Amendment No. 2 To The Credit Agreement

EXHIBIT 10.2


AMENDMENT NO. 2 TO THE CREDIT AGREEMENT


AMENDMENT NO. 2 TO THE CREDIT AGREEMENT, dated as of May 10, 2001 (this "Agreement") among RECOTON CORPORATION, a New York corporation ("Recoton"), INTERACT ACCESSORIES, INC., a Delaware corporation ("InterAct"), RECOTON AUDIO CORPORATION, a Delaware corporation ("Audio"), AAMP OF FLORIDA, INC., a Florida corporation ("AAMP"), and RECOTON HOME AUDIO, INC., a California corporation ("RHAI" and together with Recoton, InterAct, Audio, AAMP and RHAI, collectively, the "Borrowers"), the Guarantors, the Lenders, HELLER FINANCIAL, INC., a Delaware corporation, for itself as a Lender and as Administrative Agent and as Senior Agent and GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation for itself as a Lender and as Collateral Agent and as Syndication Agent. The Administrative Agent, Senior Agent and the Collateral Agent are sometimes referred to herein as the "Agents". Capitalized terms used herein and not otherwise defined herein shall have the meaning set forth in the Credit Agreement dated as of October 31, 2000 (as amended by the Consent and Amendment No. 1 to the Credit Agreement and Amendment No. 1 to the Security Agreement, dated as of February 7, 2001, as the same may be further amended from time to time, the "Credit Agreement") among the Borrowers, the Guarantors, the Lenders and the Agents.


R E C I T A L S:
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WHEREAS, the Borrowers, the Guarantors, the Lenders and the Agents have entered into the Credit Agreement;


WHEREAS, the Borrowers have requested that the Lenders agree to amend Section A (Consolidated Tangible Net Worth) of the Financial Covenants Rider to the Credit Agreement; and


WHEREAS, subject to the terms and conditions of this Agreement, the Lenders have agreed to amend Section A (Consolidated Tangible Net Worth) of the Financial Covenants Rider to the Credit Agreement as specifically set forth herein;


NOW, THEREFORE, it is agreed as follows:


Section 1. Amendment to Section A of the Financial Covenants Rider. Section A (Consolidated Tangible Net Worth) of the Financial Covenants Rider to the Credit Agreement is hereby amended by deleting said Section in its entirety and by substituting therefor the following:


"A. Consolidated Tangible Net Worth. Recoton and its Subsidiaries shall attain a Consolidated Tangible Net Worth in the amounts set forth below at the end of each quarter of a Fiscal Year set forth below:


Fiscal Quarter Ending Amount


December 31, 2000 $76,500,000 March 31, 2001 $74,900,000 June 30, 2001 $73,800,000 September 30, 2001 $76,100,000 December 31, 2001 $86,500,000 March 31, 2002 $84,600,000 June 30, 2002 $84,100,000 September 30, 2002 $87,000,000 December 31, 2002 $97,800,000 March 31, 2003 $96,400,000 June 30, 2003 $96,500,000"


Section 2. Representations and Warranties. The Borrowers and Guarantors hereby represent and warrant to each Agent and each Lender that after giving effect to this Agreement:


(a) no Default or Event of Default has occurred and is continuing on and as of the date hereof;


(b) the representations and warranties of the Borrowers and the other Loan Parties contained in the Credit Agreement and the other Loan Documents are true and correct on and as of the date hereof as if made on and as of the date hereof, except to the extent such representations and warranties expressly relate to a different date; and


(c) the execution and delivery by the Borrowers and the Guarantors of this Agreement and the performance by the Borrowers and the Guarantors of all of their respective agreements and obligations under this Agreement and the Credit Agreement, as amended hereby, are within the power and authority of the Borrowers and the Guarantors and have been duly authorized by all necessary action on the part of the Borrowers and the Guarantors, and that the execution and delivery by the Borrowers and the Guarantors, of this Agreement and the performance by each of the transactions contemplated hereby will not contravene any term or condition set forth in any material agreement or instrument to which each is a party or by which each is bound.


Section 3 Effectiveness. This Agreement shall become effective ...