UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
ESSEX INTERNATIONAL INC.
----------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.01 per share
----------------------------------------------------
(Title of Class of Securities)
297025 10 8
----------------------------------------------------
(CUSIP Number)
Steven S. Elbaum
The Alpine Group, Inc.
Superior TeleCom Inc.
Superior/Essex Corp.
SUT Acquisition Corp.
1790 Broadway
New York, New York 10019-1412
(212) 757-3333
----------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
November 27, 1998
----------------------------------------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
|_|.
<PAGE>
CUSIP No. 297025 10 8
- --------------------------------------------------------------------------------
1 Name of Reporting Person
SUT Acquisition Corp.
S.S. or I.R.S. Identification No. of Above Person
Applied For
- --------------------------------------------------------------------------------
2 Check the Appropriate Box If a Member of a Group
a. |X|
b. |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
BK
- --------------------------------------------------------------------------------
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e) |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
7 Sole Voting Power
Number of
Shares 24,864,262 shares of Common Stock
Beneficially --------------------------------------------------------
Owned By 8 Shared Voting Power
Each
Reporting 0
Person --------------------------------------------------------
With 9 Sole Dispositive Power
24,864,262 shares of Common Stock
--------------------------------------------------------
10 Shared Dispositive Power
0
--------------------------------------------------------
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
24,864,262 shares of Common Stock
- --------------------------------------------------------------------------------
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares |_|
- --------------------------------------------------------------------------------
13 Percent of Class Represented By Amount in Row (11)
89.5%
- --------------------------------------------------------------------------------
14 Type of Reporting Person
CO
- --------------------------------------------------------------------------------
SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 297025 10 8
- --------------------------------------------------------------------------------
1 Name of Reporting Person
Superior/Essex Corp.
S.S. or I.R.S. Identification No. of Above Person
Applied For
- --------------------------------------------------------------------------------
2 Check the Appropriate Box If a Member of a Group
a. |X|
b. |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
BK
- --------------------------------------------------------------------------------
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e) |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
7 Sole Voting Power
Number of
Shares 24,864,262 shares of Common Stock
Beneficially --------------------------------------------------------
Owned By 8 Shared Voting Power
Each
Reporting 0
Person --------------------------------------------------------
With 9 Sole Dispositive Power
24,864,262 shares of Common Stock
--------------------------------------------------------
10 Shared Dispositive Power
0
--------------------------------------------------------
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
24,864,262 shares of Common Stock
- --------------------------------------------------------------------------------
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares |_|
- --------------------------------------------------------------------------------
13 Percent of Class Represented By Amount in Row (11)
89.5%
- --------------------------------------------------------------------------------
14 Type of Reporting Person
HC, CO
- --------------------------------------------------------------------------------
SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 297025 10 8
- --------------------------------------------------------------------------------
1 Name of Reporting Person
Superior TeleCom Inc.
S.S. or I.R.S. Identification No. of Above Person
58-2248978
- --------------------------------------------------------------------------------
2 Check the Appropriate Box If a Member of a Group
a. |X|
b. |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
BK
- --------------------------------------------------------------------------------
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e) |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
7 Sole Voting Power
Number of
Shares 24,864,262 shares of Common Stock
Beneficially --------------------------------------------------------
Owned By 8 Shared Voting Power
Each
Reporting 0
Person --------------------------------------------------------
With 9 Sole Dispositive Power
24,864,262 shares of Common Stock
--------------------------------------------------------
10 Shared Dispositive Power
0
--------------------------------------------------------
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
24,864,262 shares of Common Stock
- --------------------------------------------------------------------------------
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares |_|
- --------------------------------------------------------------------------------
13 Percent of Class Represented By Amount in Row (11)
89.5%
- --------------------------------------------------------------------------------
14 Type of Reporting Person
HC, CO
- --------------------------------------------------------------------------------
SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 297025 10 8
- --------------------------------------------------------------------------------
1 Name of Reporting Person
The Alpine Group, Inc.
S.S. or I.R.S. Identification No. of Above Person
22-1620387
- --------------------------------------------------------------------------------
2 Check the Appropriate Box If a Member of a Group
a. |X|
b. |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
BK
- --------------------------------------------------------------------------------
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e) |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
7 Sole Voting Power
Number of
Shares 24,864,262 shares of Common Stock
Beneficially --------------------------------------------------------
Owned By 8 Shared Voting Power
Each
Reporting 0
Person --------------------------------------------------------
With 9 Sole Dispositive Power
24,864,262 shares of Common Stock
--------------------------------------------------------
10 Shared Dispositive Power
0
--------------------------------------------------------
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
24,864,262 shares of Common Stock
- --------------------------------------------------------------------------------
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares |_|
- --------------------------------------------------------------------------------
13 Percent of Class Represented By Amount in Row (11)
89.5%
- --------------------------------------------------------------------------------
14 Type of Reporting Person
HC, CO
- --------------------------------------------------------------------------------
SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Page 6 of 9 Pages
Items 2, 3, 5 and 7 of the Schedule 13D, dated October 21, 1998 (the
"Statement"), relating to the common stock, par value $0.01 per share, of Essex
International Inc. are hereby amended by adding thereto the information and
exhibits set forth below. The terms defined in the Statement shall have their
defined meanings herein, unless otherwise defined herein.
Item 2. Identity and Background
(a)-(c) and (f) Superior/Essex Corp. ("Superior/Essex") is hereby added as
a reporting person. Superior/Essex is a newly incorporated corporation organized
and existing under the laws of the State of Delaware. Superior/Essex was formed
as part of a corporate reorganization of Parent pursuant to which Superior/Essex
became the holding corporation for certain of Parent's directly held
subsidiaries in order to facilitate the financing of the Offer. Superior/Essex
has not carried on any activities other than in connection with such
reorganization and the financing of the Offer. The principal offices of
Superior/Essex are located at 1790 Broadway, New York, New York 10019.
Superior/Essex is a wholly owned subsidiary of Parent.
The directors of Superior/Essex are Steven S. Elbaum, Bragi F. Schut and
David S. Aldridge and the executive officers of Superior/Essex are Steven S.
Elbaum (Chairman of the Board, President and Chief Executive Officer), David S.
Aldridge (Treasurer) and Stewart H. Wahrsager (Secretary). The information
concerning the residence or business address, present principal occupation or
employment and the name, principal business and address of any corporation or
other organization in which such employment is conducted and citizenship of each
of the directors and executive officers of Superior/Essex is contained in
Schedule I of the Offer to Purchase and is incorporated herein by reference. The
Offer to Purchase was filed with the Statement as Exhibit 99.2.
(d) and (e) During the last five years, neither Superior/Essex nor, to the
best knowledge of Superior/Essex, any of the directors or executive officers of
Superior/Essex has been (i) convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (ii) a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting activities subject to,
federal or state securities laws or finding any violation of such laws.
Item 3. Source and Amount of Funds or Other Consideration
In connection with the Offer, on November 27, 1998, Superior/Essex, Essex
Group, Inc., a Michigan corporation and a subsidiary of the Company ("Essex
Group"), and Parent and certain subsidiaries of Parent and the Company, as
guarantors (collectively, the "Guarantors"), entered into an Amended and
Restated Credit Agreement (the "Credit Agreement") among Superior/Essex and
Essex Group, as borrowers, the Guarantors, various lenders, Merrill Lynch & Co.,
as documentation agent ("Merrill"), Fleet National Bank, as syndication agent
("Fleet"), and Bankers Trust Company, as administrative agent ("Bankers Trust").
The Credit Agreement provides for total borrowings of up to $1.15 billion. Total
borrowings of approximately $948.0 million under the Credit Agreement were used
to pay a portion of the consideration required to consummate the Offer
(including the refinancing of certain indebtedness of Parent and Essex Group)
and to pay related fees and expenses.
The Credit Agreement is comprised of two tranches of term loans and a
revolving credit facility. Interest on amounts outstanding under the Credit
Agreement is based upon either (i) the Federal Funds rate, Bankers Trust's prime
lending rate or an adjusted certificate of deposit
<PAGE>
Page 7 of 9 Pages
rate or (ii) the rate in the Eurodollar market for deposits in dollars or the
rate in the London market for deposits in Pounds Sterling plus, in each case, an
applicable margin, a variable component which, in certain circumstances, is
subject to adjustment based on the leverage ratio maintained by Superior/Essex
and its subsidiaries. The two tranches of term loans have five and one-half and
seven year terms, respectively, and the revolving credit facility has a five and
one-half year term. Each of the term loans requires periodic mandatory
amortization payments.
The obligations of each of Superior/Essex and Essex Group under the Credit
Agreement are unconditionally guaranteed by the other party and their respective
obligations are guaranteed by certain of their respective subsidiaries as well
as by Parent. The indebtedness incurred under the Credit Agreement is secured by
a first priority lien on substantially all the assets of Parent, Superior/Essex,
Essex Group and their subsidiaries.
