EXHIBIT 10(Y)
SECOND AMENDMENT TO GUARANTY AND SURETYSHIP AGREEMENT
THIS SECOND AMENDMENT TO GUARANTY AND SURETYSHIP AGREEMENT (this
"Amendment"), dated as of November 27, 1998, between ALP (TX) QRS 11-28, INC., a
Texas corporation ("Landlord"), SUPERIOR TELECOM INC., a Delaware corporation
("TeleCom" or the "Company"), and THE ALPINE GROUP, INC., a Delaware corporation
("Alpine").
W I T N E S S E T H
WHEREAS, Landlord and Alpine entered into that certain Guaranty and
Suretyship Agreement, dated as of December 16, 1993, as modified by a Consent of
Guarantor instrument executed on or about May 10, 1995 and a Consent of
Guarantor instrument executed on or about October 3, 1996 (as modified, the
"Guaranty Agreement");
WHEREAS, the parties hereto are entering into this Amendment
concurrently with the closing of an Amended and Restated Credit Agreement by and
among Superior/Essex Corp., Essex Group, Inc., the Subsidiary Guarantors a party
thereto (including Tenant), the lenders from time to time a party thereto,
Xxxxxxx Xxxxx & Co., as Documentation Agent, Fleet National Bank, as Syndication
Agent, and Bankers Trust Company, as Administrative Agent, dated as of November
27, 1998; and
WHEREAS, the parties hereto have agreed to amend the Guaranty
Agreement as hereinafter set forth.
NOW, THEREFORE, intending to be legally bound and for good valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto covenant and agree as follows:
1. Definitions. Capitalized terms used herein and in Annex A hereto
and not otherwise defined shall have the meanings assigned to them in the
Guaranty Agreement.
2. Waiver. Landlord hereby waives compliance by Alpine with the
Covenants contained in the Third Amendment to Lease, dated October 3, 1996, in
connection with the occurrence of the transactions substantially as described on
Annex A attached hereto, including such other transactions as may be incidental
to or necessary or desirable to give effect to such transactions.
3. Financial Covenants.
a. Alpine shall not be bound by or obliged to comply with the
Covenants contained in the Lease or in any amendment to the Lease.
b. TeleCom covenants and agrees to observe and be bound by the
covenants annexed hereto as Exhibit E.
4. Successors and Assigns. Except as specifically amended by this
Amendment, the terms and conditions of the Guaranty Agreement shall remain in
full force and effect and shall be binding upon Landlord and Guarantor and their
respective successors and assigns.
5. Governing Law. This Amendment shall be governed by and construed
in accordance with the laws of the State of Texas.
6. Counterparts. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed shall be deemed an original, but all such counterparts
shall constitute but one and the same instrument.
* * *
[Signature Page to Second Amendment to Guaranty and Suretyship Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the date first above written.
ATTEST ALP (TX) QRS 11-28, INC.
By:______________________ By:________________________
Name: Name:
Title: Title:
ATTEST THE ALPINE GROUP, INC.
By:______________________ By:_________________________
Name: Name:
Title: Title:
ATTEST SUPERIOR TELECOM INC.
By:______________________ By:_________________________
Name: Name:
Title: Title:
ANNEX A
DESCRIPTION OF TRANSACTIONS
SUT Acquisition Corp. ("SUT"), a wholly owned subsidiary of Superior
TeleCom Inc. ("Superior"), will purchase up to 22,562,135 shares of the common
stock of Essex International, $.01 par value per share (the "Common Stock"),
pursuant to a tender offer for such shares of Common Stock commenced on or about
October 28, 1998 (the "Offer"), as such Offer is further described in the Offer
to Purchase dated October 28, 1998 (the "Offer to Purchase"), a copy of which is
annexed hereto. The Offer is being made pursuant to an Agreement and Plan of
Merger dated as of October 21, 1998, by and among Superior, SUT and Essex
International, whereby subsequent to the purchase of the Common Stock pursuant
to the Offer, SUT will be merged with and into Essex International, and Essex
International will continue as the surviving corporation and become a wholly
owned subsidiary of Superior (the "Merger"), as such Merger is further described
in the Offer to Purchase.
The total amount of funds required by SUT to consummate the Offer
and the Merger (including the refinancing of certain indebtedness of Superior
and Essex International) and to pay related fees and expenses is estimated to be
approximately $1.30 billion. SUT will obtain all of such funds from Superior.
Superior currently intends to provide such funds from loans available pursuant
to a (i) Senior Secured Credit Facility (the "Senior Credit Facility") to be
entered into by Superior/Essex Corp., a newly formed Delaware corporation and
wholly-owned subsidiary of Superior ("SEC"), Essex Group, Inc., a Michigan
corporation and a subsidiary of Essex International ("Essex Group"), certain
subsidiaries of Superior and Essex as guarantors, various lenders, Xxxxxxx Xxxxx
& Co., as documentation agent ("Merrill"), Fleet National Bank, as syndication
agent ("Fleet"), and Bankers Trust Company, as administrative agent ("Bankers
Trust") and (ii) Senior Subordinated Credit Facility (the "Subordinated Credit
Facility") to be entered into by SEC, certain subsidiaries of Superior
(including Essex International and Essex Group) as guarantors, various lenders
and Bankers Trust. Superior has received a commitment letter dated October 21,
1998 (the "Commitment Letter") in which Bankers Trust has agreed, subject to
certain conditions, to provide the credit facilities in an aggregate amount of
up to $1.45 billion in order to finance the acquisition of Essex International,
to refinance certain existing indebtedness of Superior and Essex International,
to pay related fees and expenses and to provide for the working capital
requirements of Superior or its subsidiaries (including Essex International).
The following is a summary of the anticipated material terms and
conditions of the approximately $1.15 billion Senior Credit Facility and is
subject to the detailed provisions of the loan agreement and various related
documents to be negotiated and entered into in connection with the Senior Credit
Facility:
o The Senior Credit Facility will be comprised of two tranches of
term loans and a revolving credit facility. Interest on amounts
outstanding under the Senior Credit Facility will be based upon either (i)
the Federal Reserve reported certificate of deposit rate, Bankers Trust's
prime lending rate or an adjusted certificate of deposit rate or (ii) the
Euro rate
plus, in each case, an applicable margin, a variable component which, in
certain circumstances, will be subject to adjustment based on the leverage
ratio maintained by SEC. SEC and Essex Group will also pay Bankers Trust
underwriting and administrative fees, reimburse certain expenses and
provide certain indemnities. The two tranches of term loans will have five
and one-half and seven year terms, and the revolving credit facility will
have a five and one-half year term. Each of the term loans will require
periodic mandatory amortization payments.
o The obligations of each of SEC and Essex Group under the Senior
Credit Facility will be unconditionally guaranteed by the other party and
their respective obligations will be guaranteed by certain of their
respective subsidiaries. The indebtedness incurred under the Senior Credit
Facility will also be secured by a first priority lien on substantially
all the assets of SEC, Essex Group and their subsidiaries.
o SEC, Essex Group and certain of their respective subsidiaries will
be subject to certain customary affirmative and negative covenants under
the Senior Credit Facility, including, without limitation, covenants that
restrict, subject to specified exceptions, (i) the incurrence of
additional indebtedness and other obligations, (ii) mergers and
acquisitions, (iii) asset sales, (iv) the granting of liens, (v)
prepayment or repurchase of other indebtedness, (vi) engaging in
transactions with affiliates, (vii) capital expenditures, (viii) the
making of investments and (ix) dividends and other payments with respect
to equity interests.
Concurrently with the closing of the Senior Credit Facility, SEC
will also enter into the $200,000,000 Subordinated Credit Facility. The
following is a summary of the anticipated material terms and conditions of the
Subordinated Credit Facility and is subject to the detailed provisions of the
loan agreement and various related documents to be negotiated and entered into
in connection with the Subordinated Credit Facility:
o The Subordinated Credit Facility will be a general unsecured
obligation of Superior which will rank pari passu in right of payment with
all future senior subordinated indebtedness and senior to all other
subordinated indebtedness. The Subordinated Credit Facility will be
guaranteed by certain subsidiaries of Superior (including Essex), on a
joint and several basis. The Subordinated Credit Facility will mature in
2006 and will be redeemable at the option of SEC at any time after
closing. Upon a change of control (as defined in the Subordinated Credit
Facility), SEC will be required to offer to repurchase the Subordinated
Credit Facility indebtedness at a purchase price equal to 101% of the
principal amount thereof, plus accrued interest thereon to the date of
repurchase. Mandatory prepayments will required from: (i) the net proceeds
from issuances of debt and (ii) the net proceeds from equity issuances
with customary exceptions to be agreed upon, in each case to the extent
not required to repay senior indebtedness (i.e., the Senior Credit
Facility). Proceeds of the Subordinated Credit Facility will be used to
finance the Offer, to refinance certain existing indebtedness of SEC and
Essex International and to pay related fees and expenses.
o Interest on the Subordinated Credit Facility will be payable
quarterly. For the first six months after the borrowing date, interest
will be based upon LIBOR plus 4.25% and if LIBOR rate loans are not
available, the alternate base rate (the higher of prime or 1/2 of 1% over
the Federal Funds Rate) plus 3.25%. Upon the six month anniversary of the
borrowing date, interest will be based upon LIBOR plus 4.50% and if LIBOR
rate loans are not available, the alternate base rate plus 3.50%. Upon the
12 month anniversary of the borrowing date, interest will be based upon
LIBOR plus 5.00% and if LIBOR rate loans are not available, the alternate
base rate plus 4.00%. After the interest rate increase on the 12 month
anniversary of the borrowing date, the interest rate will increase by
0.25% per quarter, but the maximum interest rate will be LIBOR plus 5.50%
and if LIBOR rate loans are not available, the alternate base rate plus
4.50%.
o The Subordinated Credit Facility will contain a cross-acceleration
to the Senior Credit Facility and will also contain covenants limiting the
ability of SEC and its subsidiaries (including Essex International) to,
among other things, pay dividends or make other restricted payments, make
investments, incur additional indebtedness, permit liens, enter into any
consolidation, merger, conveyance or lease transactions, make asset sales,
enter into transactions with affiliates and engage in unrelated lines of
business.
Subsequent to the transactions described above, Essex may be merged
with or into either Superior or any subsidiary of Superior (the "Post-Closing
Merger"). In connection with the Merger, The Alpine Group, Inc., a Delaware
corporation that owns 50.1% of Superior, will receive a $10,000,000 fee in
respect of financial advisory services rendered to Superior in connection with
the acquisition of Essex International. The transactions described above (the
"Transactions") are more particularly described in the Offer to Purchase, a copy
of which is attached hereto.
EXHIBIT E TO SECOND AMENDMENT TO GUARANTY AND SURETYSHIP AGREEMENT
EXHIBIT E TO SECOND AMENDMENT TO GUARANTY AND SURETYSHIP AGREEMENT
SECTION 10. Definitions. As used in this Exhibit E, the following
terms shall have the meanings herein specified unless the context otherwise
requires. Defined terms in this Exhibit E shall include in the singular number
the plural and in the plural the singular:
"Lease Agreement shall mean the Lease Agreement, dated as of
December 16, 1993, between December 16, 1993, between ALP (TX) QRS 11-28, INC.,
a Texas corporation ("Landlord"), and Superior Telecommunications Inc., a
Georgia corporation f/k/a Superior Teletec, Inc., and Superior Teletec
Transmission Products, Inc., ("Tenant" or "Superior"), as amended.
"Acquisition" shall have the meaning provided in the recitals to the
Agreement.
"Acquisition Co" shall have the meaning provided in the recitals to
the Agreement.
"Acquisition Documents" shall mean each of the Tender Offer
Documents and the Merger Agreement.
"Additional Collateral" shall have the meaning provided in Section
7.11 of the Agreement.
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the
sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing
(x) the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market as
published in the most recent Federal Reserve System publication entitled "Select
Interest Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Administrative Agent on the basis of quotations
for such certificates received by it from three certificate of deposit dealers
in New York of recognized standing or, if such quotations are unavailable, then
on the basis of other sources reasonably selected by the Administrative Agent,
by (y) a percentage equal to 100% minus the stated maximum rate of all reserve
requirements as specified in Regulation D applicable on such day to a
three-month certificate of deposit of a member bank of the Federal Reserve
System in excess of $100,000 (including, without limitation, any marginal,
emergency, supplemental, special or other reserves), plus (2) the then daily net
annual assessment rate as estimated by the Administrative Agent for determining
the current annual assessment payable by BTCo to the Federal Deposit Insurance
Corporation for insuring three month certificates of deposit.
"Administrative Agent" shall have the meaning provided in the first
paragraph of the Agreement and shall include any successor to the Administrative
Agent appointed pursuant to Section 11.10 of the Agreement.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and executive officers of such Person), controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power (i) to
vote 10% or more of the securities having ordinary voting power for the election
of directors of such corporation or (ii) to direct or cause the direction of the
management and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise. Without limiting the foregoing,
Alpine and its Affiliates shall be deemed to be Affiliates of the Company and
its Subsidiaries so long as the Service Agreement is in place.
"Agent" shall mean the Administrative Agent, the Documentation Agent
and the Syndication Agent, collectively.
"Agreement" shall mean the Amended and Restated Credit Agreement,
dated as of November 27, 1998, among Superior/Essex Corp., Essex Group, Inc.,
the guarantors named therein, the lending institutions party thereto from time
to time, Xxxxxxx Xxxxx & Co., as Documentation Agent, Fleet National Bank, as
Syndication Agent, and Bankers Trust Company, as Administrative Agent.
"Alternate Currency" shall mean Pounds Sterling or Euros, provided
that Euros shall not be available as an Alternate Currency until January 15,
1999 (assuming commencement of the third stage of European Monetary Union).
"Alternate Currency Loan" shall mean each Revolving Loan denominated
in an Alternate Currency and bearing interest at the rates provided in Section
1.08(b).
"Alternate Currency Loan Lender" shall mean (i) BTCo or (ii) any
Affiliate of BTCo designated by it and one or more banks acceptable to BTCo and
reasonably acceptable to the Borrowers.
"Alternate Currency Loan Sublimit" shall have the meaning provided
in Section 1.01(c) of the Agreement.
"Alternate Currency Overdue Amounts" shall have the meaning provided
in Section 1.01(f) of the Agreement.
"Alpine" shall mean The Alpine Group, Inc., a Delaware corporation,
which currently owns approximately 50.1% of the outstanding stock of the Parent.
"Alpine Tax Allocation Agreement" shall mean the tax allocation
agreement by and among Alpine, the Parent and their Affiliates dated as of
October 2, 1996, effective as of May 1, 1996.
