credit
Agreement; and
WHEREAS, the Borrower has requested that the Lenders waive and amend
certain terms in the Credit Agreement in the manner provided for herein; and
WHEREAS, the Agent and the Lenders are willing to agree to the requested
waiver and amendment;
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. Amendment of Section 6. Section 6 of the Credit Agreement is hereby
amended by inserting the following new subsection at the end thereof:
"6.24 Year 2000 Reprogramming. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (a) the Borrower's
computer systems and (b) equipment containing embedded microchips
(including systems and equipment supplied by others or with which the
Borrower's systems interface) and the testing of all such systems and
equipment, as so reprogrammed, will be completed by June 30, 1999. The cost
to the Borrower of such reprogramming and testing and of the reasonably
foreseeable consequences of year 2000 to the Borrower (including, without
limitation, reprogramming errors and the failure of others' systems or
equipment) will not result in a Default or a Material Adverse Effect.
Except for such of the reprogramming referred to in the preceding sentence
as may be necessary, the computer and management information systems of the
Borrower and its Subsidiaries are and, with ordinary course upgrading and
maintenance, will continue for the term of this Agreement to be, sufficient
to permit the Borrower to conduct its business without Material Adverse
Effect."
3. Waiver of Subsection 9.1(a). (a) The Lenders hereby waive compliance by
the Borrower with the provisions of subsection 9.1(a)(i)(A) with respect to the
two consecutive fiscal quarters of the Borrower ending May 31, 1998, provided
that the amount of the Consolidated Pre-Tax Loss for such two consecutive fiscal
quarters shall not exceed $6,485,000; and
(b) The Lenders hereby waive compliance by the Borrower with the provisions
of subsection 9.1(a)(iii) with respect to the fiscal quarter of the Borrower
ending May 31, 1998, provided that the amount of the Consolidated Pre-Tax Loss
for such fiscal quarter shall not exceed $8,721,000.
4. Waiver of Subsection 9.9. The Lenders hereby waive any violation of
subsection 9.9 of the Credit Agreement from March 26, 1998 through the date
hereof in connection with the Shintom Investment.
5. Amendment of Subsection 9.9. Subsection 9.9 of the Credit Agreement is
hereby amended by deleting paragraph (f) thereof and substituting in lieu of
said paragraph the following:
"(f) (i) Investments by the Borrower and its Subsidiaries in (A) any
newly formed Joint Venture or Subsidiary (other than a Domestic
Subsidiary), (B) any existing Joint Venture or Subsidiary (other than a
Domestic Subsidiary) made after the date hereof, not to exceed $5,000,000
with respect to any single such investment, and (C) Shintom Co., Ltd. in
the form of an Investment totalling up to $6,000,000 in convertible
debentures thereof or in the common stock thereof upon conversion of such
debentures (the "Shintom Investment") and (ii) acquisitions of all the
capital stock or all or substantially all of the assets of any Person,
provided that (x) the aggregate amount of all such Investments and
acquisitions after the date hereof (less the net cash proceeds from any
sale or other disposition of the Shintom Investment or any part thereof)
shall not exceed $10,000,000 in the aggregate, (y) to the extent that any
such Subsidiary in which an Investment is made is or becomes a Material
Foreign Subsidiary, the Borrower and such Material Foreign Subsidiary
comply with the provisions of subsection 8.7 and (z) to the extent that any
acquisition pursuant to clause (ii) above results in the acquisition or
creation of a Subsidiary, the Borrower and such Subsidiary comply with the
provisions of subsection 8.7."
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. This Waiver and Amendment shall become effective as of
the date first written above upon receipt by the Agent of counterparts of this
Waiver and Amendment duly executed by the Borrower and the Required Lenders.
8. Continuing Effect; No Other Waivers. 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 waiver 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
subsection 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 Waiver and Amendment).
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 Waiver and Amendment, including, without
limitation, the reasonable fees and disbursements of counsel to the Agent.
10. Counterparts. This Waiver and Amendment 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 WAIVER AND AMENDMENT 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 Waiver and
Amendment 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
Name:
Title: Senior Vice President/Chief Financial
Officer
THE CHASE MANHATTAN BANK,
as Agent and as a Lender
By: \s\ John K. Budzynski
Name:
Title: Assistant Vice President
FLEET BANK, N.A., as a Lender
By: \s\ Steven J. Melicharek
Name:
Title: Senior Vice President
BANKBOSTON, as a Lender
By: \s\ Neal Hesler
Name:
Title: Vice President
EUROPEAN AMERICAN BANK,
as a Lender
By: \s\ Anthony V. Pantina
Name:
Title: Assistant Vice President
THE CIT GROUP/BUSINESS CREDIT, INC.
as a Lender
By: \s\ Karen Hoffman
Name:
Title: Assistant Vice President
MELLON BANK, N.A.,
as a Lender
By: \s\ Christine G. Dekajlo
Name:
Title: First 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 Waiver and Amendment to which
this Acknowledgement and Consent is attached.
QUINTEX COMMUNICATIONS CORP.
By: \s\ Charles M. Stoehr
Name:
Title: Vice President
QUINTEX MOBILE
COMMUNICATIONS CORP.
By: \s\ Charles M. Stoehr
Name:
Title: Vice President
HERMES TELECOMMUNICATIONS
INC.
By: \s\ Charles M. Stoehr
Name:
Title: Secretary/Treasurer
LENEX CORPORATION
By: \s\ Charles M. Stoehr
Name:
Title: Secretary/Treasurer
AMERICAN RADIO CORP.
By: \s\ Charles M. Stoehr
Name:
Title: Vice President
AUDIOVOX INTERNATIONAL CORP.
By: \s\ Charles M. Stoehr
Name:
Title: Senior Vice President
AUDIOVOX HOLDING CORP.
By: \s\ Chris Lazarides
Name:
Title: President
AUDIOVOX CANADA LIMITED
By: \s\ Charles M. Stoehr
Name:
Title: Vice President
AUDIOVOX ASIA INC.
By: \s\ Charles M. Stoehr
Name:
Title: Vice President
AUDIOVOX LATIN AMERICA LTD.
By: \s\ Charles M. Stoehr
Name:
Title: Vice President
AUDIOVOX COMMUNICATIONS CORP.
By: \s\ Charles M. Stoehr
Name:
Title: Secretary
Dated as of July 8, 1998