Parent, Superior/Essex, Essex Group and certain of their respective
subsidiaries are subject to certain customary affirmative and negative covenants
under the Credit Agreement, 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, (ix) dividends and other
payments with respect to equity interests and (x) certain changes in the
business in which they are engaged.
Concurrently with the closing of the Credit Agreement, Superior/Essex also
entered into the $200,000,000 Senior Subordinated Credit Agreement (the
"Subordinated Credit Agreement") among Superior/Essex, as borrower, Parent and
certain subsidiaries of Parent (including the Company and Essex Group), as
guarantors, various lenders, Fleet, as syndication agent, and Bankers Trust, as
administrative agent. Proceeds of the Subordinated Credit Agreement were used to
finance the Offer, to refinance certain existing indebtedness of Parent and the
Company and to pay related fees and expenses.
The Subordinated Credit Agreement is a general unsecured obligation of
Superior/Essex which ranks pari passu in right of payment with all future senior
subordinated indebtedness and senior to all other subordinated indebtedness. The
Subordinated Credit Agreement is guaranteed by Parent and by certain
subsidiaries of Parent (including Essex Group) on a joint and several basis. The
Subordinated Credit Agreement matures in 2006 and is prepayable at the option of
Superior/Essex at any time after closing. Upon a change of control (as defined
in the Subordinated Credit Agreement), Superior/Essex is required to offer to
repurchase the loans under the Subordinated Credit Agreement at a purchase price
equal to 101% of the principal amount thereof, plus accrued interest thereon to
the date of repurchase. Mandatory prepayments are required from: (i) the net
proceeds from issuances of debt to the extent not required to repay senior
indebtedness (i.e., the Credit Agreement) and (ii) the net proceeds from equity
issuances with customary exceptions.
Interest on the Subordinated Credit Agreement is payable quarterly. For
the first six months after the borrowing date, interest is 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 is 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 is 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%.
<PAGE>
Page 8 of 9 Pages
The Subordinated Credit Agreement contains a cross-acceleration to the
Credit Agreement and contains covenants limiting the ability of Superior/Essex
and its subsidiaries (including the Company) 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.
The Credit Agreement and the Subordinated Credit Agreement are attached
hereto as Exhibits 99.7 and 99.8, respectively, and are incorporated herein by
reference.
Item 5. Interest in Securities of the Issuer
The Offer expired at 12:00 midnight, New York City time, on Wednesday,
November 25, 1998. On November 27, 1998, Purchaser accepted for payment, on a
pro rata basis, 22,562,135 of the Shares (representing approximately 81.2% of
the Shares represented by the Company to be outstanding as of October 20, 1998)
validly tendered in the Offer. A copy of the press release issued by Parent on
November 27, 1998 announcing the expiration of the Offer and the acceptance of
the validly tendered Shares for payment is attached hereto as Exhibit 99.9 and
is incorporated herein by reference.
Pursuant to a Stockholders Agreement, dated as of October 21, 1998 (the
"Stockholders Agreement"), among Parent, Purchaser and certain stockholders of
the Company named therein (the "Stockholders"), the Stockholders tendered
13,254,187 Shares in the Offer, which Shares were initially reported in the
Statement. As a result of proration, Purchaser accepted 82.630952%, or
10,952,060, of such Shares for payment. The remaining 2,302,127 Shares
(representing approximately 8.3% of the Shares represented by the Company to be
outstanding as of October 20, 1998) are still subject to the terms of the
Stockholders Agreement. Accordingly, the reporting persons have sole voting and
dispositive power with respect to such Shares. The Stockholders Agreement was
filed with the Statement as Exhibit 99.5.
Therefore, the reporting persons are deemed to be the beneficial owners of
an aggregate of 24,864,262 Shares, representing approximately 89.5% of the
Shares represented by the Company to be outstanding as of October 20, 1998.
Item 7. Material to Be Filed as Exhibits
99.7 Amended and Restated Credit Agreement, dated as of November 27, 1998,
among Superior/Essex Corp., Essex Group, Inc., the guarantors named
therein, various lenders, Merrill Lynch & Co., as documentation agent,
Fleet National Bank, as syndication agent, and Bankers Trust Company, as
administrative agent
99.8 Senior Subordinated Credit Agreement, dated as of November 27, 1998,
among Superior/Essex Corp., as borrower, Superior TeleCom Inc., as
Parent, the subsidiary guarantors named therein, various lenders, Fleet
Corporate Finance, Inc., as syndication agent, and Bankers Trust Company,
as administrative agent
99.9 Press release issued by Parent on November 27, 1998
99.10 Agreement as to Joint Filing of Amendment No. 1 to Schedule 13D among
Alpine, Parent, Superior/Essex and Purchaser
<PAGE>
Page 9 of 9 Pages
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: December 4, 1998
SUT ACQUISITION CORP.
By: /s/ Steven S. Elbaum
------------------------------------------
Name: Steven S. Elbaum
Title: Chairman of the Board, President
and Chief Executive Officer
SUPERIOR/ESSEX CORP.
By: /s/ Steven S. Elbaum
------------------------------------------
Name: Steven S. Elbaum
Title: Chairman of the Board, President
and Chief Executive Officer
SUPERIOR TELECOM INC.
By: /s/ Steven S. Elbaum
------------------------------------------
Name: Steven S. Elbaum
Title: Chairman of the Board, President
and Chief Executive Officer
THE ALPINE GROUP, INC.
By: /s/ Steven S. Elbaum
------------------------------------------
Name: Steven S. Elbaum
Title: Chairman of the Board and
Chief Executive Officer
<PAGE>
EXHIBIT INDEX
99.7 Amended and Restated Credit Agreement, dated as of November 27, 1998,
among Superior/Essex Corp., Essex Group, Inc., the guarantors named
therein, various lenders, Merrill Lynch & Co., as documentation agent,
Fleet National Bank, as syndication agent, and Bankers Trust Company, as
administrative agent
99.8 Senior Subordinated Credit Agreement, dated as of November 27, 1998,
among Superior/Essex Corp., as borrower, Superior TeleCom Inc., as
Parent, the subsidiary guarantors named therein, various lenders, Fleet
Corporate Finance, Inc., as syndication agent, and Bankers Trust Company,
as administrative agent
99.9 Press release issued by Parent on November 27, 1998
99.10 Agreement as to Joint Filing of Amendment No. 1 to Schedule 13D among
Alpine, Parent, Superior/Essex and Purchaser
$1,150,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
among
SUPERIOR/ESSEX CORP.,
ESSEX GROUP, INC.,
THE GUARANTORS NAMED HEREIN,
THE LENDING INSTITUTIONS LISTED HEREIN,
MERRILL LYNCH & CO., AS DOCUMENTATION AGENT,
FLEET NATIONAL BANK, AS SYNDICATION AGENT,
and
BANKERS TRUST COMPANY,
AS ADMINISTRATIVE AGENT
----------------------
Dated as of November 27, 1998
----------------------
<PAGE>
TABLE OF CONTENTS
Page
----
RECITALS..................................................................1
SECTION 1. Amount and Terms of Credit.................................3
1.01. Commitments................................................3
1.02. Minimum Amount of Each Borrowing...........................9
1.03. Notice of Borrowing........................................9
1.04. Disbursement of Funds.....................................11
1.05. Notes.....................................................12
1.06. Conversions...............................................14
1.07. Pro Rata Borrowings.......................................15
1.08. Interest..................................................15
1.09. Interest Periods..........................................17
1.10. Increased Costs, Illegality, etc..........................19
1.11. Compensation..............................................22
1.12. Change of Lending Office..................................23
1.13. Replacement of Lenders....................................23
1.14. European Monetary Union...................................24
1.15. Subsidiary Borrowers......................................26
1.16. Currency For Payments.....................................26
SECTION 2. Letters of Credit.........................................27
2.01. Letters of Credit.........................................27
2.02. Letter of Credit Requests; Notices of Issuance............29
2.03. Agreement to Repay Letter of Credit Drawings..............29
2.04. Letter of Credit Participations...........................31
2.05. Increased Costs...........................................34
SECTION 3. Fees; Commitments.........................................35
3.01. Fees......................................................35
3.02. Voluntary Termination or Reduction of Total
Unutilized Revolving Loan Commitment...................37
3.03. Mandatory Reduction of Loan Commitments...................38
SECTION 4. Payments..................................................39
4.01. Voluntary Prepayments.....................................40
4.02. Mandatory Prepayments.....................................41
4.03. Method and Place of Payment...............................48
4.04. Net Payments..............................................48
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Page
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SECTION 5. Conditions Precedent to Initial Loans.....................51
5.01. Execution of Agreement; Notes.............................51
5.02. Officer's Certificate.....................................52
5.03. Opinions of Counsel.......................................52
5.04. Corporate Proceedings.....................................52
5.05. Approvals.................................................53
5.06. Consummation of the Transaction...........................54
5.07. Essex Credit Agreement....................................55
5.08. Security Documents........................................55
5.09. Payment of Fees...........................................57
5.10. Conditions Relating to Mortgaged Real Properties..........57
5.11. Conditions Relating to Existing Mortgaged Real
Property...............................................60
5.12. Solvency Certificate; Evidence of Insurance...............62
5.13. Margin Regulations........................................63
5.14. Total Unutilized Revolving Loan Commitment................63
5.15. Notice of Borrowing; Letter of Credit Request.............63