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"Applicable Base Rate Margin" shall mean (i) in the case of each of
the Revolving Loans and Tranche A Term Loans, a percentage per annum equal to
2.00% and (ii) in the case of Tranche B Term Loans, a percentage per annum equal
to 2.75%; provided that the percentage set forth in clause (i) above shall be
adjusted by the applicable Interest Reduction Discount.
"Applicable Euro Rate Margin" shall mean (i) in the case of each of
the Revolving Loans and Tranche A Term Loans, a percentage per annum equal to
3.00% and (ii) in the case of Tranche B Term Loans, a percentage per annum equal
to 3.75%; provided that the percentage set forth in clause (i) above shall be
adjusted by the applicable Interest Reduction Discount.
"Applicable Percentage" shall mean 75%, unless the Pro Forma
Leverage Ratio computed, if applicable, after giving effect to the application
of cash proceeds as a mandatory repayment, is less than 4.00:1.0, in which case
the Applicable Percentage shall mean 50%.
"Asset Sale" shall mean any sale, transfer or other disposition by
either of the Borrowers or any of their respective Subsidiaries to any Person of
any asset (including, without limitation, any capital stock or other securities
of another Person, but excluding the sale by such Person of its own capital
stock) of either of the Borrowers or such Subsidiaries other than (i) sales,
transfers or other dispositions of inventory made in the ordinary course of
business and (ii) sales of assets pursuant to Sections 8.02(d), (e), (f), (g),
(h), (i) and (n) of the Agreement.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit I (appropriately
completed) to the Agreement.
"Authorized Officer" shall mean any senior officer of the Parent,
the Company or Essex, as the case may be, designated as such in writing to the
Landlord by the Company or Essex to the extent reasonably acceptable to the
Landlord.
"Bankruptcy Code" shall have the meaning provided in Section 9.05 of
the Agreement.
"Base Rate" at any time shall mean the highest of (x) the rate which
is 1/2 of 1% in excess of the Adjusted Certificate of Deposit Rate, (y) the
Prime Lending Rate and (z) the rate which is 1/2 of 1% in excess of the Federal
Funds Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the rates
provided in Section 1.08(a) of the Agreement.
"Borrowers" shall mean the Company and, until the consummation of
the Merger, Essex.
"Borrowing" shall mean the borrowing of one Type of Loan of a single
Tranche from all the Lenders having Commitments of the respective Tranche on a
given date (or resulting from a
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conversion or conversions on such date) having in the case of Euro Rate Loans
the same Interest Period; provided that Base Rate Loans incurred pursuant to
Section 1.10(b) of the Agreement shall be considered part of the related
Borrowing of Euro Rate Loans.
"BTCo" shall mean Bankers Trust Company, in its individual capacity,
and any successor corporation thereto by merger, consolidation or otherwise.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Euro Rate Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in U.S. Dollar deposits and deposits in the Alternate Currency in
the London interbank market.
"Cables of Zion" shall mean Cables of Zion United Works Ltd., a
company organized under the laws of Israel.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be added to the fixed assets account on
the consolidated balance sheet of such Person in accordance with GAAP (which
shall not include interest capitalized during construction but only to the
extent included in Consolidated Interest Expense), including all such
expenditures with respect to plant, property or equipment (including, without
limitation, expenditures for maintenance and repairs which should be capitalized
in accordance with GAAP) and the amount of all Capitalized Lease Obligations
incurred by such Person.
"Capital Lease," as applied to any Person, shall mean any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in conformity with GAAP, should be accounted for as a capital lease on the
balance sheet of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Company or any of its Subsidiaries in each case taken at
the amount thereof that should be accounted for as liabilities in accordance
with GAAP.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) or the government of any member
of the European Union having maturities of not more than twelve months from the
date of acquisition, (ii) U.S. dollar denominated and Eurocurrency time
deposits, certificates of deposit and banker acceptances of (x) any Lender or
(y) any commercial bank organized under the laws of the United States, any state
thereof, the District of Columbia, or its branches or agencies or the laws of
any
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member of the European Union and having capital and surplus in an aggregate
amount not less than $500,000,000 (any such bank or Lender, an "Approved
Lender"), in each case with maturities of not more than twelve months from the
date of acquisition, (iii) U.S. Dollar denominated commercial paper issued by
any Approved Lender or by the parent company of any Approved Lender and
commercial paper issued by, or guaranteed by, any industrial or financial
company with a short-term commercial paper rating of at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by Xxxxx'x,
as the case may be, or Eurocurrency commercial paper of British banks of similar
credit quality approved for such purposes by the Administrative Agent in its
sole discretion, and in each case maturing within twelve months after the date
of acquisition, (iv) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within twelve months from the date of
acquisition thereof and, at the time of acquisition having one of the two
highest ratings obtainable from either S&P or Xxxxx'x, (v) any repurchase
agreement entered into with any Approved Lender which is secured by any
obligation of the type described in any of clauses (i) through (iii) and (vi)
investments in money market funds substantially all the assets of which are
comprised of securities of the types described in clauses (i) through (iv)
above.
"Cash Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, but only as and
when so received) received by the Company and/or any of its Subsidiaries from
such Asset Sale.
"Change of Control Event" shall mean (a) the Company shall cease to
own directly 100% on a fully diluted basis of the economic and voting interest
in the capital stock of Superior Telecommunications (other than the shares of
Superior Preferred Stock) or, after consummation of the Merger, of Essex (other
than as a result of the merger of Essex into Superior Telecommunications or
another Subsidiary of the Company), or (b) any Person or "group" (within the
meaning of Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as
in effect on the Effective Date), other than Alpine, shall (A) have acquired
beneficial ownership of 20% or more on a fully diluted basis of the voting
and/or economic interest in the Parent's capital stock (provided, however, such
referenced percentage in this clause (A) shall be 25% if, and so long as, Alpine
directly maintains ownership of more than 30% on a fully diluted basis of the
economic and voting interests in the Parent's capital stock) or (B) obtained the
power (whether or not exercised) to elect a majority of the Company's directors
or (C) the Board of Directors of the Parent shall cease to consist of a majority
of Continuing Directors or (D) the Parent shall cease to own directly 100% on a
fully diluted basis of the economic and voting interest in the Capital Stock of
the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of the
Agreement and any subsequent provisions of the Code
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amendatory thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Pledge Agreement Collateral,
Security Agreement Collateral and Mortgaged Property.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors.
"commencement of the third stage of European Monetary Union" shall
mean the date of commencement of the third stage of European Monetary Union (at
the date of the Agreement expected to be January 1, 1999) or the date on which
circumstances arise which (in the reasonable judgment of the Administrative
Agent) have substantially the same effect and result in substantially the same
consequences as commencement of the third stage of European Monetary Union as
contemplated by the Treaty on European Union.
"Commitment" shall mean any of the commitments of any Lender; i.e.,
whether the Tranche A Term Loan Commitment, Tranche B Term Loan Commitment or
the Revolving Loan Commitment or the commitment of BTCo to make Swingline Loans.
"Commitment Fee" shall have the meaning provided in Section 3.01(a)
of the Agreement.
"Company" shall mean Superior/Essex Corp., a Delaware corporation.
"Condemnation" has the meaning assigned to that term in each
Mortgage.
"Consolidated Debt" shall mean, at any time, all Indebtedness of the
Company and its Subsidiaries determined on a consolidated basis; provided that
for purposes of this definition, the amount of Indebtedness in respect of
Interest Rate Protection Agreements and Other Hedging Agreements shall be at any
time equal to the unrealized net loss position, if any, of the Company and/or
its Subsidiaries thereunder on a marked to market basis determined no more than
one month prior to such time.
"Consolidated EBIT" shall mean, for any period, Consolidated Net
Income, before total interest expense (inclusive of amortization of deferred
financing fees, premiums on Interest Rate Protection Agreements and any original
issue discount) of the Company and its Subsidiaries determined on a consolidated
basis and provisions for taxes based on income, whether paid or deferred.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto the amount of all depreciation expense and
amortization expense plus non-cash compensation expenses relating to restricted
stock and stock-option grants, in each case, that were
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deducted in determining Consolidated EBIT for such period, plus net earnings of
any Person (other than a Subsidiary) in which the Company or any consolidated
Subsidiary has an ownership interest to the extent such net earnings shall have
actually been received by the Company or such consolidated Subsidiary in the
form of cash distributions.
"Consolidated Fixed Charges" shall mean, for any period, without
duplication, the sum of Consolidated Interest Expense for such period plus (v)
all dividends paid or accrued on capital stock of the Company and its
Subsidiaries held by persons other than the Company and its Subsidiaries that
are Guarantors plus (w) the amount of all Capital Expenditures of the Company
(other than Capital Expenditures made pursuant to clause (d) or (e) of Section
8.08) and its Subsidiaries paid or accrued with respect to such period plus (x)
all cash taxes paid or accrued with respect to such period (other than with
respect to net income taxes attributable to items that are excluded from the
calculation of Consolidated Net Income in the period) plus (y) mandatory
principal payments on Indebtedness (other than with respect to Loans) required
to be made during such period pursuant to Sections 4.02(b) and (c) of the
Agreement.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that attributable to (A) any rent paid in respect of
Capital Leases which is or should be allocable to interest expense in accordance
with GAAP and (B) interest capitalized during the construction of any Capital
Expenditure) of the Company and its Subsidiaries determined on a consolidated
basis with respect to all outstanding Indebtedness of the Company and its
Subsidiaries, including, without limitation, all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing, all Fronting Fees and net costs or benefits under Interest
Rate Protection Agreements, but excluding, however, amortization of any payments
made to obtain any Interest Rate Protection Agreement and Other Hedging
Agreements and deferred financing costs and any interest expense on deferred
compensation arrangements to the extent included in total interest expense and,
in the case of the Company and its Subsidiaries, shall include interest accrued
by the Parent on the Trust Preferred Securities as if they were issued as of the
Initial Borrowing Date.
"Consolidated Net Income" shall mean, for any period, the net income
(or loss), after provisions for income taxes (other than with respect to net
income taxes attributable to items that are excluded from the calculation of
Consolidated Net Income in the period), of the Company and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period in
conformity with GAAP but excluding in any event (a) any extraordinary gains (net
of extraordinary losses) but with giving effect to gains or losses from sales of
assets sold in the ordinary course of business; (b) net earnings of any other
Person (other than a Subsidiary) in which the Borrower or any consolidated
Subsidiary has an ownership interest, except to the extent such net earnings
shall have actually been received by the Borrower or such consolidated
Subsidiary in the form of cash distributions; (c) any portion of the net
earnings of any consolidated Subsidiary which is unavailable for payment of
dividends to the Borrowers or any other consolidated Subsidiary by reason of the
provisions of any agreement or applicable law or regulation (including, without
limitation, those agreements referred to in the exceptions
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set forth in Section 8.15 of the Agreement); (d) earnings resulting from any
reappraisal, revaluation or write-up of assets; (e) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of such Person or is
merged into or consolidated with such Person or any of its Subsidiaries or that
Person's assets are acquired by such Person or any of its Subsidiaries; (f) the
aggregate net gain (or loss) during such period arising from the revaluation
(but not sale) of readily marketable securities; (g) the income (or loss) from
discontinued operations; and (h) non- cash charges and cash charges (but only to
the extent such cash charges are reimbursed by a controlling Affiliate in cash
at the time of incurrence thereof), in each case, relating to the Transaction
and repayment of Indebtedness incurred under the Essex Credit Agreement and the
Existing Superior Credit Agreement.
"Contingent Obligations" shall mean as to any Person any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligations of the ability of the primary obligor to make payment
of such primary obligation or (d) otherwise to assure or hold harmless the owner
of such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection or standard contractual indemnities
entered into, in each case in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Continuing Directors" shall mean the directors of the Company on
the Initial Borrowing Date and each other director if such director's nomination
for the election to the Board of Directors of the Company is recommended by a
majority of the then Continuing Directors.
"Credit Documents" shall mean the Agreement, each of the Notes and
each Security Document.
"Credit Event" shall mean the making of a Loan (other than a
Revolving Loan made pursuant to a Mandatory Borrowing) or the issuance of a
Letter of Credit.
"Credit Party" shall mean the Company, Essex and each Guarantor,
including the Parent.
8
"Currency" means U.S. Dollars or any Foreign Currency.
"Cvalim" shall mean The Israeli Cable and Wire Company Limited, a
company organized under the laws of Israel.
"Cvalim Assets" shall mean all assets used or held for use in the
conduct of the cable business of Cvalim, including: fixed assets (save land and
buildings), inventory, Cvalim's rights under contracts including certain leases
for real property, licenses and purchase orders, records, trademarks and know
how, Cvalim's prepaid items and expenses, rights deriving from approved
enterprise status (save grants received by Cvalim and recorded in its books or
rights to receive grants to the extent such amounts were due to Cvalim on or
before the closing date of such sale), customer deposits (save deposits for
products shipped by Cvalim prior to the closing date), software and hardware,
goodwill and rights to the names: "Cvalim", "Cvalim - The Wire and Cable Company
of Israel Ltd.", "D.A.S.H. Cable Industries (Israel) Ltd." and "D.A.S.H." and
any derivatives of such names and casualty insurance proceeds payable as a
result of loss or destruction of equipment; provided that Cvalim Assets shall
not include cash, short term investments, customers' receivables and debit
balances, deposits and long term receivables, investment and investee companies,
other properties and deferred expenses.
"Debenture" shall have the meaning provided in the definition of
Trust Preferred Securities.
"Default" shall mean any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to which a
Lender Default is in effect.
"Demand Date" shall have the meaning provided in Section 1.01(f) of
the Agreement.
"Destruction" has the meaning assigned to that term in each
Mortgage.
"Dividends" shall have the meaning provided in Section 8.06 of this
Exhibit E.
"Dividend Period" shall mean each four consecutive fiscal quarters
of the Company commencing with the fiscal quarter beginning after the Initial
Borrowing Date and each four fiscal periods thereafter commencing on the date
immediately following the last day of the immediately preceding Dividend Period.
"Documentation Agent" shall have the meaning provided in the first
paragraph of the Agreement.
9
"Documents" shall mean the Credit Documents and the Acquisition
Documents.
"Dollar Equivalent" means, with respect to any Borrowing denominated
in any Foreign Currency, the amount of U.S. Dollars that would be required to
purchase the amount of the Foreign Currency of such Borrowing on the date such
Borrowing is requested based upon the spot selling rate at which BTCo offers to
sell such Foreign Currency for U.S. Dollars in the London foreign exchange
market at approximately 11:00 A.M. London time for delivery two Business Days
later.
"Domestic Subsidiary" shall mean each Subsidiary of the Company
incorporated or organized in the United States or any State or territory
thereof.
"Effective Date" shall have the meaning provided in Section 12.10 of
the Agreement.
"Eligible Transferee" shall mean a commercial bank, financial
institution or other institutional "accredited investor" (as defined in
Regulation D of the Securities Act).
"End Date" shall have the meaning provided in the definition of
Interest Reduction Discount.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance, deficiency, liability or violation, investigations or
proceedings relating in any way to any violation or liability (or alleged
violation or liability) by the Parent, the Borrowers or any of their respective
Subsidiaries under any Environmental Law (hereafter "Claims") or any permit,
license or other authorization issued to the Parent, the Borrowers or any of
their respective Subsidiaries under any such law, including, without limitation,
(a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, remedial, corrective, response or other actions
or damages pursuant to any Environmental Law, and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.
"Environmental Law" shall mean any non-U.S., federal, state or local
policy, statute, law, rule, regulation, ordinance, code or rule of common law
now or hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent, decree or judgment (for purposes of this definition
(collectively, "Laws")), relating to the environment or Hazardous Materials, or
health and safety to the extent such health and safety issues arise under the
Occupational Safety and Health Act of 1970, as amended, or any such similar
Laws.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and the
rulings issued thereunder. Section
10
references to ERISA are to ERISA as in effect at the date of the Agreement and
any subsequent provisions of ERISA amendatory thereof, supplemental thereto or
substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Parent, the Company or any Subsidiary thereof
would be deemed to be a "single employer" within the meaning of Section 414(b)
or (c) of the Code or (to the extent required by operation of Title IV of ERISA
or Section 412 of the Code or Section 302 of ERISA) Section 414(m) or (o) of the
Code.
"Essex" shall mean Essex Group, Inc., a Michigan corporation.
"Essex Canada" shall mean Essex Canada Inc., a Delaware corporation.
"Essex Canadian Facility" shall mean the credit facility provided
pursuant to the Credit Agreement dated as of May 30, 1996, as amended and
restated as of March 27, 0000, xxxxxxx Xxxxx Xxxxxx and Bank of Montreal.
"Essex Capital Lease Facility" shall mean that facility available
pursuant to the Agreement and Lease dated as of April 12, 1995, as amended as of
June 1, 1997 and September 2, 1997, between Mellon Leasing Corporation and
Essex.
"Essex Credit Agreement" shall mean the credit facility provided
pursuant to the Credit Agreement dated as of October 31, 1996, as amended and
restated as of March 27, 1998, among Essex International Inc., Essex Group,
Inc., the lenders named therein and The Chase Manhattan Bank, as Administrative
Agent.
"Essex Funding" shall mean Essex Funding Inc., a Delaware
corporation.
"Essex Funding Agreement" shall mean that Loan and Security
Agreement, dated as of April 29, 1998, between Essex Funding and Three Rivers
Funding Corporation.
"Essex International" shall mean Essex International Inc., a
Delaware corporation.
"Essex Sublimit" shall have the meaning provided in Section 1.01(c)
of the Agreement.
"Euro" means the single currency of participating member states of
the European Monetary Union.
"Euro Rate" shall mean, with respect to each Interest Period for a
Eurodollar Loan or an Alternate Currency Loan, (i) the arithmetic average
(rounded to the nearest 1/16 of 1%) of the offered quotation to first-class
banks in the interbank Eurodollar or Alternate Currency market by BTCo for U.S.
dollar deposits or deposits in the Alternate Currency (depending upon the
Currency in
11
which the Loan is being made or maintained) of amounts in same day funds
generally comparable to the aggregate principal amount of the Euro Rate Loan for
which an interest rate is then being determined with maturities comparable to
the Interest Period to be applicable to such Euro Rate Loan, determined as of
10:00 A.M. (New York time) on the date which is two Business Days prior to the
commencement of such Interest Period divided (and rounded upward to the next
whole multiple of 1/16 of 1%) by (ii) a percentage equal to 100% minus the then
stated maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves) applicable to
any member bank of the Federal Reserve System in respect of Eurocurrency funding
or liabilities as defined in Regulation D (or any successor category of
liabilities under Regulation D).
"Euro Rate Loan" shall mean each Eurodollar Loan and each Alternate
Currency Loan.
"Eurodollar Loans" shall mean each Loan bearing interest at the
rates provided in Section 1.08(b) of the Agreement.
"European Monetary Union" means the European Economic and Monetary
Union as contemplated in the Treaty of Rome of March 25, 1957, as amended by the
Single Xxxxxxxx Xxx 0000 and the Maastricht Treaty (which was signed at
Maastricht on February 7, 1992 and became effective on November 1, 1993), as
amended from time to time (the "Treaty on European Union").
"Event of Default" shall have the meaning provided in Section 9 of
the Agreement.
"Excess Cash Flow" shall mean, for any fiscal year of the Company,
Consolidated EBITDA for such period minus Consolidated Interest Expense for such
period (to the extent paid in cash) minus the provision for income taxes for
such period (to the extent paid in cash) minus the amount of Capital
Expenditures made by the Company and its Subsidiaries during such period (to the
extent paid in cash) minus (plus) additions (reductions) to Consolidated Working
Capital for such period minus scheduled repayments of principal of outstanding
Indebtedness to the extent actually paid (including any voluntary payments of
principal of Indebtedness but excluding voluntary payments of Revolving Loans).
"Excess Cash Flow Percentage" shall mean 75% unless and so long as
the Pro Forma Leverage Ratio is (i) less than 3.75:1.0, in which case it shall
mean 50%.
"Excess Cash Payment Date" shall mean the date occurring 90 days
after the last day of each fiscal year of the Company (beginning with its fiscal
year ended April 30, 2000).
"Excess Cash Payment Period" shall mean with respect to the
repayment required on each Excess Cash Payment Date, the immediately preceding
fiscal year of the Company.
12
"Existing Indebtedness" shall mean Indebtedness of the Borrowers and
their respective Subsidiaries as of the Initial Borrowing Date and which is to
remain outstanding after giving effect to the Transaction and the incurrence of
Loans on such date, but excluding the Loans, all as set forth on Annex VII to
the Agreement, and other Indebtedness which in the aggregate does not exceed
$100,000.
"Existing Superior Credit Agreement" shall have the meaning provided
in the recitals to the Agreement.
"Facing Fee" shall have the meaning provided in Section 3.01(c) of
the Agreement.
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to
in, Section 3.01 of the Agreement.
"Floating Rate Facility" shall mean the $200,000,000 Senior
Subordinated Floating Rate Facility available to the Company pursuant to the
terms of that Senior Subordinated Credit Agreement dated as of the date hereof
among the Company, the guarantors named therein, the lending institutions listed
therein and Bankers Trust Company, as Administrative Agent.
"Foreign Currency" shall mean, at any time, any currency other than
U.S. Dollars.
"Foreign Currency Equivalent" shall mean, with respect to any amount
in U.S. Dollars, the amount of any Foreign Currency that could be purchased with
such amount of U.S. Dollars using the reciprocal of the foreign exchange rate(s)
specified in the definition of the term "Dollar Equivalent", as determined by
the Administrative Agent.
"Fronting Fee" shall have the meaning provided in Section 3.01(e) of
the Agreement .
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of Section 8 of
this Exhibit E and the definition of Interest Reduction Discount, including
defined terms as used therein, are subject (to the extent provided therein)
13
to Section 12.07(a) of the Agreement.
"Guaranteed Creditors" shall mean and include each of the
Administrative Agent, the Collateral Agent, the Lenders and each Letter of
Credit Issuer.
"Guaranteed Obligations" shall mean the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise) of the
principal and interest on each Note issued by the Borrowers to each Lender, and
Loans made under the Agreement and all reimbursement obligations and Unpaid
Drawings with respect to Letters of Credit, together with all the other
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities
(including, without limitation, indemnities, fees and interest thereon) of the
Borrowers or any Guarantor to such Lender, the Administrative Agent and the
Collateral Agent now existing or hereafter incurred under, arising out of or in
connection with any Credit Document and the due performance and compliance with
all the terms, conditions and agreements contained in each of the Credit
Documents by the Borrowers.
"Guarantor" shall mean (i) the Company, in respect of Obligations of
Essex hereunder, (ii) the Parent and (iii) each of the Subsidiary Guarantors.
"Guaranty" shall mean the Guaranty contained in Section 13 of the
Agreement.
"Hazardous Materials" shall mean (a) any petrochemical or petroleum
products or wastes (including crude oil or any fraction thereof), radioactive
materials, asbestos in any form that is or could become friable, urea
formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
and (b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"restricted hazardous materials," "extremely hazardous wastes," "restrictive
hazardous wastes," "toxic substances," "toxic pollutants," "contaminants" or
"pollutants," or words of similar meaning and regulatory effect under any
Environmental Law.
"Indebtedness" of any Person shall mean, without duplication, (i)
all indebtedness of such Person for borrowed money, (ii) the deferred purchase
price of assets or services payable to the sellers thereof or any of such
seller's assignees which in accordance with GAAP would be shown on the liability
side of the balance sheet of such Person but excluding deferred rent as
determined in accordance with GAAP, (iii) the face amount of all letters of
credit issued for the account of such Person and, without duplication, all
drafts drawn thereunder, (iv) all Indebtedness of a second Person secured by any
Lien on any property owned by such first Person, whether or not such
Indebtedness has been assumed; provided, however, that in the event that the
liability of such first Person is non-recourse to such Person and is recourse
only to specified assets of such Person, the amount of Indebtedness attributed
thereto shall not exceed the greater of the market value of such assets or the
14
book value of such assets, (v) all Capitalized Lease Obligations of such Person,
(vi) all obligations of such Person to pay a specified purchase price for goods
or services whether or not delivered or accepted, i.e., take-or-pay and similar
obligations, (vii) all obligations under Interest Rate Protection Agreements and
Other Hedging Agreements and (viii) all Contingent Obligations of such Person;
provided that Indebtedness shall not include trade payables and accrued
expenses, in each case arising and payable in the ordinary course of business
(so long as so paid in the ordinary course of business and consistent with past
practice) and, in the case of the Parent, shall include the Trust Preferred
Securities and any other similar securities.
"Information Systems and Equipment" shall mean all computer
hardware, firmware and software, as well as other information processing
systems, or any equipment containing embedded microchips, whether directly
owned, licensed, leased, operated or otherwise controlled by the Parent, the
Borrowers or any of their respective Subsidiaries, including through third-party
service providers, and which, in whole or in part, are used, operated, relied
upon, or integral to, the Parent's, the Borrowers' or any of their respective
Subsidiaries' conduct of their business.
"Initial Borrowing Date" shall mean the date upon which the initial
Borrowing of Loans occurs.
"Intercompany Loan" shall have the meaning provided in Section
8.05(g) of this Exhibit E.
"Intercompany Notes" shall mean promissory notes, in the form of
Exhibit J to the Agreement, evidencing an Intercompany Loan.
"Interest Coverage Ratio" shall mean, for any period, the ratio of
Consolidated EBITDA to Consolidated Interest Expense for such period.
"Interest Period," with respect to any Euro Rate Loan, shall mean
the interest period applicable thereto, as determined pursuant to Section 1.09
of the Agreement.
"Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedging agreement or other similar agreement or arrangement.
"Interest Reduction Discount" shall mean zero; provided that from
and after the first day of any Margin Reduction Period (the "Start Date") to and
including the last day of such Margin Reduction Period (the "End Date"), the
Interest Reduction Discount shall be the respective percentage per annum set
forth in clause (A), (B), (C) or (D) below if, but only if, as of the last day
of the immediately preceding fiscal quarter or fiscal year of the Company
preceding such Start Date (the "Test Date"), the applicable conditions set forth
in clause (A), (B), (C) or (D) below, as the case may be, are
15
met:
(A) .25% if, but only if, as of the Test Date immediately prior to
such Start Date the Pro Forma Leverage Ratio for the Test Period ended on
such Test Date shall be less than 4.00:1.0 and none of the conditions set
forth in clause (B), (C) or (D) below, as the case may be, are satisfied;
(B) .50% if, but only if, as of the Test Date immediately prior to
such Start Date the Pro Forma Leverage Ratio for the Test Period ended on
such Test Date shall be less than 3.50:1.0 and none of the conditions set
forth in clause (C) or (D) below, as the case may be, are satisfied;
(C) .75% if, but only if, as of the Test Date immediately prior to
such Start Date the Pro Forma Leverage Ratio for the Test Period ended on
such Test Date shall be less than 3.00:1.0 and the condition set forth in
clause (D) below is not satisfied; or
(D) 1% if, but only if, as of the Test Date immediately prior to
such Start Date the Pro Forma Leverage Ratio for the Test Period ended on
such Test Date shall be less than 2.50:1.0.
Notwithstanding anything to the contrary contained above in this
definition, (x) the Interest Reduction Discount shall not be greater than zero
prior to the first Test Date to occur after the second Test Period and (y) the
Interest Reduction Discount shall be zero at any time when a Default or an Event
of Default shall exist.
"Investments" shall have the meaning provided in Section 8.05 of
this Exhibit E .
"Israeli Subsidiaries" shall mean Superior Cable Israel Ltd., Cables
of Zion and their respective Subsidiaries.
"Judgment Currency" shall have the meaning provided in Section 12.18
of the Agreement.
"Judgment Currency Conversion Date" shall have the meaning provided
in Section 12.18 of the Agreement.
"L/C Supportable Indebtedness" shall mean (i) obligations of the
Borrowers or their respective Subsidiaries incurred in the ordinary course of
business with respect to insurance obligations and workers' compensation, surety
bonds and other similar statutory obligations and (ii) such other obligations of
the Borrowers or any of their respective Subsidiaries as are reasonably
acceptable to the Administrative Agent and the Letter of Credit Issuer and
otherwise permitted to exist pursuant to the terms of the Agreement.
16
"Lease" shall mean any lease, sublease, franchise agreement,
license, occupancy or concession agreement.
"Leasehold" of any Person shall mean all of the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Lender" shall have the meaning provided in the first paragraph of
the Agreement.
"Lender Default" shall mean (i) the failure or refusal (which has
not been retracted) of a Lender to make available its portion of any Borrowing
(including any Mandatory Borrowing) or to fund its portion of any unreimbursed
payment under Section 2.04(c) of the Agreement or (ii) a Lender having notified
the Administrative Agent and/or the Borrowers that it does not intend to comply
with its obligations under Section 1.01(a) through 1.01(d) or 2.04(c) of the
Agreement, in the case of either clause (i) or (ii) above as a result of the
appointment of a receiver or conservator with respect to such Lender at the
direction or request of any regulatory agency or authority.