5.16. Floating Rate Facility....................................63
5.17. Adverse Change, etc.......................................63
5.18. Proceeds of the Loans.....................................64
5.19. Creation of the Company...................................64
SECTION 5A. Conditions Precedent to All Loans.........................64
5.01A Adverse Change, etc.......................................65
5.02A Litigation................................................65
5.03A No Default; Representations and Warranties................65
SECTION 5B. Conditions Precedent to Initial Extension of Credit to a
Subsidiary Borrower....................................65
5.01B Borrowing Subsidiary Agreement............................66
5.02B Opinions..................................................66
5.03B Amendments to Other Credit Documents......................66
5.04B Other Documents...........................................66
SECTION 6. Representations, Warranties and Agreements................66
6.01. Corporate Status..........................................67
6.02. Corporate Power and Authority.............................67
6.03. No Violation..............................................68
6.04. Use of Proceeds...........................................68
6.05. Governmental Approvals....................................69
6.06. Investment Company Act; Public Utility Holding
Company Act............................................69
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Page
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6.07. True and Complete Disclosure..............................69
6.08. Financial Condition; Financial Statements.................70
6.09. Security Interests........................................72
6.10. Transaction...............................................72
6.11. Compliance with ERISA.....................................73
6.12. Subsidiaries..............................................75
6.13. Intellectual Property.....................................75
6.14. Compliance with Statutes, etc.............................76
6.15. Environmental Matters.....................................76
6.16. Properties................................................77
6.17. Labor Relations...........................................78
6.18. Tax Returns and Payments..................................78
6.19. Year 2000.................................................79
SECTION 7. Affirmative Covenants.....................................80
7.01. Information Covenants.....................................80
7.02. Books, Records and Inspections............................85
7.03. Insurance.................................................85
7.04. Payment of Taxes..........................................85
7.05. Corporate Franchises......................................86
7.06. Compliance with Statutes, etc.............................86
7.07. Compliance with Environmental Laws........................86
7.08. ERISA.....................................................87
7.09. Good Repair...............................................89
7.10. End of Fiscal Years; Fiscal Quarters......................89
7.11. Additional Security; Further Assurances...................89
7.12. Register..................................................92
7.13. Interest Rate Protection Agreements.......................93
7.14. Year 2000.................................................93
SECTION 8. Negative Covenants........................................93
8.01. Changes in Business.......................................94
8.02. Consolidation, Merger, Sale or Purchase of Assets,
etc....................................................94
8.03. Liens....................................................100
8.04. Indebtedness.............................................104
8.05. Advances, Investments and Loans..........................107
8.06. Dividends, etc...........................................110
8.07. Transactions with Affiliates.............................113
8.08. Capital Expenditures.....................................114
8.09. Minimum Consolidated EBITDA..............................115
8.10. Interest Coverage Ratio..................................116
8.11. Leverage Ratio...........................................117
8.12. Limitation on Voluntary Payments and
Modifications of Indebtedness;
Modifications of Certificate of
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<PAGE>
Page
----
Incorporation, By-Laws and Certain Other
Agreements; Issuances of Capital Stock, etc...........118
8.13. Limitation on Certain Restrictions on Subsidiaries.......119
8.14. Limitation on the Creation of Subsidiaries...............120
8.15. Limitation on Acquisition Co.............................121
8.16. Covenants of Essex.......................................121
8.17. Limitation of Activities of Parent.......................121
SECTION 9. Events of Default........................................122
9.01. Payments.................................................122
9.02. Representations, etc.....................................122
9.03. Covenants................................................122
9.04. Default Under Other Agreements...........................123
9.05. Bankruptcy, etc..........................................123
9.06. ERISA....................................................124
9.07. Security Documents.......................................125
9.08. Guarantees...............................................125
9.09. Judgments................................................125
9.10. Ownership................................................126
9.11. Merger...................................................126
SECTION 10. Definitions..............................................127
SECTION 11. The Agents...............................................164
11.01. Appointment..............................................165
11.02. Delegation of Duties.....................................165
11.03. Exculpatory Provisions...................................165
11.04. Reliance by Agents.......................................166
11.05. Notice of Default........................................167
11.06. Nonreliance on Agents and Other Lenders..................167
11.07. Indemnification..........................................168
11.08. Agents in Their Individual Capacity......................169
11.09. Holders..................................................169
11.10. Resignation of the Administrative Agent; Successor
Administrative Agent..................................170
SECTION 12. Miscellaneous............................................170
12.01. Payment of Expenses, etc.................................170
12.02. Right of Setoff..........................................171
12.03. Notices..................................................172
12.04. Benefit of Agreement.....................................172
12.05. No Waiver; Remedies Cumulative...........................175
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Page
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12.06. Payments Pro Rata........................................175
12.07. Calculations; Computations...............................176
12.08. Governing Law; Submission to Jurisdiction; Venue.........177
12.09. Counterparts.............................................178
12.10. Effectiveness............................................178
12.11. Headings Descriptive.....................................178
12.12. Amendment or Waiver, etc.................................179
12.13. Survival.................................................181
12.14. Domicile of Loans........................................181
12.15. Confidentiality..........................................181
12.16. Waiver of Jury Trial.....................................182
12.17. Margin Stock.............................................182
12.18. Judgment Currency........................................182
12.19. Determination of Dollar Equivalent.......................184
12.20. DNE Systems..............................................184
SECTION 13. Guaranty.................................................185
13.01. The Guaranty.............................................185
13.02. Nature of Liability......................................187
13.03. Independent Obligation...................................188
13.04. Authorization............................................188
13.05. Reliance.................................................190
13.06. Subordination............................................190
13.07. Waiver...................................................191
ANNEX I List of Lenders and Commitments
ANNEX II Lender Addresses
ANNEX III Existing Liens
ANNEX IV Real Properties
ANNEX V Existing Investments
ANNEX VI Subsidiaries
ANNEX VII Existing Indebtedness including Letters of Credit
ANNEX VIII Insurance
SCHEDULE 6.08 Financial Condition
SCHEDULE 6.15 Environmental Matters
SCHEDULE 6.18 Tax Returns and Payments
SCHEDULE 8.03(n) Essex Capital Lease Facility Liens
SCHEDULE 8.08(f) Capital Expenditures
EXHIBIT A-1 - Form of Notice of Borrowing
EXHIBIT A-2 - Form of Letter of Credit Request
EXHIBIT B-1 - Form of Tranche A Term Note
EXHIBIT B-2 - Form of Tranche B Term Note
EXHIBIT B-3 - Form of Revolving Note
EXHIBIT B-4 - Form of Swingline Note
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<PAGE>
EXHIBIT C - Form of Section 4.04(b)(ii) Certificate
EXHIBIT D - Form of Opinion of Company's Counsel
EXHIBIT E - Form of Officers' Certificate
EXHIBIT F - Form of Pledge Agreement
EXHIBIT G - Form of Security Agreement
EXHIBIT H - Form of Solvency Certificate
EXHIBIT I - Form of Assignment and Assumption Agreement
EXHIBIT J - Form of Intercompany Note
EXHIBIT K - Form of Mortgage
EXHIBIT L - Form of Deed of Trust
EXHIBIT M - Forms of Trust Preferred Securities Documents
EXHIBIT N - Form of Subsidiary Borrower Agreement
-vi-
<PAGE>
This AMENDED AND RESTATED CREDIT AGREEMENT, dated as of November 27,
1998 (the "Agreement"), among SUPERIOR/ESSEX CORP., a Delaware corporation (the
"Company"), ESSEX GROUP, INC., a Michigan corporation ("Essex" and, together
with the Company, the "Borrowers"), each of the Guarantors party hereto (the
"Guarantors") (which Guarantors shall include Superior TeleCom Inc., a Delaware
corporation (the "Parent")), the lending institutions from time to time party
hereto (each a "Lender" and, collectively, the "Lenders"), MERRILL LYNCH & CO.,
as Documentation Agent, FLEET NATIONAL BANK, as Syndication Agent, and BANKERS
TRUST COMPANY, as Administrative Agent (in such capacity, the "Administrative
Agent") (collectively, the "Agents"). Unless otherwise defined herein, all
capitalized terms used herein and defined in Section 10 are used herein as so
defined.
W I T N E S S E T H :
WHEREAS, the Parent and a single purpose, newly formed wholly owned
subsidiary of the Parent ("Acquisition Co") have entered into an Agreement and
Plan of Merger, dated as of October 21, 1998 (the "Merger Agreement"), with
Essex International Inc., a Delaware corporation ("Essex International"),
pursuant to which the Parent (through its ownership of the Company) will acquire
100% of the equity securities of Essex International (the "Acquisition");
WHEREAS, the Acquisition will be accomplished through (x) a tender
offer (the "Tender Offer") by Acquisition Co for no less than a majority (the
"Minimum Condition"), and no more than 22,562,135 (the "Maximum Number"), of the
shares of Essex International's outstanding common stock and (y) as promptly as
practicable after the closing of the Tender Offer, a merger (the "Merger") of
Acquisition Co with and into Essex International, with Essex International being
the surviving corporation, for aggregate consideration in the Tender Offer and
the Merger consisting of (i) not more than $781,000,000 in cash (the "Tender
Offer Cash Consideration") and (ii) shares of Series A Cumulative Convertible
Exchangeable Trust Preferred Securities of Superior Trust I having an aggregate
liquidation preference of approximately $167,000,000 (the "Trust Preferred
Securities");
WHEREAS, there exists a Revolving Credit Agreement dated as of
October 2, 1996, as the same previously may have been amended, modified or
supplemented, among the Parent, the Subsidiary Guarantors named therein, the
lending institutions listed therein, Bankers Trust Company, as Administrative
Agent,
<PAGE>
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and Bank of Boston Connecticut, as Documentation Agent (the "Existing Superior
Credit Agreement");
WHEREAS, the Parent has formed, as a wholly owned subsidiary, the
Company;
WHEREAS, in connection with and at the closing of the Tender Offer
(i) the Parent intends to amend and restate the Existing Superior Credit
Agreement and (ii) Essex, a wholly owned subsidiary of Essex International,
intends to refinance (the "Refinancings" and, together with the Tender Offer,
the "Transaction") all obligations (not to exceed $280,000,000) outstanding
under the Essex Credit Agreement;
WHEREAS, in order to consummate in full the Transaction and to pay
the fees and expenses incurred in connection therewith, and to provide for the
ongoing working capital requirements of the Borrowers, the Borrowers will need
to incur Loans (as hereinafter defined) from the Lenders in an aggregate amount
not to exceed $1,150,000,000;
WHEREAS, the parties hereto wish to amend the Existing Superior
Credit Agreement to add each of the Company and Essex as a borrower thereunder,
to have the Company assume all the obligations of the Parent thereunder, to give
effect to the Transaction and to make other mutually satisfactory changes in the
terms of the Existing Superior Credit Agreement;
WHEREAS, contemporaneously with the funding of the Loans hereunder
on the Initial Borrowing Date (as hereinafter defined), each of the consummation
of the Tender Offer and the Refinancings will take place;
WHEREAS, subject to and upon the terms and conditions set forth
herein, the Existing Superior Credit Agreement will be automatically amended and
restated to read in full as set forth herein;
WHEREAS, subject to and upon the terms and conditions set forth
herein, the Lenders are willing to make Loans to the Borrowers and issue Letters
of Credit (as hereinafter defined) for the purposes described herein;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein, each of the Parent, the Borrowers, the
Guarantors, the Lenders, the Documentation Agent, the Syndication Agent and the
Administrative Agent hereby agrees as follows:
<PAGE>
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SECTION 1. Amount and Terms of Credit.
1.01. Commitments. (a) Subject to and upon the terms and conditions
set forth herein, each Lender with a Tranche A Term Loan Commitment (a "Tranche
A Term Loan Lender") severally agrees to make on the Initial Borrowing Date a
term loan (each such term loan, a "Tranche A Term Loan" and, collectively, the
"Tranche A Term Loans"), which Tranche A Term Loans shall be in an aggregate
amount of $350,000,000 to the Company and $150,000,000 to Essex and (i) shall be
made and initially maintained as a single Borrowing of Base Rate Loans or
Eurodollar Loans (subject to the option to convert such Tranche A Term Loans
pursuant to Section 1.06); provided that, except as otherwise specifically
provided in Section 1.10(b), all Tranche A Term Loans comprising the same
Borrowing shall at all times be of the same Type, (ii) shall equal for each
Lender, in initial aggregate principal amount, an amount which equals the
Tranche A Term Loan Commitment of such Lender on the Initial Borrowing Date
(before giving effect to any reductions thereto on such date pursuant to Section
3.03(c)), and (iii) shall be denominated in U.S. Dollars. Once repaid, Tranche A
Term Loans incurred hereunder may not be reborrowed. Effective automatically
upon consummation of the Merger, without any further action by any Credit Party,
the Company shall assume all Obligations incurred by Essex or any of its
Subsidiaries under the Tranche A Term Loans.
(b) Subject to and upon the terms and conditions set forth herein,
each Lender with a Tranche B Term Loan Commitment (a "Tranche B Term Loan
Lender") severally agrees to make on the Initial Borrowing Date a term loan
(each such term loan, a "Tranche B Term Loan" and, collectively, the "Tranche B
Term Loans"), which Tranche B Term Loans shall be in an aggregate amount of
$300,000,000 to the Company and $125,000,000 to Essex and (i) shall be made and
initially maintained as a single Borrowing of Base Rate Loans or Eurodollar
Loans (subject to the option to convert such Tranche B Term Loans pursuant to
Section 1.06); provided that, except as otherwise specifically provided in
Section 1.10(b), all Tranche B Term Loans comprising the same Borrowing shall at
all times be of the same Type, (ii) shall equal for each Lender, in initial
aggregate principal amount, an amount which equals the Tranche B Term Loan
Commitment of such Lender on the Initial Borrowing Date (before giving effect to
any reductions thereto on such date pursuant to Section 3.03(d)), and (iii)
shall be denominated in U.S. Dollars. Once repaid, Tranche B Term Loans incurred
hereunder may not be reborrowed. Effective automatically upon consummation of
the Merger, without any further action by any Credit
<PAGE>
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Party, the Company shall assume all Obligations incurred by Essex or any of its
Subsidiaries under the Tranche B Term Loans.
(c) Subject to and upon the terms and conditions set forth herein,
each Lender with a Revolving Loan Commitment (a "Revolving Loan Lender")
severally agrees to make at any time and from time to time on and after the
Initial Borrowing Date and prior to the Revolving Loan Maturity Date a revolving
loan or loans (each such revolving loan, a "Revolving Loan" and, collectively,
the "Revolving Loans") to the Company or Essex, as the case may be, which
Revolving Loans (including Alternate Currency Loans (as hereinafter defined)):
(i) shall be denominated in U.S. Dollars (except that an amount up to the Dollar
Equivalent of $25,000,000 (the "Alternate Currency Loan Sublimit") shall be
available in Alternate Currency as set forth in Section 1.01(f) below (the
"Alternate Currency Loans"), which such Loans, notwithstanding any other
provision of this Agreement, shall be Euro Rate Loans), (ii) except as
hereinafter provided, shall, at the option of the applicable Borrower, be
incurred and maintained as and/or converted into Base Rate Loans or Euro Rate
Loans (subject to the proviso to Section 1.09); provided that all Revolving
Loans made as part of the same Borrowing shall, unless otherwise specifically
provided herein, consist of Revolving Loans of the same Type, (iii) may be
repaid and reborrowed in accordance with the provisions hereof and (iv) shall
not exceed for any Revolving Loan Lender at any time outstanding that aggregate
principal amount which, when combined with such Revolving Loan Lender's
Percentage of the Swingline Loans then outstanding and the Letter of Credit
Outstandings (exclusive of Unpaid Drawings relating to Letters of Credit which
are repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Revolving Loans) and, without duplication, such
Lender's Percentage of the Alternate Currency Loans then outstanding at such
time, equals the Revolving Loan Commitment of such Lender at such time;
provided, however that no Revolving Loans (including Alternate Currency Loans)
shall be made to Essex (A) if the principal amount thereof, when added to the
aggregate principal amount of all other outstanding Revolving Loans to Essex
would exceed $50,000,000 (the "Essex Sublimit") or (B) after the consummation of
the Merger. Effective automatically upon consummation of the Merger, without any
further action by any Credit Party, the Company shall assume all Obligations
incurred by Essex or any of its Subsidiaries under the Revolving Loans.