"Letter of Credit" shall have the meaning provided in Section
2.01(a) of the Agreement.
"Letter of Credit Fees" shall have the meaning provided in Section
3.01(b) of the Agreement.
"Letter of Credit Issuer" shall mean BTCo.
"Letter of Credit Outstandings" shall mean, at any time, the sum of,
without duplication, (i) the aggregate Stated Amount of all outstanding Letters
of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all
Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in
Section 2.02(a) of the Agreement.
"Letter of Credit Sublimit" shall mean $25,000,000.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any similar
recording or notice statute, and any lease having substantially the same effect
as the foregoing).
"Loan" shall mean each Tranche A Term Loan, each Tranche B Term
Loan, each Revolving Loan and each Swingline Loan.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(e) of the Agreement.
17
"Margin Reduction Period" shall mean each period which shall
commence on a date on which the financial statements are delivered pursuant to
Section 7.01(b) or (c) of the Agreement, as the case may be, and which shall end
on the earlier of (i) the date of actual delivery of the next financial
statements pursuant to Section 7.01(b) or (c) of the Agreement, as the case may
be, and (ii) the latest date on which the next financial statements are required
to be delivered pursuant to Section 7.01(b) or (c) of the Agreement, as the case
may be; provided that the first Margin Reduction Period shall commence on the
date that the financial statements are delivered for the Company's first fiscal
quarter ending April 30, 1999.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean (x) a material adverse effect
on the Transaction or (y) a material adverse effect on the business, properties,
assets, nature of assets, liabilities, condition (financial or otherwise) (i) on
the Initial Borrowing Date, of the Parent and its Subsidiaries, the Company and
its Subsidiaries, or Essex and its Subsidiaries, in each case taken as a whole,
and both before and after giving effect to the Transaction and (ii) thereafter,
of the Company and its Subsidiaries (including Essex), or the Parent and its
Subsidiaries, in each case taken as a whole or (z) a material adverse effect on
the rights or remedies of the Lenders or the Administrative Agent, or on the
ability of any Credit party to perform its obligations to the Lenders or the
Administrative Agent hereunder or under any other Credit Document.
"Maturity Date" shall mean, with respect to any Tranche of Loans,
the Tranche A Term Loan Maturity Date, the Tranche B Term Loan Maturity Date,
the Revolving Loan Maturity Date or the Swingline Expiry Date, as the case may
be.
"Maximum Number" shall have the meaning provided in the recitals to
the Agreement.
"Maximum Swingline Amount" shall mean $35,000,000.
"Merger" shall mean the merger of Acquisition Co with and into Essex
International in which Essex International will be the surviving corporation and
remaining common stockholders of Essex International (other than Acquisition Co)
will receive Trust Preferred Securities and, to the extent less than the Maximum
Number of shares of common stock of Essex are accepted in the Tender Offer, any
of the Tender Offer Cash Consideration not paid.
"Merger Agreement" shall have the meaning provided in the recitals
to the Agreement.
"Mexican Subsidiaries" shall mean any Wholly-Owned Subsidiary of the
Company, Essex or any of their respective Subsidiaries organized under the laws
of Mexico to make the acquisitions and Investments contemplated by Section
8.02(s) of this Exhibit E.
"Minimum Borrowing Amount" shall mean the amounts set forth in
Section 1.02 of the
18
Agreement.
"Minimum Condition" shall have the meaning provided in the recitals
to the Agreement.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Mortgage" shall mean a revolving credit mortgage, assignment of
leases, security agreement and fixture filing, or a revolving credit deed of
trust, assignment of leases, security agreement and fixture filing creating and
evidencing a Lien on a Mortgaged Real Property, which shall be substantially in
the form of Exhibit K or L (as appropriate) to the Agreement, containing such
schedules and including such additional provisions and other deviations from
such Exhibits as shall be necessary to conform such document to applicable or
local law or as shall be customary under local law and which shall be dated the
date of delivery thereof and made by the owner of the Mortgaged Real Property
described therein for the benefit of the Collateral Agent, as mortgagee (grantee
or beneficiary), assignee and secured party, as the same may at any time be
amended, modified or supplemented in accordance with the terms thereof and
hereof.
"Mortgaged Property" shall have the meaning assigned to such term in
the Mortgages.
"Mortgaged Real Property" shall mean and include the Real Properties
owned or leased by the Borrowers and the Guarantors to the extent designated as
such on Annex IV and any additional Real Property which shall be subject to a
Mortgage delivered pursuant to Section 5.10.
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan
(as defined in Section 4001(a)(3) of ERISA).
"Net Award" has the meaning assigned to such term in each Mortgage.
"Net Cash Proceeds" shall mean, with respect to any Asset Sale, the
Cash Proceeds resulting therefrom net of (a) cash expenses of sale (including,
without limitation, brokerage fees, if any, transfer taxes and payment of
principal, premium and interest of Indebtedness other than the Loans required to
be repaid as a result of such Asset Sale), (b) all federal, state, local and
non-U.S. taxes to the extent payable as a direct consequence of any such Asset
Sale and (c) deduction of reasonable amounts, determined in accordance with
GAAP, required to be provided by either of the Borrowers or any of their
respective Subsidiaries as a reserve against any liabilities retained by the
Borrowers or any such Subsidiary associated with such assets after such Asset
Sale, including, without limitation, any indemnification, pension and other
post-employment benefit liabilities, workers compensation liabilities,
liabilities associated with retiree benefits and liabilities relating to
environmental matters, except and until such reserves are reversed, in which
case the amount of such reversal shall constitute Net Cash Proceeds.
19
"Net Proceeds" has the meaning assigned to that term in each
Mortgage.
"Non-Defaulting Lender" shall mean each Lender other than a
Defaulting Lender.
"Non-U.S. Pension Plan" shall mean any plan, fund (including,
without limitation, any superannuation fund) or other similar program
established or maintained outside the United States of America by the Parent,
the Company, Essex or any one or more of their respective Subsidiaries primarily
for the benefit of employees of the Parent, the Company, Essex or such
Subsidiaries residing outside the United States of America, which plan, fund or
other similar program provides, or results in, retirement income, a deferral of
income in contemplation of retirement or payments to be made upon termination of
employment or any such plan as to which the Parent, the Company, Essex or any of
their respective Subsidiaries may have any liability.
"Non-U.S. Subsidiary" shall mean each Subsidiary of the Company
other than a Domestic Subsidiary.
"Note" shall mean each Tranche A Term Note, each Tranche B Term
Note, each Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a) of the Agreement.
"Notice of Conversion" shall have the meaning provided in Section
1.06 of the Agreement.
"Notice Office" shall mean the office of the Administrative Agent
located at Xxx Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other
office as the Administrative Agent may designate to the Borrowers and the
Lenders from time to time.
"Obligation Currency" shall have the meaning provided in Section
12.18 of the Agreement.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Administrative Agent, the Collateral Agent or any Lender pursuant to the
terms of any Credit Document.
"Other Hedging Agreements" shall mean (x) any foreign exchange
contracts, currency swap agreements or other similar agreements or arrangements
designed to protect against fluctuations in currency values and (y) agreements
relating to the future purchase of commodities or designed to protect against
fluctuations in the prices of specific commodities.
20
"Parent" shall mean Superior TeleCom Inc., a Delaware corporation.
"Parent Common Stock" shall mean shares of common stock, $.01 par
value per share, of the Parent.
"Parent Tax Allocation Agreement" shall mean the tax allocation
agreement by and among the Parent and its Subsidiaries dated as of October 2,
1996, effective as of May 1, 1996.
"Participant" shall have the meaning provided in Section 2.04(a)(i)
of the Agreement.
"Payment Office" shall mean the office of the Administrative Agent
located at Xxx Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other
office as the Administrative Agent may designate to the Borrowers and the
Lenders from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" in the case of a Revolving Loan Lender at any time
shall mean a fraction (expressed as a percentage) the numerator of which is the
Revolving Loan Commitment of such Lender at such time and the denominator of
which is the Total Revolving Loan Commitment at such time; provided that if the
Percentage of any Lender is to be determined after the applicable Total
Revolving Loan Commitment has been terminated, then the Percentages of the
Lenders shall be determined immediately prior (and without giving effect) to
such termination.
"Permitted Acquisition" shall have the meaning provided in Section
8.02(l) of this Exhibit E.
"Permitted Liens" shall have the meaning provided in Section 8.03 of
this Exhibit E.
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, limited liability company or partnership, association, trust
or other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" shall mean any multiemployer plan or single-employer plan as
defined in Section 4001 of ERISA, which is maintained or contributed to by (or
to which there is an obligation to contribute of) the Company or Essex, any of
their respective Subsidiaries or any ERISA Affiliate and each such plan for the
five calendar year period immediately following the latest date on which the
Company or Essex, any of their respective Subsidiaries or any ERISA Affiliate
maintained, contributed to or had an obligation to contribute to such plan or
any such plan as to which the Company or Essex, any of their respective
Subsidiaries or any ERISA Affiliate may have any liability; provided, however,
the term "Plan" shall not include any Non- U.S. Pension Plan.
21
"Pledge Agreement" shall have the meaning provided in Section
5.08(a) of the Agreement and shall include any additional pledge agreement
executed by the Borrowers or any of their respective Subsidiaries pursuant to
Section 7.11 of the Agreement.
"Pledge Agreement Collateral" shall mean all "Pledged Collateral" as
defined in the Pledge Agreement.
"Pledged Securities" shall mean all the Pledged Securities as
defined in the Pledge Agreement.
"Pounds Sterling" shall mean (i) freely transferable lawful money of
the United Kingdom and (ii) in the event that the Pounds Sterling is replaced by
the Euro, Euros having a corresponding value, calculated in accordance with the
relevant provisions of the treaty on the European Union.
"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. BTCo may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Prior Liens" shall mean Liens which, pursuant to the provisions of
any Security Document, are or may be superior to the Lien of such Security
Document.
"Pro Forma Leverage Ratio" shall mean, at any time for the
determination thereof, the ratio of (x) Consolidated Debt at such time to (y)
Consolidated EBITDA for the Test Period then last ended, with such Pro Forma
Leverage Ratio to be determined on a pro forma basis (i) in the case of a
Permitted Acquisition, as if such Permitted Acquisition (and any other Permitted
Acquisition) that occurred during such Test Period (and the incurrence,
assumption and/or repayment of any Indebtedness in connection with any such
Permitted Acquisition), as the case may be, had occurred on the first day of
such Test Period (and such Indebtedness, if any, had remained outstanding (or
had not been outstanding, as the case may be) throughout such Test Period) it
being understood that in calculating the Pro Forma Leverage Ratio in connection
with each and every Permitted Acquisition, Consolidated EBITDA shall include the
results of operations of the Person or assets acquired pursuant to each such
Permitted Acquisition on a pro forma basis as if such acquisition had occurred
on the first day of the respective Test Period and (ii) in the case of the
Transaction, for the first three quarterly Test Periods for which the Pro Forma
Leverage Ratio is being tested, Consolidated EBITDA for the purpose of
determining the Pro Forma Leverage Ratio shall be calculated (x) for the first
such Test Period as the product of Consolidated EBITDA for the fiscal quarter
ending April 30, 1999 ("First Quarter EBITDA") times 4, (y) for the second such
Test Period as the sum of (1) the product of First Quarter EBITDA times 2 plus
(2) the product of the Consolidated EBITDA for the fiscal quarter ending July
31, 1999 ("Second Quarter EBITDA") times 2 and (z) for the third such Test
Period as the
22
product of (1) the sum of First Quarter EBIDTA plus Second Quarter EBITDA plus
Consolidated EBITDA for the fiscal quarter ending October 31, 1999 times (2) 1
1/3. On any date pursuant to which the Pro Forma Leverage Ratio is to be
calculated and on each date of calculation of Pro Forma Leverage Ratio, the
Company shall deliver to the Landlord a certificate of the Company's chief
financial officer setting forth in reasonable detail the pro forma calculations
required to establish the Pro Forma Leverage Ratio (with such pro forma
calculations to be made on a basis reasonably satisfactory to the Landlord and
to assume that the interest expense attributable to any Indebtedness (whether
existing or being incurred) bearing a floating interest rate shall be computed
as if the rate in effect on the date of such Permitted Acquisition (taking into
account any Interest Rate Protection Agreement applicable to such Indebtedness
if such Interest Rate Protection Agreement has a remaining term in excess of 12
months) had been the applicable rate for the entire period). For purposes of the
Pro Forma Leverage Ratio, Consolidated Debt shall not include the Trust
Preferred Securities.
"Projections" shall mean the financial projections dated November
10, 1998, which include the projected consolidated and consolidating results of
the Company and its Subsidiaries (including Essex) for at least the five fiscal
years ended after the Initial Borrowing Date.
"Quarterly Payment Date" shall mean the last Business Day of each
fiscal quarter (including the fourth fiscal quarter) of the Company.
"Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Receivables Financing Agreement" shall mean (i) the Essex Funding
Agreement and any refinancing thereof, provided that the aggregate amount
thereunder does not exceed $225,000,000 and the then outstanding principal
amount thereof is not increased and the cost and other terms of any such
replacement facility is on market terms and conditions for similar receivables
financing and/or factoring facilities at the time of such refinancing; and (ii)
a replacement accounts receivable facility: (it being understood that such
replacement facility may be in the form of a sale of receivables and Receivables
Related Assets or fractional undivided interests therein); provided that, in
each case, (x) the proceeds of such replacement facility shall not be less than
75% of the book value (or, if applicable, the fair market value) of such
receivables and Receivables Related Assets (subject to customary advance rates
and discounts), in case such replacement facility is structured as a sale, or
the loans secured thereunder, in case such facility is structured as a loan and
(y) neither the Company nor any of its Subsidiaries (other than a Receivables
Subsidiary) provides, directly or indirectly, any credit support with respect to
such facility, other than as described in clause (c)(ii) of the definition of
Receivables Subsidiary.
"Receivables Related Assets" shall mean accounts receivable and
instruments, chattel papers, obligations, general intangibles and other similar
assets, in each case, relating to receivables subject to a Receivables Financing
Agreement, including interests in merchandise or goods, the sale or
23
lease of which gave rise to such receivables, related contractual rights,
guarantees, insurance proceeds, collections, other related assets and proceeds
of all of the foregoing.