(d) Subject to and upon the terms and conditions herein set forth,
BTCo in its individual capacity agrees to
<PAGE>
-5-
make at any time and from time to time on and after the Initial Borrowing Date
and prior to the Swingline Expiry Date, a loan or loans to either Borrower (each
a "Swingline Loan" and, collectively, the "Swingline Loans"), which Swingline
Loans (i) shall be made and maintained as Base Rate Loans, (ii) shall be
denominated in U.S. Dollars, (iii) may be repaid and reborrowed in accordance
with the provisions hereof, (iv) shall not exceed in aggregate principal amount
at any time outstanding, when combined with the aggregate principal amount of
all Revolving Loans then outstanding (including Alternate Currency Loans then
outstanding) and the Letter of Credit Outstandings (exclusive of Unpaid Drawings
relating to Letters of Credit which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans) at such time, an amount equal to the Total Revolving Loan Commitment then
in effect and (v) shall not exceed in aggregate principal amount at any time
outstanding the Maximum Swingline Amount. BTCo shall not be obligated to make
any Swingline Loans at a time when a Lender Default exists unless BTCo has
entered into arrangements satisfactory to it and the Company to eliminate BTCo's
risk with respect to the Defaulting Lender's or Lenders' participation in such
Swingline Loans, including by cash collateralizing such Defaulting Lender's or
Lenders' Percentage of the outstanding Swingline Loans. BTCo will not make a
Swingline Loan after it has received written notice from either Borrower or the
Required Lenders stating that a Default or an Event of Default exists until such
time as BTCo shall have received a written notice of (i) rescission of such
notice from the party or parties originally delivering the same or (ii) a waiver
of such Default or Event of Default from the Required Lenders. After the
consummation of the Merger, no Swingline Loan shall be made to Essex.
(e) On any Business Day, BTCo may, in its sole discretion, give
notice to the Lenders and the Borrowers that its outstanding Swingline Loans
shall be funded with a Borrowing of Revolving Loans (provided that each such
notice shall be deemed to have been automatically given upon the occurrence of a
Default or an Event of Default under Section 9.05 or upon the exercise of any of
the remedies provided in the last paragraph of Section 9), in which case a
Borrowing of Revolving Loans constituting Base Rate Loans (each such Borrowing,
a "Mandatory Borrowing") shall be made on the immediately succeeding Business
Day by all Lenders pro rata based on each Lender's Percentage, and the proceeds
thereof shall be applied directly to repay BTCo for such outstanding Swingline
Loans. Each Lender hereby irrevocably agrees to make Base Rate Loans upon one
Business Day's notice pursuant to each Mandatory Borrowing in
<PAGE>
-6-
the amount and in the manner specified in the preceding sentence and on the date
specified in writing by BTCo notwithstanding (i) that the amount of the
Mandatory Borrowing may not comply with the Minimum Borrowing Amount otherwise
required hereunder, (ii) whether any conditions specified in Section 5 are then
satisfied, (iii) whether a Default or an Event of Default has occurred and is
continuing, (iv) the date of such Mandatory Borrowing and (v) any reduction in
the Total Revolving Loan Commitment after any such Swingline Loans were made. In
the event that any Mandatory Borrowing cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code in respect of the
Company), each Lender (other than BTCo) hereby agrees that it shall forthwith
purchase from BTCo (without recourse or warranty) such assignment of the
outstanding Swingline Loans as shall be necessary to cause the Lenders to share
in such Swingline Loans ratably based upon their respective Percentages;
provided that all interest payable on the Swingline Loans shall be for the
account of BTCo until the date the respective assignments is purchased and, to
the extent attributable to the purchased assignment, shall be payable to the
Lender purchasing same from and after such date of purchase.
(f) (i) Subject to and upon the terms and conditions herein set
forth, the Alternate Currency Lender (x) agrees to make at any time and from
time to time on and after the Initial Borrowing Date and prior to the Revolving
Loan Maturity Date, Alternate Currency Loans to the Company or the applicable
Subsidiary Borrower, as the case may be; provided, that the Dollar Equivalent of
the aggregate outstanding principal amount of all Alternate Currency Loans shall
not, on any date, exceed the Alternate Currency Loan Sublimit and (y)
irrevocably agrees to grant and hereby grants to each Revolving Loan Lender,
and, to induce the Alternate Currency Lender to make Alternate Currency Loans
hereunder, each such Revolving Loan Lender irrevocably agrees to accept and
purchase and hereby accepts and purchases from the Alternate Currency Lender, on
the terms and conditions hereinafter stated, for such Revolving Loan Lender's
own account and risk an undivided interest equal to such Revolving Loan Lender's
Percentage in the Alternate Currency Lender's obligations and rights in respect
to each Alternate Currency Loan made by the Alternate Currency Lender hereunder.
Each such Revolving Loan Lender unconditionally and irrevocably agrees with the
Alternate Currency Lender that, if any amount in respect of the principal,
interest or fees owing to the Alternate Currency Lender in respect of an
Alternate Currency Loan is not paid when due in accordance with the terms of
this Agreement
<PAGE>
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(collectively "Alternate Currency Overdue Amounts"), such Revolving Loan Lender
shall pay to the Alternate Currency Lender (through the Administrative Agent)
upon demand (the "Demand Date") an amount in U.S. Dollars equal to such
Revolving Loan Lender's Percentage of the Dollar Equivalent (determined pursuant
to Section 12.19) of such Alternate Currency Overdue Amounts; provided, that, in
the case of interest and fees, the Demand Date shall not occur prior to the date
that is four days after such amount became overdue. The purchase of
participations in any Alternate Currency Overdue Amount pursuant to this clause
shall not relieve the Company or the applicable Subsidiary Borrower, as the case
may be, of any default in the payment thereof, and the Company's or such
Subsidiary Borrower's repayment obligation in respect of any Alternate Currency
Overdue Amount shall automatically be converted into U.S. Dollars pursuant to
Section 12.19. The Company or the applicable Subsidiary Borrower, as the case
may be, shall be obligated to pay interest in respect of all Alternate Currency
Overdue Amounts, at the rate specified in Section 1.08, which interest (I) until
the Demand Date, shall be paid to the Alternate Currency Lender, and (II) from
and after the Demand Date, shall be paid to the Administrative Agent (at the
Payment Office of the Administrative Agent) for the benefit of the Alternate
Currency Lender and the other Revolving Loan Lenders that have purchased
participations as provided above. If any amount required to be paid by any
Revolving Loan Lender to the Alternate Currency Lender pursuant to this clause
is not paid to the Alternate Currency Lender when due, such Revolving Loan
Lender shall pay interest on such amount to the Alternate Currency Lender on
demand computed at a rate per annum equal to the Federal Funds Rate then in
effect, calculated on the basis of a 360 day year. A certificate of the
Alternate Currency Lender submitted to any Revolving Loan Lender with respect to
any amounts owing under this clause shall be conclusive in the absence of
manifest error. Each Revolving Loan Lender's obligation to make the payment
referred to in this clause shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (A) any set-off,
counterclaim, recoupment, defense or other right which any Revolving Loan Lender
or the Company or the applicable Subsidiary Borrower, as the case may be, may
have against the Alternate Currency Lender, the Company or the applicable
Subsidiary Borrower, as the case may be, or any other Person for any reason
whatsoever, (B) the occurrence or continuance of a Default or an Event of
Default, (C) any adverse change in the condition (financial or otherwise) of the
Company or any of its Subsidiaries, (D) any breach of this Agreement or any
other Credit Document by any Credit Party or any other Lender or (E) any other
circumstance, hap-
<PAGE>
-8-
pening or event whatsoever, whether or not similar to any of the foregoing.
Whenever, at any time after the Alternate Currency Lender has received from any
Revolving Loan Lender the full amount owing by such Revolving Loan Lender
pursuant to and in accordance with this clause in respect of any Alternate
Currency Loan, the Alternate Currency Lender receives any payment related to
such Alternate Currency Loan (whether directly from the Company or the
applicable Subsidiary Borrower, as the case may be, or otherwise, including
proceeds of collateral applied thereto by the Alternate Currency Lender), or any
payment of interest on account thereof, the Alternate Currency Lender will
promptly distribute to such Revolving Loan Lender its pro rata share thereof;
provided, however, that if any such payment received by the Alternate Currency
Lender pursuant to this sentence with respect to any Alternate Currency Loan
made by it shall be required to be returned by the Alternate Currency Lender,
each Revolving Loan Lender shall pay to the Alternate Currency Lender its pro
rata share thereof.
(ii) The Company or the applicable Subsidiary Borrower, as the case
may be, shall pay interest in respect of each Alternate Currency Loan in
accordance with Section 1.08(b), apportioned as follows: (a) the Alternate
Currency Loan Lender shall receive, in addition to the fee provided for in
Section 3.01(e), the amount of the Euro Rate applicable to such Alternate
Currency Loan and (b) the Revolving Loan Lenders shall receive, pro rata in
accordance with their respective Percentages, the Applicable Euro Rate Margin
applicable to such Alternate Currency Loan.