"Receivables Subsidiary" shall mean (i) Essex Funding, in the case
of a Receivables Financing Agreement that meets the condition of clause (i) of
the definition thereof, or (ii) a wholly-owned Subsidiary of the Company (a)
that is designated (as set forth below) as a "Receivables Subsidiary" by the
Board of Directors of the Company, (b) that does not engage in, and whose
charter prohibits it from engaging in, any activities other than in connection
with the Receivables Financing Agreement on the terms otherwise permitted
hereby, (c) no portion of the Indebtedness or any other obligation (contingent
or otherwise) thereof under such Receivables Financing Agreement (i) is
guaranteed by the Company or any other Subsidiary of the Company, (ii) is
recourse to or obligates the Company or any other Subsidiary of the Company in
any way other than pursuant to representations, warranties, covenants and
indemnities entered into in the ordinary course of business in connection with
such Receivables Financing Agreement or (iii) subjects any property or asset of
the Company or any other Subsidiary of the Company, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than pursuant to
representations, warranties, covenants and indemnities entered into in the
ordinary course of business in connection such a Receivables Financing
Agreement, (d) with which neither the Company nor any other Subsidiary of the
Company has any material contract, agreement, arrangement or understanding and
(e) with respect to which neither the Company nor any other Subsidiary of the
Company has any obligation to maintain or preserve such Subsidiary's financial
condition or cause such Subsidiary to achieve certain levels of operating
results. Any such designation by the Board of Directors of the Company shall be
evidenced by filing with the Administrative Agent a certified copy of the
resolutions of the Board of Directors of the Company giving effect to such
designation and a certificate of the chief financial officer of the Company or
other Authorized Officer of the Company certifying that such designation
complied with the foregoing conditions.
"Recovery Event" shall mean the receipt by either of the Borrowers
or any of their respective Subsidiaries of any cash insurance proceeds or
condemnation award payable (i) by reason of theft, loss, physical destruction or
damage or any other similar event with respect to any property or assets of
either of the Borrowers or any of their respective Subsidiaries and (ii) under
any policy of insurance required to be maintained under Section 7.03 of the
Agreement.
"Refinancings" shall have the meaning provided in the recitals to
the Agreement.
"Register" shall have the meaning provided in Section 7.12 of the
Agreement.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal
24
Reserve System as from time to time in effect and any successor to all or any
portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or any portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or any portion thereof.
"Release" means disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, escaping, emptying, seeping,
placing, pouring and the like, into or upon any land or water or air, or
otherwise entering into the environment.
"Replaced Lender" shall have the meaning provided in Section 1.13 of
the Agreement.
"Replacement Lender" shall have the meaning provided in Section 1.13
of the Agreement.
"Reportable Event" shall mean an event described in Section 4043(c)
of ERISA with respect to a Plan as to which the 30-day notice requirement has
not been waived by the PGBC by regulation.
"Required Lenders" means Non-Defaulting Lenders holding at least a
majority of the outstanding Loans (after giving effect to the Percentage of
Swingline Loans of each Non-Defaulting Revolving Loan Lender), Letter of Credit
Outstandings and Total Unutilized Revolving Loan Commitments held by
Non-Defaulting Lenders.
"Returns" shall have the meaning provided in Section 6.18 of the
Agreement.
"Revolving Loan" shall have the meaning provided in Section 1.01(c)
of the Agreement and shall include a Revolving Loan denominated in U.S. Dollars
as well as an Alternate Currency Loan.
"Revolving Loan Lender" shall have the meaning provided in Section
1.01(c) of the Agreement.
"Revolving Loan Commitment" shall mean, with respect to each Lender,
the amount set forth opposite such Lender's name in Annex I to the Agreement
directly below the column entitled "Revolving Loan Commitment," as the same may
be reduced from time to time pursuant to Section 3.02, Section 3.03, Section 9
of the Agreement and/or the definition of "Total Revolving Loan Commitment."
"Revolving Loan Maturity Date" shall mean November 27, 2004.
25
"Revolving Note" shall have the meaning provided in Section 1.05(a)
of the Agreement.
"Rollover Amount" shall have the meaning provided in Section 8.08(b)
of this Exhibit E.
"Scheduled Repayments" shall mean Tranche A Term Loan Scheduled
Repayments and Tranche B Term Loan Scheduled Repayments.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b)(ii) of the Agreement.
"Secured Creditors" shall mean the Administrative Agent, the
Collateral Agent, the Lenders and each Letter of Credit Issuer.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Security Agreement" shall have the meaning provided in Section
5.08(b) of the Agreement and shall include any additional security agreement
executed by the Borrowers or any of their respective Subsidiaries pursuant to
Section 7.11 of the Agreement.
"Security Agreement Collateral" shall mean all the "Pledged
Collateral" as defined in the Security Agreement.
"Security Documents" shall mean and include the Security Agreement,
the Pledge Agreement and each Mortgage.
"Services Agreement" shall mean the services agreement between
Alpine and the Parent, dated as of October 2, 1996, as amended May 1, 1997 and
May 1, 1998.
"S&P" shall mean Standard & Poor's Ratings Service.
"Start Date" shall have the meaning provided in the definition of
Interest Reduction Discount.
"Stated Amount" of each Letter of Credit shall mean the maximum
amount available to be drawn thereunder (regardless of whether any conditions
for drawing could then be met).
"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any
26
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by such Person
directly or indirectly through Subsidiaries and (ii) any partnership,
association, joint venture or other entity (other than a corporation) in which
such Person directly or indirectly through Subsidiaries, has more than a 50%
equity interest at the time; in the case of the Company, a Subsidiary of the
Company shall include at any time after the consummation of the Tender Offer,
Essex and its Subsidiaries.
"Subsidiary Borrower" shall mean, at any time, any Subsidiary of the
Company designated as a Subsidiary Borrower by the Company in accordance with
Section 1.15 of the Agreement that has not ceased to be a Subsidiary Borrower
pursuant to such Section.
"Subsidiary Guarantor" shall mean (i) Essex, in respect of the
Obligations of the Company hereunder and (ii) each Subsidiary of each of the
Company and Essex (other than a Non-U.S. Subsidiary except to the extent
otherwise provided in Section 8.14 of this Exhibit E) except for Essex Funding,
any Receivables Subsidiary and Essex Canada.
"Superior Preferred Stock" shall mean the 6% Cumulative Preferred
Stock, par value $1.00 per share, of Superior Telecommunications having an
aggregate liquidation preference of $20,000,000 (but shall include any Company
preferred stock issued in exchange therefor pursuant to clause (ii)(y) of
Section 8.06 of this Exhibit E).
"Superior Telecommunications" shall mean Superior Telecommunications
Inc., a Georgia corporation and Wholly-Owned Subsidiary of the Company.
"Superior Trust I" shall mean Superior Trust I, a statutory business
trust formed under the laws of the State of Delaware, the common securities of
which shall be directly or indirectly wholly owned by the Parent.
"Survey" means a survey of any Mortgaged Real Property (and all
improvements thereon): (i) prepared by a surveyor or engineer licensed to
perform surveys in the state, province or country where such Mortgaged Real
Property is located, (ii) dated (or redated) not earlier than six months prior
to the date of delivery thereof unless there shall have occurred within the six
months prior to such date of delivery any exterior construction on the site of
such Mortgaged Real Property, in which event such survey shall be dated (or
redated) after the completion of such construction or if such construction shall
not have been completed as of such date of delivery, not earlier than 20 days
prior to such date of delivery, (iii) certified by the surveyor (in a manner
reasonably acceptable to the Collateral Agent) to the Collateral Agent and the
Title Company and (iv) complying in all respects with the minimum detail
requirements of the American Land Title Association as such requirements are in
effect on the date of preparation of such survey.
"Swingline Expiry Date" shall mean the date which is five Business
Days prior to the
27
Revolving Loan Maturity Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(d)
of the Agreement.
"Swingline Note" shall have the meaning provided in Section 1.05(a)
of the Agreement.
"Syndication Agent" shall have the meaning provided in the first
paragraph of the Agreement.
"Syndication Date" shall mean that date upon which the
Administrative Agent determines (and notifies the Borrowers and the Lenders)
that the primary syndication (and resultant addition of Persons as Lenders
pursuant to Section 12.04(b) of the Agreement) has been completed.
"Taking" has the meaning assigned to such term in each Mortgage.
"Tax Allocation Agreements" shall mean any tax sharing or tax
allocation agreements entered into, or to be entered into, by the Borrowers or
any of their respective Subsidiaries.
"Taxes" shall have the meaning provided in Section 4.04 of the
Agreement.
"Tender Offer" shall have the meaning provided in the recitals to
the Agreement.
"Tender Offer Cash Consideration" shall have the meaning provided in
the recitals to the Agreement.
"Tender Offer Documents" shall mean the Offer to Purchase, the
Schedule 14D-1 filed by the Parent and Acquisition Co, the Schedule 14D-9 filed
by Essex and all amendments and exhibits thereto and related documents filed
with the SEC or distributed to the stockholders of Essex.
"Term Loan" shall mean the Tranche A Term Loan or the Tranche B Term
Loan.
"Term Loan Commitment" shall mean each Tranche A Term Loan
Commitment and each Tranche B Term Loan Commitment, with the Term Loan
Commitment of any Lender at any time to equal the sum of its Tranche A Term Loan
Commitment and Tranche B Term Loan Commitment as then in effect.
"Test Date" shall have the meaning provided in the definition of
Interest Reduction Discount.
"Test Period" shall mean four consecutive fiscal quarters of the
Company (taken as one accounting period) ended, in the case of any determination
of Interest Reduction Discount, on the last
28
day of each fiscal quarter or fiscal year of the Company and, in all other
cases, ended on the date indicated in the applicable Section hereof; provided,
with respect to the Test Periods ending prior to April 29, 2000, Consolidated
EBITDA and the Interest Coverage Ratio shall be measured in accordance with the
actual results for the period from November 1, 1998 through such last day of
such Test Period.
"Title Company" shall mean First American Title Insurance Company or
such other title insurance or abstract company as shall be designated by the
Landlord.
"Total Commitments" shall mean, at any time, the sum of the
Commitments of each of the Lenders.
"Total Consideration Amount" shall mean (with respect to any
Permitted Acquisition, or series of related Permitted Acquisitions) $50,000,000;
provided that if at least 90% of the total consideration with respect thereto
(as determined in accordance with Section 8.02(l) of this Exhibit E) is paid in
shares of Parent Common Stock, such amount shall be $[200,000,000].
"Total Revolving Loan Commitment" shall mean the sum of the then
Revolving Loan Commitments of each of the Lenders, it being understood that the
Total Revolving Loan Commitment as of the Initial Borrowing Date shall be
$225,000,000.
"Total Revolving Outstandings" shall mean, at any time, the sum of
(i) the aggregate principal amount of all Revolving Loans outstanding at such
time, (ii) the aggregate principal amount of all Swingline Loans outstanding at
such time and (iii) the aggregate amount of all Letter of Credit Outstandings at
such time.
"Total Term Loan Commitment" shall mean, at any time, the sum of the
Total Tranche A Term Loan Commitment and Total Tranche B Term Loan Commitment.
"Total Tranche A Term Loan Commitment" shall mean, at any time, the
sum of the Tranche A Term Loan Commitments of each of the Lenders.
"Total Tranche B Term Loan Commitment" shall mean, at any time, the
sum of the Tranche B Term Loan Commitments of each of the Lenders.
"Total Unutilized Revolving Loan Commitment" shall mean, at any
time, (i) the Total Revolving Loan Commitment at such time less (ii) Total
Revolving Outstandings at such time.
"Tranche" shall mean the respective facility and commitments
utilized in making Loans hereunder, with there being four separate Tranches;
i.e., Tranche A Term Loans, Tranche B Term Loans, Revolving Loans and Swingline
Loans.
29
"Tranche A Term Loan" shall have the meaning provided in Section
1.01(a) of the Agreement.
"Tranche A Term Loan Commitment" shall mean, for each Lender, the
amount set forth opposite such Lender's name in Annex I to the Agreement
directly below the column entitled "Tranche A Term Loan Commitment", as same may
be (x) reduced from time to time pursuant to Sections 3.03, 4.02 and/or 9 of the
Agreement or (y) adjusted from time to time as a result of assignments to or
from such Lender pursuant to Section 1.13 or 12.04 of the Agreement.
"Tranche A Term Loan Lender" shall have the meaning provided in
Section 1.01(a) of the Agreement.
"Tranche A Term Loan Maturity Date" shall mean May 27, 2004.
"Tranche A Term Loan Scheduled Repayment" shall have the meaning
provided in Section 4.02(b) of the Agreement.
"Tranche A Term Loan Scheduled Repayment Date" shall have the
meaning provided in Section 4.02(b) of the Agreement.
"Tranche A Term Note" shall have the meaning provided in Section
1.05(a) of the Agreement.
"Tranche B Term Loan" shall have the meaning provided in Section
1.01(b) of the Agreement.
"Tranche B Term Loan Commitment" shall mean, for each Lender, the
amount set forth opposite such Lender's name in Annex I to the Agreement hereto
directly below the column entitled "Tranche B Term Loan Commitment", as same may
be (x) reduced from time to time pursuant to Sections 3.03, 4.02 and/or 9 of the
Agreement or (y) adjusted from time to time as a result of assignments to or
from such Lender pursuant to Section 1.13 or 12.04 of the Agreement.
"Tranche B Term Loan Lender" shall have the meaning provided in
Section 1.01(b) of the Agreement.
"Tranche B Term Loan Maturity Date" shall mean November 27, 2005.
"Tranche B Term Loan Scheduled Repayment" shall have the meaning
provided in Section 4.02(c) of the Agreement.
"Tranche B Term Loan Scheduled Repayment Date" shall have the
meaning provided in
30
Section 4.02(c) of the Agreement.
"Tranche B Term Note" shall have the meaning provided in Section
1.05(a) of the Agreement.
"Transaction" shall have the meaning provided in the recitals to the
Agreement.
"Trust Preferred Securities" shall mean collectively: (i) the shares
of Series A Cumulative Convertible Exchangeable Trust Preferred Securities of
Superior Trust I having an aggregate liquidation preference of approximately
$167,000,000; (ii) the long-term, subordinated debenture issued by the Company
and purchased by Superior Trust I which, under certain circumstances, may be
distributed to the holders of the Series A Cumulative Convertible Exchangeable
Trust Preferred Securities (the "Debenture"); and (iii) shall include the
guarantee by the Company of dividend, redemption and liquidation payments as in
effect on the Initial Borrowing Date, all substantially in the form of Exhibit M
hereto, with such modifications consistent with the economic terms thereof, as
to which the Administrative Agent may agree, such agreement not to be
unreasonably withheld or delayed.
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or a Euro Rate Loan.
"UCC" shall mean the Uniform Commercial Code as in effect from time
to time in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year exceeds the fair market
value of the assets allocable thereto, each determined in accordance with
Statement of Financial Accounting Standards No. 87, based upon the actuarial
assumptions used by the Plan's actuary in the most recent annual valuation of
the Plan.