1.02. Minimum Amount of Each Borrowing. The aggregate principal
amount of each Borrowing of any Tranche of Term Loans shall not be less than
$5,000,000 and, if greater, shall be in an integral multiple of $500,000. The
aggregate principal amount of each Borrowing of Revolving Loans shall not be
less than (x) in the case of a Revolving Loan denominated in U.S. Dollars,
$1,000,000 and, if greater, shall be in an integral multiple of $100,000, except
that no minimum borrowing amount shall be applicable to any Revolving Loan
requested by the Company which will be used to repay a Swingline Loan and (y) in
the case of an Alternate Currency Loan, the Foreign Currency Equivalent of
$1,000,000 and, if greater, shall be in an integral multiple of $100,000
(rounded downwards to the nearest 1,000 units of such Alternate Currency). More
than one Borrowing may be incurred on any day; provided that at no time shall
there be outstanding more than three Borrowings of Euro Rate Loans. The
principal amount of each Borrowing of Swingline
<PAGE>
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Loans shall not be less than $500,000 and, if greater, shall be in an integral
multiple of $100,000.
1.03. Notice of Borrowing. (a) Whenever either Borrower desires to
make a Borrowing hereunder (excluding Borrowings of Revolving Loans and
Swingline Loans incurred pursuant to Mandatory Borrowings), it shall give the
Administrative Agent, at its Notice Office, (x) in the case of a Revolving Loan
denominated in U.S. Dollars, prior to 10:00 A.M. (New York time), at least three
Business Days' prior written notice (or telephonic notice promptly confirmed in
writing) of each Borrowing of Eurodollar Loans and at least one Business Day's
prior written notice (or telephonic notice promptly confirmed in writing) of
each Borrowing of Base Rate Loans to be made hereunder and (y) in the case of an
Alternate Currency Loan, prior to 10:00 A.M. (London time), at least three
Business Days' prior written notice (or telephonic notice promptly confirmed in
writing) of each such Borrowing to be made hereunder. Each such notice (each a
"Notice of Borrowing") shall, except as provided in Section 1.10, be
irrevocable, and, in the case of each written notice and each confirmation of
telephonic notice, shall be in the form of Exhibit A-1, appropriately completed
to specify (i) the aggregate principal amount of the Loans to be made pursuant
to such Borrowing, (ii) the date of such Borrowing (which shall be a Business
Day), (iii) whether the Loans being made pursuant to such Borrowing shall
constitute Term Loans or Revolving Loans (and, if Revolving Loans, the requested
Currency) and (iv) whether the respective Borrowing shall consist of Base Rate
Loans or, to the extent permitted hereunder, Euro Rate Loans and, if Euro Rate
Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall promptly give each Lender written notice (or
telephonic notice promptly confirmed in writing) of each proposed Borrowing, of
such Lender's proportionate share thereof and of the other matters covered by
the Notice of Borrowing.
(b) (i) Whenever the Company desires to incur Swingline Loans
hereunder, it shall give BTCo not later than 2:00 P.M. (New York time) on the
day such Swingline Loan is to be made, written notice (or telephonic notice
promptly confirmed in writing) of each Swingline Loan to be made hereunder. Each
such notice shall be irrevocable and shall specify in each case (x) the date of
such Borrowing (which shall be a Business Day) and (y) the aggregate principal
amount of the Swingline Loan to be made pursuant to such Borrowing.
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(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(e), with the Company irrevocably agreeing, by its incurrence of any
Swingline Loan, to the making of Mandatory Borrowings as set forth in such
Section 1.01(e).
(c) Without in any way limiting the obligation of the applicable
Borrower to confirm in writing any telephonic notice permitted to be given
hereunder, the Administrative Agent or BTCo (in the case of a Borrowing of
Swingline Loans) or the Letter of Credit Issuer (in the case of the issuance of
Letters of Credit), as the case may be, may prior to receipt of written
confirmation act without liability upon the basis of such telephonic notice,
believed by the Administrative Agent, BTCo or the Letter of Credit Issuer, as
the case may be, in good faith to be from an Authorized Officer of the
applicable Borrower. The Administrative Agent's, BTCo's or the Letter of Credit
Issuer's record of the terms of such telephonic notice shall be final,
conclusive and binding absent manifest error.
1.04. Disbursement of Funds. (a) Subject to the satisfaction of the
conditions set forth in Sections 5, 5A and 5B, as applicable, not later than
1:00 P.M. (New York time) on the date specified in each Notice of Borrowing (or
(x) in the case of Swingline Loans, not later than 4:00 P.M. (New York time) on
the date specified in Section 1.03(b)(i) or (y) in the case of Mandatory
Borrowings, not later than 12:00 Noon (New York time) on the date specified in
Section 1.01(e)), each Lender will make available its pro rata share, if any, of
each Borrowing requested to be made on such date (or in the case of Swingline
Loans, BTCo shall make available the full amount thereof) in the manner provided
below. All amounts shall be made available to the Administrative Agent in U.S.
Dollars (or, in the case of Alternate Currency Loans, in Alternate Currency) and
in immediately available funds at the Payment Office and the Administrative
Agent promptly will make available to the applicable Borrower by depositing to
its account at the Payment Office the aggregate of the amounts so made available
in the type of funds received. Unless the Administrative Agent shall have been
notified by any Lender prior to the date of Borrowing that such Lender does not
intend to make available to the Administrative Agent its portion of the
Borrowing or Borrowings to be made on such date, the Administrative Agent may
assume that such Lender has made such amount available to the Administrative
Agent on such date of Borrowing, and the Administrative Agent, in reliance upon
such assumption, may (in its sole discretion and without any obligation to do
so) make available to the applicable Borrower a corresponding amount. If such
corre-
<PAGE>
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sponding amount is not in fact made available to the Administrative Agent by
such Lender and the Administrative Agent has made available same to the
applicable Borrower, the Administrative Agent shall be entitled to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent's demand therefor,
the Administrative Agent shall promptly notify the applicable Borrower, and the
applicable Borrower shall immediately pay such corresponding amount to the
Administrative Agent, which payment may be made, subject to the terms and
conditions of this Agreement, from the proceeds of a Loan. The Administrative
Agent shall also be entitled to recover from the Lender or the applicable
Borrower, as the case may be, interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
Administrative Agent to the applicable Borrower to the date such corresponding
amount is recovered by the Administrative Agent, at a rate per annum equal to
(x) if paid by such Lender, the overnight Federal Funds Rate or (y) if paid by
the applicable Borrower, the then applicable rate of interest, calculated in
accordance with Section 1.08.
(b) Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights which
the Borrowers may have against any Lender as a result of any default by such
Lender hereunder.
1.05. Notes. (a) Upon the written request of a Lender, the
applicable Borrower's obligation to pay the principal of, and interest on, all
the Loans made to it by each Lender shall be evidenced (i) if Tranche A Term
Loans, by a promissory note duly executed and delivered by the applicable
Borrower substantially in the form of Exhibit B-1 with blanks appropriately
completed in conformity herewith (each, a "Tranche A Term Note" and,
collectively, the "Tranche A Term Notes"), (ii) if Tranche B Term Loans, by a
promissory note duly executed and delivered by the applicable Borrower
substantially in the form of Exhibit B-2 with blanks appropriately completed in
conformity herewith (each, a "Tranche B Term Note" and, collectively, the
"Tranche B Term Notes"), (iii) if Revolving Loans, by a promissory note duly
executed and delivered by the applicable Borrower substantially in the form of
Exhibit B-4, with blanks appropriately completed in conformity herewith (each, a
"Revolving Note" and, collectively, the "Revolving Notes") and (iv) if Swingline
Loans, by a promissory note duly executed and delivered by the applicable
Borrower substantially in the form of Exhibit B-5, with blanks appropriately
completed in conformity herewith (the "Swingline Note").
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(b) The Tranche A Term Note, if issued to a requesting Lender, shall
(i) be executed by the applicable Borrower, (ii) be payable to such Lender or
its registered assigns and be dated the Initial Borrowing Date, (iii) be in a
stated principal amount equal to the Tranche A Term Loan made by such Lender on
the Initial Borrowing Date and be payable in the principal amount of Tranche A
Term Loans evidenced thereby, (iv) mature on the Tranche A Term Loan Maturity
Date, (v) bear interest as provided in the appropriate clause of Section 1.08 in
respect of the Base Rate Loans and Eurodollar Loans, as the case may be,
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01 and mandatory repayment as provided in Section 4.02, and (vii) be
entitled to the benefits of the Credit Documents.
(c) The Tranche B Term Note, if issued to a requesting Lender, shall
(i) be executed by the applicable Borrower, (ii) be payable to such Lender or
its registered assigns and be dated the Initial Borrowing Date, (iii) be in a
stated principal amount equal to the Tranche B Term Loan made by such Lender on
the Initial Borrowing Date and be payable in the principal amount of Tranche B
Term Loans evidenced thereby, (iv) mature on the Tranche B Term Loan Maturity
Date, (v) bear interest as provided in the appropriate clause of Section 1.08 in
respect of the Base Rate Loans and Eurodollar Loans, as the case may be,
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01 and mandatory repayment as provided in Section 4.02, and (vii) be
entitled to the benefits of the Credit Documents.