"Unpaid Drawing" shall have the meaning provided in Section 2.03(a)
of the Agreement.
"Unutilized Revolving Loan Commitment" with respect to any Revolving
Loan Lender, at any time, shall mean such Lender's Revolving Loan Commitment at
such time less the sum of (i) the aggregate outstanding principal amount of
Revolving Loans made by such Lender (plus, in the case of BTCo, the aggregate
outstanding principal amount of Swingline Loans made by BTCo) and (ii) such
Lender's Percentage of the Letter of Credit Outstandings in respect of Letters
of Credit issued under the Agreement.
"U.S. Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States of America.
31
"Wholly-Owned Domestic Subsidiary" shall mean, as to any Person, any
Wholly- Owned Subsidiary of such Person which is a Domestic Subsidiary.
"Wholly-Owned Non-U.S. Subsidiary" shall mean, as to any Person, any
Wholly- Owned Subsidiary of such Person which is a Non-U.S. Subsidiary.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying shares
and/or other nominal amounts of shares required to be held other than by such
Person under applicable law) is at the time owned by such Person and/or one or
more Wholly-Owned Subsidiaries of such Person and (ii) any partnership,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.
"Written" (whether lower or upper case) or "in writing" shall mean
any form of written communication or a communication by means of telex,
facsimile device, or telegraph or cable.
"Year 2000 Compliant" shall mean that all Information Systems and
Equipment accurately process date data (including, but not limited to,
calculating, comparing and sequencing), before, during and after the year 2000,
as well as same and multi-century dates, or between the years 1999 and 2000,
taking into account all leap years, including the fact that the year 2000 is a
leap year, and further, that when used in combination with, or interfacing with,
other Information Systems and Equipment, shall accurately accept, release and
exchange date data, and shall in all material respects continue to function in
the same manner as it performs today and shall not otherwise impair the accuracy
or functionality of Information Systems and Equipment.
SECTION 8. Negative Covenants. Each of the Borrowers and the Parent
hereby covenants and agrees that, unless the Landlord consents thereto in
writing, as of the Initial Borrowing Date and thereafter for so long as the
Agreement is in effect and until the Total Commitments have terminated, no
Letters of Credit (other than Letters of Credit, together with all Fees that
have accrued and will accrue thereon through the stated termination date of such
Letters of Credit, which have been supported in a manner satisfactory to the
Letter of Credit Issuer in its sole and absolute discretion) or Notes are
outstanding and the Loans, together with interest, Fees and all other
Obligations (other than any indemnities described in Section 12.13 which are not
then due and payable) incurred hereunder, are paid in full:
8.01. Changes in Business. The Parent, the Company and Essex and
their respective Subsidiaries will not engage in any business other than the
businesses in which the Parent, the Borrowers and their respective Subsidiaries
are engaged in as of the Initial Borrowing Date and activities incidental
thereto, and similar or related businesses.
8.02. Consolidation, Merger, Sale or Purchase of Assets, etc. The
Company will not,
32
and will not permit any of its Subsidiaries to, wind up, liquidate or dissolve
its affairs or enter into any transaction of merger or consolidation, or convey,
sell, lease or otherwise dispose of (or agree to do any of the foregoing at any
future time) all or any part of its property or assets (other than inventory in
the ordinary course of business, including sales of inventory on consignment in
the ordinary course of business), or enter into any partnerships, joint ventures
or sale-leaseback transactions, or purchase or otherwise acquire (in one or a
series of related transactions) any part of the property or assets (other than
purchases or other acquisitions of inventory, materials and equipment in the
ordinary course of business) of any Person, except that the following shall be
permitted:
(a) the Company and its Subsidiaries may, as lessee or
lessor, enter into operating leases in the ordinary course of business
with respect to real or personal property;
(b) Capital Expenditures by the Company and its Subsidiaries to the
extent not in violation of Section 8.08 of this Exhibit E;
(c) the advances, Investments and loans permitted pursuant to
Section 8.05 of this Exhibit E;
(d) the Company and its Subsidiaries may sell assets no longer used
in the business other than Mortgaged Real Property; provided that the
aggregate sale proceeds from all assets subject to such sales pursuant to
this clause (d) shall not exceed $25,000,000 in any consecutive twelve
month period of the Company (exclusive of sale proceeds in respect of
obsolete, outmoded or worn-out machinery, equipment, furniture or
fixtures) and each such asset sale subject to this clause (d) is for at
least 85% cash and at fair market value (as determined in good faith by
the Company);
(e) the Company and its Subsidiaries may sell or discount (x)
without recourse, accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or collection thereof
or (y) accounts receivable pursuant to the Receivables Financing
Agreement;
(f) without limitation to clause (d), the Company and its
Subsidiaries may sell or exchange specific items of machinery or
equipment, so long as the proceeds of each such sale or exchange is used
(or contractually committed to be used) to acquire (and results within 180
days of such sale or exchange in the acquisition of) replacement items of
machinery or equipment;
(g) the Company and its Subsidiaries may, in the ordinary course of
business, license, as licensor or licensee, patents, trademarks,
copyrights and know-how to third Persons and to one another, so long as
any such license by the Company or its Subsidiaries in its capacity as
licensor is permitted to be assigned pursuant to the Security Agreement
(to the
33
extent that a security interest in such patents, trademarks, copyrights
and know-how is granted thereunder) and does not otherwise prohibit the
granting of a Lien by the Company or any of its Subsidiaries pursuant to
the Security Agreement in the intellectual property covered by such
license;
(h) the assets of any Non-U.S. Subsidiary of the Company may be
transferred to the Company or any of its Subsidiaries, and any Non-U.S.
Subsidiary of the Company may be merged with and into, or be dissolved or
liquidated into, the Company or any of its Subsidiaries so long as the
Company or such Subsidiary is the surviving corporation of any such
merger, dissolution or liquidation and, except in the case of a transfer
by the Israeli Subsidiaries, the security interests, if any, granted to
the Collateral Agent for the benefit of the Secured Creditors pursuant to
the Security Documents in the assets so transferred shall remain in full
force and effect and perfected (to at least the same extent as in effect
immediately prior to such transfer);
(i) any Domestic Subsidiary of the Company may transfer assets to
the Company or to any other Domestic Subsidiary of the Company (other than
a Receivables Subsidiary), so long as (i) if the transferee is a
Subsidiary, such Subsidiary is a Guarantor and (ii) the security interests
granted to the Collateral Agent for the benefit of the Secured Creditors
pursuant to the Security Documents in the assets so transferred shall
remain in full force and effect and perfected (to at least the same extent
as in effect immediately prior to such transfer);
(j) any Domestic Subsidiary of the Company may merge with and into,
or be dissolved or liquidated into, the Company so long as (i) the Company
is the surviving corporation of any such merger, dissolution or
liquidation and (ii) the security interests granted to the Collateral
Agent for the benefit of the Secured Creditors pursuant to the Security
Documents in the assets of such Domestic Subsidiary shall remain in full
force and effect and perfected (to at least the same extent as in effect
immediately prior to such merger, dissolution or liquidation);
(k) any Domestic Subsidiary of the Company may merge with and into,
or be dissolved or liquidated into, any Domestic Subsidiary of the Company
so long as (i) such Domestic Subsidiary is a Guarantor and is the
surviving corporation of any such merger, dissolution or liquidation and
(ii) the security interests granted to the Collateral Agent for the
benefit of the Secured Creditors pursuant to the Security Documents in the
assets of such Domestic Subsidiary shall remain in full force and effect
and perfected (to at least the same extent as in effect immediately prior
to such merger, dissolution or liquidation);
(l) so long as no Default or Event of Default then exists or would
result therefrom (including giving pro forma effect to such acquisition
and any additional Indebtedness resulting therefrom or incurred or assumed
in connection therewith as if such acquisition had occurred and such
Indebtedness had been incurred as of the first day of the most recently
completed
34
Test Period (including any other Permitted Acquisition that occurred, and
related Indebtedness that was incurred, during such Test Period)), the
Company and its Wholly-Owned Subsidiaries may acquire assets or the
capital stock of any Person (any such acquisition permitted by this clause
(l), a "Permitted Acquisition"); provided that (i) such Person (or the
assets so acquired) was, immediately prior to such acquisition, engaged
(or used) primarily in the business permitted pursuant to Section 8.01 of
this Exhibit E, (ii) if such acquisition is structured as a stock or other
equity acquisition, then either (A) the Person so acquired becomes a
Wholly-Owned Subsidiary of the Company and, subject to Section 8.14 of
this Exhibit E, a Guarantor or (B) such Person is merged with and into the
Company or a Wholly-Owned Subsidiary of the Company that is a Guarantor
(with the Company or such Wholly-Owned Subsidiary being the surviving
corporation of such merger), and in any case, all of the provisions of
Section 8.14 of this Exhibit E have been complied with in respect of such
Person, (iii) any Liens or Indebtedness assumed or issued in connection
with such acquisition is otherwise permitted under Section 8.03 or 8.04 of
this Exhibit E, as the case may be, and (iv) after giving effect thereto,
the Unutilized Revolving Loan Commitment would be at least $55,000,000;
provided, further, that any such Permitted Acquisition (or series of
related Permitted Acquisitions) involving total consideration (including,
without limitation, any earn-out, non-compete or deferred compensation
arrangements and the value of any Company securities, but not including
any Indebtedness assumed that complies with Section 8.04(m) of this
Exhibit E) by the Company and its Wholly-Owned Subsidiaries in excess of
the Total Consideration Amount shall not be consummated without the prior
written consent of the Required Lenders; and provided, further, that the
Company shall have delivered to the Landlord a certificate of the Chief
Financial Officer of the Company showing compliance (in reasonable detail
as to pro forma calculations) with all of the provisions of this paragraph
(l);
(m) leases or subleases granted by the Company or any of its
Subsidiaries to third Persons not interfering in any material respect with
the business of the Company or any of its Subsidiaries;
(n) the Company and its Subsidiaries may, in the ordinary course of
business, sell, transfer or otherwise dispose of patents, trademarks,
copyrights and know-how which, in the reasonable judgment of the Company
or such Subsidiary, are determined to be uneconomical, negligible or
obsolete in the conduct of business;
(o) "inactive" or "shell" Subsidiaries may be dissolved or otherwise
liquidated;
(p) the Transaction and the merger of Essex with and into Superior
Telecommunications may be consummated;
(q) the purchase of the outstanding equity interests in Cables of
Zion that are not currently held by the Company and its Subsidiaries,
provided that the aggregate consideration
35
does not exceed $25,000,000;
(r) (I) the purchase of the Cvalim Assets by the Israeli
Subsidiaries for an aggregate consideration plus related working capital,
in an aggregate amount not to exceed $90,000,000, provided such
consideration is funded either (w) through investments, including by way
of guarantee, in an amount not to exceed $15,000,000, provided that such
investment is otherwise permitted by Section 8.05(p) of this Exhibit E or
(x) of the Agreement through Indebtedness incurred by the Israeli
Subsidiaries or (y) through an intercompany loan made to the Israeli
Subsidiaries by the Company, provided that (i) such intercompany loan is
secured, on terms reasonably acceptable to the Administrative Agent, with
substantially all of the assets of the Israeli Subsidiaries (subject, in
certain cases, to Liens on assets pledged or otherwise provided as
collateral to secure governmental grants and other local obligations),
including the Cvalim Assets and (ii) such secured intercompany loan is
pledged to the Administrative Agent, on behalf of the Lenders, on terms
acceptable to the Administrative Agent or (z) through a combination of
(w), (x) and (y) and (II) vendor financing provided to support the local
operations of the Israeli Subsidiaries in an amount not to exceed
$60,000,000;
(s) Investments in the Mexican Subsidiaries to fund their
development of certain manufacturing facilities in Mexico in an aggregate
amount not to exceed $80,000,000; provided that until January 31, 2001,
the amount of such Investments shall not exceed $40,000,000 in the
aggregate; and provided, further, that such amount may either be funded
(A) through Indebtedness incurred by the Mexican Subsidiaries or (B)
through intercompany loans, on terms reasonably acceptable to the
Administrative Agent, provided that (i) such intercompany loans shall be
secured, on terms reasonably acceptable to the Administrative Agent, with
all of the assets of the Mexican Subsidiaries, including those
contemplated to be built or constructed; (ii) the Mexican Subsidiaries
shall become Guarantors (it being understood that such Guaranty is subject
to the last sentence of Section 8.14 of this Exhibit E) and (iii) such
secured intercompany loans are pledged to the Administrative Agent, on
behalf of the Lenders, on terms acceptable to the Administrative Agent or
(C) up to $16,000,000 of equity or other similar contributions, or (D)
through a combination of (A), (B) and (C); and
(t) the acquisition of assets by the Israeli Subsidiaries to the
extent they are used or useful in the business of the Israeli
Subsidiaries, provided that no credit or other support is provided thereby
by the Parent, the Company or the other Subsidiaries of the Company.
To the extent the Landlord waives the provisions of this Section 8.02 of this
Exhibit E with respect to the sale or other disposition of any Collateral, or
any Collateral is sold or otherwise disposed of as permitted by this Section
8.02 of this Exhibit E, such Collateral in each case shall be sold or otherwise
disposed of free and clear of the Liens created by the Security Documents and
the Landlord shall take such actions (including, without limitation, directing
the Collateral Agent to take such actions) as are appropriate in connection
therewith.