(d) The Revolving Note, if issued to a requesting Lender, shall (i)
be executed by the applicable Borrower, (ii) be payable to such Lender or its
registered assigns and be dated the Initial Borrowing Date, (iii) be in a stated
principal amount equal to the Revolving Loan Commitment of such Lender and be
payable in the principal amount of the outstanding Revolving Loans evidenced
thereby, (iv) mature on the Revolving Loan Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the Base Rate
Loans and Euro Rate Loans, as the case may be, evidenced thereby, (vi) be
subject to voluntary prepayment as provided in Section 4.01, and mandatory
prepayment as provided in Section 4.02, and (vii) be entitled to the benefits of
the Credit Documents.
(e) The Swingline Note, if issued to BTCo, shall (i) be executed by
the applicable Borrower, (ii) be payable to BTCo or its registered assigns and
be dated the Initial Borrow-
<PAGE>
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ing Date, (iii) be in a stated principal amount equal to the Maximum Swingline
Amount and be payable in the principal amount of the outstanding Swingline Loans
evidenced thereby, (iv) mature on the Swingline Expiry Date, (v) bear interest
as provided in Section 1.08 in respect of the Base Rate Loans evidenced thereby,
(vi) be subject to voluntary prepayment as provided in Section 4.01, and
mandatory repayment as provided in Section 4.02, and (vii) be entitled to the
benefits of the Credit Documents.
(f) Each Lender will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
shall not affect the applicable Borrower's obligations in respect of such Loans.
1.06. Conversions. The applicable Borrower shall have the option to
convert all or a portion equal to at least (x) in the case of a conversion of
Term Loans, $5,000,000 (and, if greater, in an integral multiple of $500,000)
and (y) in the case of a conversion of Revolving Loans (i) denominated in U.S.
Dollars $1,000,000 (and, if greater, in an integral multiple of $100,000) and
(ii) denominated in Alternate Currency, the Foreign Currency Equivalent of
$1,000,000 (and, if greater, in an integral multiple of $100,000), rounded down
to the nearest 1,000 units of such Available Foreign Currency), of the
outstanding principal amount of Loans made pursuant to one or more Borrowings
(so long as of the same Tranche) of one or more Types of Loans into a Borrowing
or Borrowings (of the same Tranche) of another Type of Loan; provided that (i)
except as otherwise provided in Section 1.10(b), Euro Rate Loans may be
converted into Base Rate Loans only on the last day of an Interest Period
applicable to the Loans being converted and no partial conversion of a Borrowing
of Euro Rate Loans shall reduce the outstanding principal amount of the Euro
Rate Loans made pursuant to a single Borrowing to less than (x) in the case of
Term Loans, $5,000,000 and (y) in the case of Revolving Loans, $1,000,000, (ii)
Base Rate Loans may only be converted into Euro Rate Loans if no payment Default
or Event of Default is in existence on the date of the conversion and (iii)
Borrowings of Euro Rate Loans resulting from this Section 1.06 shall be limited
in number as provided in Section 1.02. Each such conversion shall be effected by
the applicable Borrower by giving the Administrative Agent, at its Notice
Office, (x) in the case of Loans denominated in U.S. Dollars, prior to 10:00
A.M. (New York time), at least two
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Business Days' (or one Business Day's in the case of a conversion into Base Rate
Loans) prior written notice (or telephonic notice promptly confirmed in writing)
and (y) in the case of an Alternate Currency Loan, prior to 10:00 A.M. (London
time), at least three Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) (each a "Notice of Conversion") specifying the
Loans to be so converted, the Borrowing(s) pursuant to which such Loans were
made and, if to be converted into a Borrowing of Euro Rate Loans, the Interest
Period to be initially applicable thereto. The Administrative Agent shall give
each Lender prompt notice of any such proposed conversion affecting any of its
Loans. Notwithstanding anything herein to the contrary, no incurrence of a Loan
in a Currency different from the Currency in which the Loan was previously
incurred shall constitute a conversion under this Section 1.06 and instead shall
constitute a new Borrowing.
1.07. Pro Rata Borrowings. All Borrowings of Tranche A Term Loans,
Tranche B Term Loans and Revolving Loans under this Agreement shall be incurred
from the Lenders pro rata on the basis of their respective Tranche A Term Loan
Commitments, Tranche B Term Loan Commitments or Revolving Loan Commitments, as
the case may be. It is understood that no Lender shall be responsible for any
default by any other Lender of its obligation to make Loans hereunder and that
each Lender shall be obligated to make the Loans provided to be made by it
hereunder, regardless of the failure of any other Lender to fulfill its
commitments hereunder.
1.08. Interest. (a) The unpaid principal amount of each Base Rate
Loan shall bear interest from the date of the Borrowing thereof until the
earlier of (i) the maturity (whether by acceleration or otherwise) of such Base
Rate Loan and (ii) the conversion of such Base Rate Loan to a Euro Rate Loan
pursuant to Section 1.06, at a rate per annum which shall at all times be the
Applicable Base Rate Margin in excess of the Base Rate in effect from time to
time.
(b) The unpaid principal amount of each Euro Rate Loan shall bear
interest from the date of the Borrowing thereof until the earlier of (i) the
maturity (whether by acceleration or otherwise) of such Euro Rate Loan and (ii)
the conversion of such Euro Rate Loan to a Base Rate Loan pursuant to Section
1.06, 1.09 or 1.10(b), as applicable, at a rate per annum which shall at all
times be the Applicable Euro Rate Margin in excess of the relevant Euro Rate.
<PAGE>
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(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan shall bear interest at a rate per annum equal
to the greater of (x) the rate which is 2% in excess of the rate then borne by
such Loans and (y) the rate which is 2% in excess of the rate otherwise
applicable to Base Rate Loans from time to time. Interest which accrues under
this Section 1.08(c) shall be payable on demand.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof (determined in
accordance with Section 4.03) and shall be payable (i) in respect of each Base
Rate Loan, quarterly in arrears on each Quarterly Payment Date, (ii) in respect
of each Euro Rate Loan, on (x) the date of any prepayment or repayment thereof
(on the amount prepaid or repaid) in the case of a Revolving Loan, (y) the date
of any conversion into a Base Rate Loan pursuant to Section 1.06, 1.09 or
1.10(b), as applicable (on the amount so converted) and (z) the last day of each
Interest Period applicable thereto and, in the case of an Interest Period in
excess of three months, on each date occurring at three month intervals after
the first day of such Interest Period and (iii) in respect of each Loan, at
maturity (whether by acceleration or otherwise) and, after such maturity, on
demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
(f) The Administrative Agent, upon determining the interest rate for
any Borrowing of Euro Rate Loans for any Interest Period, shall promptly notify
the Borrowers and the Lenders thereof.
1.09. Interest Periods. At the time the applicable Borrower gives a
Notice of Borrowing or Notice of Conversion in respect of the making of, or
conversion into, a Borrowing of Euro Rate Loans (in the case of the initial
Interest Period applicable thereto) or prior to 10:00 A.M. (New York time) on
the second Business Day prior to the expiration of an Interest Period applicable
to a Borrowing of Euro Rate Loans, the applicable Borrower shall have the right
to elect by giving the Administrative Agent written notice (or telephonic notice
promptly confirmed in writing) of the Interest Period applicable to such
Borrowing, which Interest Period shall be, at the option of the applicable
Borrower, (a) a one, two, three or six month period or (b) in the case of a Euro
Rate Loan in U.S. Dollars, a nine or twelve month period if the Administrative
Agent, after consultation with the Lenders, shall have determined in good faith
<PAGE>
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based on then prevailing conditions in the interbank Eurodollar market that U.S.
Dollar deposits are generally then being offered to first class banks in the
interbank Eurodollar market for a comparable maturity and all of the Lenders
shall have agreed to such Interest Period; provided that the Interest Period for
all Euro Rate Loans from the Initial Borrowing Date until the earlier of (x) the
60th day after the Initial Borrowing Date or (y) the determination by the
Administrative Agent that the Syndication Date has occurred shall be seven days
and no more than one different Interest Period for Euro Rate Loans may be
outstanding at any one time during such period. Notwithstanding anything to the
contrary contained above:
(i) all Euro Rate Loans comprising a single Borrowing shall have the
same Interest Period;
(ii) the initial Interest Period for any Borrowing of Euro Rate
Loans shall commence on the date of such Borrowing (including the date of
any conversion from a Borrowing of Base Rate Loans) and each Interest
Period occurring thereafter in respect of such Borrowing shall commence on
the day on which the next preceding Interest Period expires;
(iii) if any Interest Period relating to a Euro Rate Loan begins on
a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest Period shall end
on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that if any Interest Period for a Euro
Rate Loan would otherwise expire on a day which is not a Business Day but
is a day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business
Day;
(v) no Interest Period in respect of any Borrowing of any Tranche of
Loans shall be elected which extends beyond the respective Maturity Date
for such Tranche of Loans;
(vi) no Interest Period may be elected at any time when a Default or
any Event of Default is then in existence; and
<PAGE>
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(vii) no Interest Period in respect of any Borrowing of Term Loans
shall be selected which extends beyond any date upon which a mandatory
repayment of such Term Loans will be required to be made under Section
4.02(b) or (c), as the case may be, if the aggregate principal amount of
Term Loans which have Interest Periods which will expire after such date
will be in excess of the aggregate principal amount of Term Loans then
outstanding less the aggregate amount of such required prepayment.