36
8.03. Liens. The Company will not, and will not permit any Guarantor
to, create, incur, assume or suffer to exist any Lien upon or with respect to
any item constituting Collateral except for the Lien of the Security Documents
relating thereto, the Prior Liens applicable thereto and other Liens expressly
permitted by such Security Documents. The Company will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon or with respect to any property or assets of the Company or such Subsidiary
which does not constitute Collateral, whether now owned or hereafter acquired,
or sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets or assign any
right to receive income, or file or permit the filing of any financing statement
under the UCC or any other similar notice of Lien under any similar recording or
notice statute, except the following (collectively referred to as "Permitted
Liens"):
(a) inchoate Liens for taxes, assessments or governmental charges of
levies not yet due or Liens for taxes, assessments or governmental charges
or levies being contested in good faith and by appropriate proceedings for
which adequate reserves have been established in accordance with GAAP;
(b) Liens in respect of property or assets of the Company or any of
its Subsidiaries imposed by law which were incurred in the ordinary course
of business or in connection with any Capital Expenditure permitted by the
terms of the Agreement and which have not arisen to secure Indebtedness
for borrowed money, such as carriers', warehousemen's and mechanics'
Liens, statutory landlord's Liens, and other similar Liens arising in the
ordinary course of business, and which either (x) do not in the aggregate
materially detract from the value of such property or assets or materially
impair the use thereof in the operation of the business of the Company or
any of its Subsidiaries or (y) are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing
the forfeiture or sale of the property or asset subject to such Lien;
(c) Liens in existence on the Initial Borrowing Date which are
listed, and the property subject thereto described, in Annex III to the
Agreement, and extensions, renewals or related refinancings thereof,
provided that such extensions, renewals or related refinancings pursuant
to Section 8.04(g) of this Exhibit E (x) do not increase the obligations
so secured and (y) apply to additional assets not subject to the lien
being extended or renewed;
(d) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 9.09 of
the Agreement;
(e) Liens incurred or deposits made (x) in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, government
contracts, performance and return-of-money bonds and other similar
37
obligations incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money); and (y) to
secure the performance of leases of Real Property, to the extent incurred
or made in the ordinary course of business;
(f) licenses, leases or subleases granted to third Persons not
interfering in any material respect with the business of the Company or
any of its Subsidiaries;
(g) easements, zoning restrictions, rights-of-way, restrictions,
minor defects or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the ordinary
conduct of the business of the Company or any of its Subsidiaries;
(h) Liens arising from precautionary UCC financing statements
regarding operating leases permitted by the Agreement;
(i) any interest or title of a licensor, lessor or sublessor under
any license or lease permitted by the Agreement;
(j) Liens created pursuant to Capital Leases permitted pursuant to
Section 8.04(i) of this Exhibit E;
(k) Liens arising pursuant to purchase money mortgages or security
interests securing Indebtedness representing the purchase price (or
financing of the purchase price within 90 days after the respective
purchase) of assets acquired after the Initial Borrowing Date; provided
that (i) any such Liens attach only to the assets so purchased, (ii) the
Indebtedness secured by any such Lien (including refinancings thereof)
does not exceed 100% of the lesser of the fair market value or the
purchase price of the property being purchased at the time of the
incurrence of such Indebtedness and (iii) the Indebtedness secured thereby
is permitted to be incurred pursuant to Section 8.04(i) of this Exhibit E;
(l) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of the Company in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition; provided that (i) any Indebtedness that is secured by such
Liens is permitted to exist under Section 8.04(m) of this Exhibit E, and
(ii) such Liens are not incurred in connection with, or in contemplation
or anticipation of, such Permitted Acquisition and do not attach to any
other asset of the Company or any of its Subsidiaries;
(m) Liens on the receivables subject to the Receivables Financing
Agreement and Receivables Related Assets, in each case securing the
Receivables Financing Agreement;
(n) Liens set forth on Schedule 8.03(n) to the Agreement securing
Indebtedness of Essex or any of its Subsidiaries pursuant to the Essex
Capital Lease Facility;
38
(o) Liens on assets (other than the capital stock) of the Israeli
Subsidiaries to secure Indebtedness permitted under Section 8.04(n) of
this Exhibit E;
(p) Liens on assets (other than the capital stock) of Essex Canada
securing the Essex Canadian Facility and any permitted refinancing
thereof;
(q) Liens on the assets of the Mexican Subsidiaries to secure
Indebtedness permitted under Section 8.04(o) of this Exhibit E; and
(r) additional Liens (on assets other than the Collateral) incurred
by the Company and its Subsidiaries so long as the aggregate value of the
property subject to such Liens, and the Indebtedness and other obligations
secured thereby, do not exceed $15,000,000.
8.04. Indebtedness. The Company will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to the Agreement and the other
Credit Documents;
(b) the Floating Rate Facility and any extensions, refinancings,
replacements or restructurings (collectively, "refinancings") thereof;
provided that the then outstanding principal amount thereof is not
increased and the terms and conditions of such refinancings thereof are no
more adverse in any material respect to the Company or the Lenders than
with respect to the Indebtedness being so refinanced, it being understood
that a refinancing at a fixed interest rate per annum of no greater than
13% shall not be deemed more adverse;
(c) Indebtedness (together with other obligations) of Essex Funding
or any other Receivables Subsidiary incurred pursuant to the Receivables
Financing Agreement, provided that the funded amount together with any
other obligations or Indebtedness thereunder does not at any time exceed
$225,000,000;
(d) Indebtedness of Essex Canada under the Essex Canadian Facility,
and any refinancings thereof; provided that the then outstanding principal
amount thereof is not increased and the terms and conditions of such
refinancings thereof are no more adverse in any material respect to the
Company or the Lenders than with respect to the Indebtedness being so
refinanced;
(e) the Essex Capital Lease Facility, provided the principal amount
thereof at any time does not exceed $18,000,000, and any refinancings
thereof; provided that the then outstanding principal amount thereof is
not increased and the terms and conditions of such refinancings thereof
are no more adverse in any material respect to the Company or the
39
Lenders than with respect to the Indebtedness being so refinanced;
(f) letters of credit existing as of the date hereof as set forth on
Annex VII to the Agreement, and any extensions or refinancings thereof;
provided that the then outstanding face amounts thereof are not increased
and the terms and conditions of such refinancings thereof are no more
adverse in any material respect to the Company or the Lenders than with
respect to the Indebtedness being so refinanced;
(g) Existing Indebtedness outstanding on the Initial Borrowing Date
and listed on Annex VII to the Agreement, and any refinancings thereof;
provided that the then outstanding principal amount thereof is not
increased and the terms and conditions of such refinancings thereof are no
more adverse in any material respect to the Company or the Lenders than
with respect to the Indebtedness being so refinanced;
(h) Indebtedness under Interest Rate Protection Agreements and Other
Hedging Agreements permitted by Section 8.05(d) of this Exhibit E;
(i) (A) Capitalized Lease Obligations and Indebtedness of the
Company and its Subsidiaries incurred after the Initial Borrowing Date to
purchase money Liens permitted under Section 8.03(k) of this Exhibit E;
provided that (i) all such Capitalized Lease Obligations are permitted
under Section 8.08 of this Exhibit E and (ii) the sum of (x) the aggregate
Capitalized Lease Obligations outstanding at any time plus (y) the
aggregate principal amount of such purchase money Indebtedness outstanding
at such time, together, shall not exceed $20,000,000 and (B) Capital Lease
Obligations existing on the Initial Borrowing Date, as set forth on Annex
VII to the Agreement;
(j) Indebtedness constituting Intercompany Loans to the extent
permitted by Section 8.05(g) of this Exhibit E;
(k) Indebtedness of Non-U.S. Subsidiaries to the Company or any of
its Domestic Subsidiaries as a result of any investment made pursuant to
Section 8.05 of this Exhibit E;
(l) Indebtedness consisting of guaranties (x) by the Company of
Indebtedness, leases and other contractual obligations permitted to be
incurred by Subsidiaries of the Company that are Guarantors and (y) by
Non-U.S. Subsidiaries of the Company of Indebtedness, leases and other
contractual obligations permitted to be incurred by the Company and its
Subsidiaries;
(m) Indebtedness of a Subsidiary acquired as a result of a Permitted
Acquisition (or Indebtedness assumed at the time of a Permitted
Acquisition of an asset securing such Indebtedness); provided that (i)
such Indebtedness was not incurred in connection with, or in
40
anticipation or contemplation of, such Permitted Acquisition, (ii) at the
time of such Permitted Acquisition such Indebtedness does not exceed 25%
of the total then fair market value of the assets of the Subsidiary so
acquired, or of the asset so acquired, as the case may be, (iii) so long
as, before and after giving effect to such Permitted Acquisition, no
Default or Event of Default shall have occurred or would result therefrom
and (iv) such Indebtedness is not recourse to any assets of the Company or
its Subsidiaries other than the Subsidiary and assets so acquired;
(n) (A) the Indebtedness described in Section 8.02(r)(I) of this
Exhibit E and (B) other Indebtedness incurred by the Israeli Subsidiaries,
provided that no credit or other support is provided thereby by the
Parent, the Company or the other Subsidiaries of the Company;
(o) additional Indebtedness of the Mexican Subsidiaries in an amount
not to exceed and intercompany loans made to the Mexican Subsidiaries as
contemplated by and in accordance with the terms of Section 8.02(s) of
this Exhibit E to fund the development of certain manufacturing facilities
in Mexico;
(p) additional Indebtedness of the Company and its Subsidiaries not
otherwise permitted hereunder not exceeding $30,000,000 in aggregate
principal amount at any time outstanding; provided, however, that no more
than $10,000,000 of such amount may be secured Indebtedness.
8.05. Advances, Investments and Loans. The Company will not, and
will not permit any of its Subsidiaries to, lend money or credit or make
advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any Person, or purchase or own a futures contract or otherwise become liable for
the purchase or sale of currency or other commodities at a future date in the
nature of a futures contract, or hold any cash or Cash Equivalents
(collectively, "Investments"), except:
(a) the Company and its Subsidiaries may invest in or hold cash and
Cash Equivalents, provided that any Investments including cash other than
Investments denominated in U.S. Dollars shall only be made to the extent
necessary to fund local operations of the Non-U.S. Subsidiaries;
(b) the Company and its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade
terms (including the dating of receivables) of the Company or such
Subsidiary;
(c) the Company and its Subsidiaries may acquire and own Investments
(including
41
debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising
in the ordinary course of business;
(d) (x) Interest Rate Protection Agreements entered into to protect
the Company against fluctuations in interest rates in respect of the
Obligations and not for speculative purposes, (y) Other Hedging Agreements
with respect to copper and other raw materials to be used in the business
of the Company and its Subsidiaries; provided that such purchases are
entered into in the ordinary course of business and for bona fide business
(and not speculative) purposes and (z) Other Hedging Agreements with
respect to currencies in which the Company and its Subsidiaries transact
business; provided that such agreement are designed to protect against
fluctuations in currency values and are entered into the ordinary course
of business and for bona fide business (and not speculative) purposes;
(e) advances, loans and Investments in existence on the Initial
Borrowing Date and listed on Annex V to the Agreement shall be permitted,
without giving effect to any additions thereto or replacements thereof
(except those additions or replacements which are existing obligations as
of the Initial Borrowing Date but only to the extent such further
obligations are described on such Annex V to the Agreement);
(f) deposits made in the ordinary course of business to secure the
performance of leases or other contractual arrangements shall be
permitted;
(g) the Company may make intercompany loans and advances to any of
its Subsidiaries that are Guarantors (so long as they remain Guarantors)
and any Subsidiary of the Company may make intercompany loans and advances
to the Company or any other Subsidiary of the Company that is a Guarantor
(so long as it remains a Guarantor) (collectively, "Intercompany Loans");
(h) loans and advances by the Company and its Subsidiaries to
employees of the Company and its Subsidiaries for moving and travel
expenses and other similar expenses or in connection with stock purchases
in each case incurred in the ordinary course of business shall be
permitted in an aggregate principal amount not to exceed $5,000,000 at any
one time outstanding;
(i) Permitted Acquisitions shall be permitted;
(j) the Company and its Subsidiaries may acquire and hold promissory
notes and/or equity securities issued by the purchaser or purchasers in
connection with the sale of assets to the extent permitted under Section
8.02(d) of this Exhibit E;
42
(k) Non-U.S. Subsidiaries may make Investments in other Non-U.S.
Subsidiaries (other than the Israeli Subsidiaries);
(l) the Company may contribute cash to one or more of its
Subsidiaries that are or become Guarantors formed after the Initial
Borrowing Date in accordance with Section 8.14 of this Exhibit E
(including in connection with a Permitted Acquisition) so long as such
Subsidiary remains a Guarantor;
(m) the Company may make Investments in Cables of Zion as permitted
by Section 8.02(q) of this Exhibit E;
(n) the Company may make the intercompany loans to the Israeli
Subsidiaries as permitted by Sections 8.02(r)(I)(y) and 8.02(r)(II) of
this Exhibit E;
(o) the Company may make Investments in the Mexican Subsidiaries as
permitted by Section 8.02(s) of this Exhibit E; and
(p) the Company and its Subsidiaries may make new or additional cash
Investments in or to Persons (including, without limitation, the
investments contemplated by Section 8.02(r)(I)(w) of this Exhibit E) in an
amount not to exceed $25,000,000 outstanding at any one time (giving
effect to any repayments in cash, but without giving effect to any
distributions or profits thereon, write-downs or non-cash payments);
provided that, before and after giving effect to each such Investment, no
Default or Event of Default shall have occurred or result therefrom.
8.06. Dividends, etc. The Company will not, and will not permit any
of its Subsidiaries (other than the Israeli Subsidiaries) to, declare or pay any
dividends (other than dividends payable solely in common stock of the Company or
any such Subsidiary, as the case may be) or return any capital to, its
stockholders or authorize or make any other distribution, payment or delivery of
property or cash to its stockholders as such, or redeem, retire, purchase or
otherwise acquire, directly or indirectly, for any consideration, any shares of
any class of its capital stock, now or hereafter outstanding (or any warrants
for or options or stock appreciation rights (other than such options or rights
as are granted only to employees as compensation for their employment) in
respect of any of such shares), or set aside any funds for any of the foregoing
purposes, and the Company will not permit any of its Subsidiaries (other than
the Israeli Subsidiaries) to purchase or otherwise acquire for consideration any
shares of any class of the capital stock of the Company or any Subsidiary of the
Company now or hereafter outstanding (or any options or warrants or such stock
appreciation rights issued by such Person with respect to its capital stock)
(all of the foregoing "Dividends", it being understood that the payments made in
accordance with the clauses contained in the proviso of Section 8.07 of this
Exhibit E shall not be deemed to be Dividends), except that:
43
(i) any Subsidiary of the Company may pay Dividends to the Company
or any Subsidiary of the Company pro rata to the shareholders thereof;
(ii) shares of the Superior Preferred Stock and Trust Preferred
Securities may be repurchased, provided that the only consideration to be
paid in connection therewith shall be shares of (x) Parent Common Stock
and/or (y) Parent preferred stock having terms identical, in all material
respects, to the Superior Preferred Securities or the Trust Preferred
Securities (including as to dividend rate and liquidation preferences), as
the case may be, except that the issuer thereof shall be the Parent;
(iii) as long as no Default or Event of Default shall then exist or
result therefrom, regular quarterly cash dividends on the Superior
Preferred Stock and the Trust Preferred Securities in accordance with the
terms of their respective certificates of designation may be paid;
(iv) as long as no Default or Event of Default shall then exist or
result therefrom, with respect to each Dividend Period, the Company may
declare and pay a dividend on or repurchase the Company's Common Stock in
an amount not to exceed $5,700,000 plus a pro rata incremental amount to
the extent the Trust Preferred Securities have been converted into Common
Stock, based on the number of shares of Common Stock outstanding as of the
date hereof; provided that the ratio of Consolidated EBITDA of the Company
to Consolidated Fixed Charges of the Company for such Dividend Period
(determined on a pro forma basis after giving effect to such dividend)
exceeds 1.0 to 1.0, except that the amount of such dividend may exceed
$5,700,000 (but may not exceed $8,200,000) (plus the applicable
incremental pro rata amount as determined above) but only if such ratio
for such Dividend Period exceeds 1.10 to 1;
(v) so long as no Default or Event of Default shall have occurred or
be continuing or would result therefrom, Dividends paid by the Company to
the Parent not earlier than the second Business Day prior to the due date
of any scheduled Interest payment on the Debenture so long as the proceeds
thereof are actually used at the time of such dividend payment by the
Parent to pay, on the scheduled quarterly interest payment date, interest
accrued on the Debenture;
(vi) Dividends paid by the Company to the Parent so long as the
proceeds thereof are used at the time of such dividend payment by the
Parent to pay out-of-pocket expenses for administrative, legal and
accounting services provided by third parties that are reasonable and
customary and incurred in the ordinary course of business for such
professional services or to pay franchise and similar costs;
(vii) Dividends paid by the Company to the Parent so long as the
proceeds thereof
44
are used at the time of such dividend payment by the Parent to make
payments under the Services Agreement, provided, however, that such
Dividends shall not exceed $5,000,000 in any four fiscal quarter period;
and
(viii) Dividends paid by the Company to the Parent so long as the
proceeds thereof are used at the time of such dividend payment by the
Parent to pay a dividend on or repurchase the Parent Common Stock.
8.07. Transactions with Affiliates. The Company will not, and will
not permit any of its Subsidiaries to, enter into any transaction or series of
transactions with any Affiliate other than in the ordinary course of business
and on terms and conditions substantially as favorable to the Company or such
Subsidiary as would be reasonably expected to be obtainable by the Company or
such Subsidiary at the time in a comparable arm's-length transaction with a
Person other than an Affiliate; provided that the following shall in any event
be permitted: (i) the Transaction substantially in accordance with the terms of
the Documents; (ii) the performance of the Services Agreement, provided that (x)
such payments may not exceed $5,000,000 in any four fiscal quarter period and
(y) the portion of such payment for services described in Section 3(b) thereof
shall be subject to the "arm's-length" standard described in this Section 8.07;
[(iii) the (x) Parent Tax Allocation Agreement and the Company and its Domestic
Subsidiaries may make payments thereunder and (y) the Alpine Tax Allocation
Agreement and the Company and its Domestic Subsidiaries may make payments
thereunder; (iv) transactions between or among the Company and its Subsidiaries
to the extent that such transactions are otherwise specifically permitted under
the Agreement and, in the case of transactions with Subsidiaries that are not
Guarantors, such transactions are on arms-length terms and (v) on the date of
consummation of the Tender Offer, the payment of a transaction fee to Alpine in
the amount of $10,000,000.
8.08. Capital Expenditures. (a) The Company will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures during the
period set forth below in excess of the amount set forth below with respect to
such period:
($ in millions)
Period Ending Amount:
------------- ------
01/31/2000 $68.0
01/31/2001 50.1
01/31/2002 45.0
01/31/2003 50.0
01/31/2004 50.0
01/31/2005 50.0
01/31/2006 50.0
(b) In the event that the amount of Capital Expenditures permitted
to be made by the Company and its Subsidiaries pursuant to clause (a) above in
any fiscal 12-month period (before
45
giving effect to any increase in such permitted expenditure amount pursuant to
this clause (b)) is greater than the amount of such Capital Expenditures
actually made by the Company and its Subsidiaries during such fiscal year, such
excess (the "Rollover Amount") may be carried forward and utilized to make
Capital Expenditures in succeeding fiscal years; provided that in no event shall
the aggregate amount of Capital Expenditures made by the Company and its
Subsidiaries during any fiscal year pursuant to Section 8.08(a) of this Exhibit
E exceed 125% of the direct amount set forth for such fiscal year in such
Section 8.08(a) of this Exhibit E.
(c) Notwithstanding the proviso in Section 8.08(b) of this Exhibit
E, the Company and its Subsidiaries may make additional Capital Expenditures
with the Net Cash Proceeds of Asset Sales to the extent such proceeds are not
required to be applied to prepay the Loans pursuant to Section 4.02(d) of the
Agreement and such proceeds are reinvested as required by Section 4.02(d) of the
Agreement.
(d) The Company and its Subsidiaries may make additional Capital
Expenditures with the insurance proceeds received by the Company or any of its
Subsidiaries from any Taking or Destruction so long as such Capital Expenditures
are to replace or restore any properties or assets in respect of which such
proceeds were paid within one year following the date of the receipt of such
insurance proceeds to the extent such insurance proceeds are not required to be
applied to prepay the Loans pursuant to Section 4.02(g) of the Agreement.
(e) The Company and its Wholly-Owned Subsidiaries may make Permitted
Acquisitions.
(f) The Company may make the Capital Expenditures (x) contemplated
by Section 8.02(q) of this Exhibit E and (y) the Capital Expenditures as set
forth in Schedule 8.08(f) of this Exhibit E, and the amounts of such Capital
Expenditures shall not reduce the amount set forth in Section 8.08(a) of this
Exhibit E.
(g) The Israeli Subsidiaries may make additional Capital
Expenditures to the extent necessary to fund their operations, provided that no
credit or other support is provided thereby by the Parent, the Company or the
other Subsidiaries of the Company.
8.09. Minimum Consolidated EBITDA. The Company will not permit
Consolidated EBITDA during any Test Period set forth below to be less than the
amount set forth below with respect to such Test Period:
($ in millions)
Test Period Ending: Amount:
------------------ ------
01/30/1999 $ 36.0
04/30/1999 60.0
07/31/1999 130.0
46
($ in millions)
Test Period Ending: Amount:
------------------ ------
10/31/1999 180.0
01/31/2000 260.0
04/30/2000 270.0
07/31/2000 280.0
10/31/2000 290.0
01/31/2001 300.0
04/30/2001 300.0
07/31/2001 310.0
10/31/2001 320.0
01/31/2002 330.0
04/30/2002 340.0
07/31/2002 350.0
10/31/2002 355.0
01/31/2003 360.0
04/30/2003 365.0
07/31/2003 370.0
10/31/2003 375.0
01/31/2004 380.0
04/30/2004 380.0
07/31/2004 380.0
10/31/2004 380.0
01/31/2005 and the last day of 380.0
each
Fiscal Quarter thereafter
8.10. Interest Coverage Ratio. The Company will not permit the
Interest Coverage Ratio for any Test Period set forth below to be equal to or
less than the ratio set forth below with respect to such Test Period:
Test Period Ending: Ratio:
------------------ -----
04/30/1999 1.75x
07/31/1999 1.75x
10/31/1999 1.80x
01/31/2000 1.85x
04/30/2000 1.90x
07/31/2000 1.95x
10/31/2000 2.00x
01/31/2001 2.05x
04/30/2001 2.10x
47
07/31/2001 2.15x
10/31/2001 2.25x
01/31/2002 2.35x
04/30/2002 2.50x
07/31/2002 2.75x
10/31/2002 3.00x
01/31/2003 3.00x
04/30/2003 3.25x
07/31/2003 3.25x
10/31/2003 3.50x
01/31/2004 3.50x
04/30/2004 3.50x
07/31/2004 3.50x
10/31/2004 3.50x
01/31/2005 and the last day of 3.50x
each Fiscal Quarter thereafter
8.11. Leverage Ratio. The Company will not permit the Pro Forma
Leverage Ratio at any time during the Test Period set forth below to be equal to
or more than the ratio set forth below with respect to such Test Period:
Test Period Ending: Ratio:
------------------ -----
04/30/1999 5.50x
07/31/1999 5.50x
10/31/1999 5.25x
01/31/2000 5.25x
04/30/2000 5.00x
07/31/2000 5.00x
10/31/2000 4.75x
01/31/2001 4.50x
04/30/2001 4.50x
07/31/2001 4.25x
10/31/2001 4.00x
01/31/2002 4.00x
04/30/2002 3.75x
07/31/2002 3.50x
48
10/31/2002 3.25x
01/31/2003 3.25x
04/30/2003 3.00x
07/31/2003 3.00x
10/31/2003 2.75x
01/31/2004 2.75x
04/30/2004 2.75x
07/31/2004 2.75x
10/31/2004 2.75x
01/31/2005 and the last day of 2.75x
each Fiscal Quarter thereafter
8.12. Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain
Other Agreements; Issuances of Capital Stock, etc. The Company will not, and
will not permit any of its Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption or acquisition for value
of (including, without limitation, by way of depositing with the trustee
with respect thereto or any other Person money or securities before due
for the purpose of paying when due) any Superior Preferred Stock or Trust
Preferred Securities except as permitted by clause (ii) of Section 8.06 of
this Exhibit E or the Floating Rate Facility except for prepayments or
refinancings otherwise permitted hereby;
(ii) amend or modify in any manner adverse to the Company or the
Lenders, or permit such an amendment or modification of, any provision of
the Superior Preferred Stock, Trust Preferred Securities or Existing
Indebtedness, including without limitation, the Essex Funding Agreement,
the Essex Capital Lease Facility and the Essex Canadian Facility, except
that the Company may repay Indebtedness pursuant to that certain lease
agreement dated as of May 10, 1995 (the "Brownwood Lease") as amended,
between Superior Telecommunications and ALP (TX) QRS-11-28, Inc.;
(iii) amend, modify or change in any way adverse to the interests of
the Lenders, any Tax Allocation Agreement, its Certificate of
Incorporation (including, without limitation, by the filing or
modification of any certificate of designation) or By- Laws; and
(iv) issue any class of capital stock other than common stock,
provided that this clause (iv) is not applicable to the Israeli
Subsidiaries.
49
8.13. Limitation on Certain Restrictions on Subsidiaries. The
Company will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Company or any Subsidiary
of the Company, or pay any Indebtedness owed to the Company or a Subsidiary of
the Company, (b) make loans or advances to the Company or any of the Company's
Subsidiaries or (c) transfer any of its properties or assets to the Company or
any of its Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (i) applicable law, (ii) the Credit Documents, (iii)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of the Company or a Subsidiary of the Company, (iv)
customary provisions restricting assignment of any licensing agreement entered
into by the Company or a Subsidiary of the Company in the ordinary course of
business, (v) in the case of the Company and Superior Telecommunications, the
Brownwood Lease, (vi) the restrictions contained in the Essex Funding Agreement,
the Essex Capital Lease Facility and the Essex Canadian Facility, each as in
effect as of the date hereof and any refinancing thereof so long as the terms
and conditions of any such refinancings are no more adverse in any material
respect to the Company or the Lenders than with respect to the Indebtedness
being so refinanced, (vii) customary provisions restricting the transfer of or
by those assets pursuant to, and subject to other Liens permitted under Section
8.03(h), (i), (j), (k) or (l) of this Exhibit E and (viii) restrictions or
encumbrances pursuant to Indebtedness of a Subsidiary acquired pursuant to a
Permitted Acquisition (or Indebtedness assumed at the time of a Permitted
Acquisition) or an asset securing such Indebtedness, provided that such
Indebtedness was not incurred in connection with, or in anticipation or
contemplation of, such Permitted Acquisition, provided, further, such
restrictions or encumbrances apply solely to such Subsidiary or asset so
acquired.
8.14. Limitation on the Creation of Subsidiaries. Notwithstanding
anything to the contrary contained in the Agreement, the Company will not, and
will not permit any of its Subsidiaries to, establish, create or acquire any
Subsidiary; provided that the Company and its Wholly-Owned Subsidiaries shall be
permitted to establish or create Subsidiaries so long as, in each case, (i) at
least 15 days' prior written notice thereof is given to the Administrative Agent
(or such shorter period of time as is acceptable to the Administrative Agent),
(ii) unless otherwise consented to by the Administrative Agent because such
Subsidiary is a Non-U.S. Subsidiary, the capital stock of such new Subsidiary is
promptly pledged pursuant to, and to the extent required by, the Agreement and
the Pledge Agreement and the certificates, if any, representing such stock,
together with stock powers duly executed in blank, are delivered to the
Collateral Agent, (iii) unless otherwise consented to by the Administrative
Agent because such Subsidiary is (x) a Non- U.S. Subsidiary or (y) a Receivables
Subsidiary, such new Subsidiary promptly executes a Guaranty, the Pledge
Agreement and the Security Agreement, and (iv) to the extent requested by the
Administrative Agent or the Required Lenders, all actions required pursuant to
Section 7.11 are taken; provided that no such action will be required by any new
Subsidiary (that is not a Wholly-Owned Subsidiary) to the extent such new
Subsidiary is a party to a preexisting agreement which prohibits such new
Subsidiary from executing a Guaranty; provided, further, such preexisting
agreement was not entered into for the purpose of avoiding the requirements of
50
Section 8.14 and the restrictions contained therein are no more adverse to the
Company and its Subsidiaries than to the other equity owners in such new
Subsidiary. In addition, each new Subsidiary that is required to execute any
Credit Document shall execute and deliver, or cause to be executed and
delivered, all other relevant documentation of the type described in Section 5
as such new Subsidiary would have had to deliver if such new Subsidiary were a
Credit Party on the Initial Borrowing Date. The Company may request the
Administrative Agent, on behalf of the Lenders, to consent, effective after the
completion of the Company's second full fiscal year after the Initial Borrowing
Date, to the release of the Guaranty by the Mexican Subsidiaries and the
reduction of any pledged securities not to exceed 65%, which consent may not be
unreasonably withheld or delayed.
8.15. Limitation on Acquisition Co. The Company shall not permit
Acquisition Co, at any time prior to the consummation of the Merger, to engage
in any activities other than to (a) hold Margin Stock (it being understood that
Acquisition Co. may sell the outstanding common stock of Essex International for
the fair market value thereof so long as the proceeds received from such sale
are in the form of cash and/or Cash Equivalents) and (b) merge with and into
Essex International pursuant to the terms of the Merger Agreement.
8.16. Covenants of Essex. Prior to the consummation of the Merger,
Essex shall not, and shall not permit any of its Subsidiaries to, take any
action that would cause the Company to be in violation of any of the covenants
contained in Section 7 or 8 hereof.
8.17. Limitation of Activities of Parent. The Parent shall not (i)
hold or acquire any assets (other than (A) the capital stock of the Borrower and
Superior Trust I and (B) [TO COME], (ii) incur any Indebtedness (other than the
Debenture and obligations in connection with its day to day activities in the
ordinary course), or (iii) conduct any business or have any operations, other
than holding the capital stock and assets permitted by clause (i) above and
activities reasonably related thereto.
51