If upon the expiration of any Interest Period applicable to a
Borrowing of Euro Rate Loans, the applicable Borrower has failed to elect, or is
not permitted to elect by virtue of the application of clause (vi) above, a new
Interest Period to be applicable to the respective Borrowing of Euro Rate Loans
as provided above, the applicable Borrower shall be deemed to have elected to
convert such Borrowing into a Borrowing of Base Rate Loans effective as of the
expiration date of such current Interest Period.
1.10. Increased Costs, Illegality, etc. (a) In the event that (x) in
the case of clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Lender shall have determined (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto):
(i) on any date for determining the Euro Rate for any Interest
Period, that, by reason of any changes arising after the date of this
Agreement affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of Euro Rate; or
(ii) at any time, that such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Euro Rate Loans (other than any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a change
in the rate of net income taxes or similar charges) because of (x) any
change since the date of this Agreement in any applicable law,
governmental rule, regulation, guideline, order or request (whether or not
having the force of law), or in the interpretation or administration
thereof and including the introduction of any new law or governmental
rule, regulation, guideline, order or request (such as, for example, but
not limited to, a change in official reserve requirements, but, in all
events, ex-
<PAGE>
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cluding reserves required under Regulation D to the extent included in the
computation of the Euro Rate) and/or (y) other circumstances affecting
such Lender, the interbank Eurodollar market or the position of such
Lender in such market; or
(iii) at any time since the date of this Agreement, that the making
or continuance of any Euro Rate Loan has become unlawful by compliance by
such Lender in good faith with any law, governmental rule, regulation,
guideline or order (or would conflict with any such governmental rule,
regulation, guideline or order not having the force of law but with which
such Lender customarily complies even though the failure to comply
therewith would not be unlawful), or has become impracticable as a result
of a contingency occurring after the date of this Agreement which
materially and adversely affects the interbank Eurodollar market;
then, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall (x) within five Business Days after any such
event and (y) within five Business Days of the date on which such event no
longer exists give notice (by telephone confirmed in writing) to the Borrowers
and (except in the case of clause (i)) to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Lenders). Thereafter, (x) in the case of clause (i) above,
Euro Rate Loans shall no longer be available until such time as the
Administrative Agent notifies the Borrowers and the Lenders that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist (which notice the Administrative Agent shall endeavor to give promptly
after any express determination thereof by the Administrative Agent), and any
Notice of Borrowing or Notice of Conversion given by the Borrowers with respect
to Euro Rate Loans which have not yet been incurred shall be deemed rescinded by
the Borrowers, (y) in the case of clause (ii) above, the Borrowers agree to pay
to such Lender, upon written demand therefor (accompanied by the written notice
referred to below), such additional amounts (in the form of an increased rate
of, or a different method of calculating, interest or otherwise as such Lender
in its sole discretion shall determine) as shall be required to compensate such
Lender for such increased costs or reductions in amounts received or receivable
hereunder (a written notice as to the additional amounts owed to such Lender,
showing the basis for the calculation thereof, submitted to the Borrowers by
such Lender shall, absent manifest error, be final and conclusive and binding
upon
<PAGE>
-19-
all parties hereto) and (z) in the case of clause (iii) above, the Borrowers
shall take one of the actions specified in Section 1.10(b) as promptly as
possible and, in any event, within the time period required by law.
(b) At any time that any Euro Rate Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrowers may (and
in the case of a Euro Rate Loan affected pursuant to Section 1.10(a)(iii) the
Borrowers shall) either (i) if the affected Euro Rate Loan is then being made
pursuant to a Borrowing, cancel said Borrowing by giving the Administrative
Agent telephonic notice (confirmed promptly in writing) thereof on the same date
that the Borrowers were notified by a Lender pursuant to Section 1.10(a)(ii) or
(iii)), or (ii) if the affected Euro Rate Loan is then outstanding, upon at
least two Business Days' notice to the Administrative Agent, require the
affected Lender to convert each such Euro Rate Loan into a Base Rate Loan (which
conversion, in the case of the circumstances described in Section 1.10(a)(iii),
shall occur no later than the last day of the Interest Period then applicable to
such Euro Rate Loan (or such earlier date as shall be required by applicable
law)); provided that if more than one Lender is affected at any time, then all
affected Lenders must be treated the same pursuant to this Section 1.10(b).
(c) If any Lender shall have determined that the adoption or
effectiveness of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Lender or any corporation controlling such Lender with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, in each case, after the
date of this Agreement, has or would have the effect of reducing the rate of
return on such Lender's or such other corporation's capital or assets as a
consequence of such Lender's Commitments or obligations hereunder to a level
below that which such Lender or such other corporation could have achieved but
for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's or such other corporation's policies with respect to
capital adequacy), then from time to time, upon written demand by such Lender
(with a copy to the Administrative Agent), accompanied by the notice referred to
in the last sentence of this clause (c), the Borrowers shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such other
corporation for such reduction.
<PAGE>
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Each Lender, upon determining in good faith that any additional amounts will be
payable pursuant to this Section 1.10(c), will give prompt written notice
thereof to the Borrowers, which notice shall set forth the basis of the
calculation of such additional amounts, although the failure to give any such
notice shall not release or diminish the Borrowers' obligations to pay
additional amounts pursuant to this Section 1.10(c) upon the subsequent receipt
of such notice.
1.11. Compensation. The Company shall compensate each Lender,
promptly upon its written request (which request shall set forth the basis for
requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Lender to fund its Euro Rate Loans but excluding loss of
anticipated profit with respect to any Euro Rate Loans) which such Lender may
sustain: (i) if for any reason (other than a default by such Lender or the
Administrative Agent) a Borrowing of Euro Rate Loans does not occur on a date
specified therefor in a Notice of Borrowing or Notice of Conversion (whether or
not withdrawn by the Borrowers or deemed withdrawn pursuant to Section 1.10(a)
or (b)); (ii) if any repayment (including any repayment made pursuant to Section
4.01 or 4.02 or as a result of an acceleration of the Loans pursuant to Section
9) or conversion of any Euro Rate Loans occurs on a date which is not the last
day of an Interest Period applicable thereto; (iii) if any prepayment of any
Euro Rate Loans is not made on any date specified in a notice of prepayment
given by the Borrowers; or (iv) as a consequence of (x) any other default by the
Borrowers to repay their Euro Rate Loans when required by the terms of this
Agreement or (y) an election made pursuant to Section 1.10(b). Calculation of
all amounts payable to a Lender under this Section 1.11 shall be made as though
that Lender had actually funded its relevant Euro Rate Loan through the purchase
of a Eurodollar deposit bearing interest at the Euro Rate in an amount equal to
the amount of that Loan, having maturity comparable to the relevant Interest
Period and through the transfer of such Eurodollar deposit from an offshore
office of that Lender to a domestic office of that Lender in the United States
of America; provided, however, that each Lender may fund each of its Euro Rate
Loans in any manner it sees fit and the foregoing assumption shall be utilized
only for the calculation of amounts payable under this Section 1.11. It is
further understood and agreed that if any repayment of Euro Rate Loans pursuant
to Section 4.01 or any conversion of Euro Rate Loans pursuant to Section 1.06 in
either case occurs on a date which is not the last day of an Interest Period
ap-
<PAGE>
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plicable thereto, such repayment or conversion shall be accompanied by any
amounts owing to any Lender pursuant to this Section 1.11.
1.12. Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), 1.10(c), 2.05 or 4.04 with respect to such Lender, it will, if requested
by the Borrowers, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any Loans
or Letters of Credit affected by such event; provided that such designation is
made on such terms that, in the sole judgment of such Lender, such Lender and
its lending office suffer no economic, legal or regulatory disadvantage, with
the object of avoiding the consequences of the event giving rise to the
operation of any such Section. Nothing in this Section 1.12 shall affect or
postpone any of the obligations of the Borrowers or the right of any Lender
provided in Section 1.10, 2.05 or 4.04.
1.13. Replacement of Lenders. (x) If any Lender becomes a Defaulting
Lender, (y) upon the occurrence of any event giving rise to the operation of
Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.05 or Section 4.04 with
respect to any Lender which results in such Lender charging to the Borrowers
increased costs in excess of those being generally charged by the other Lenders
or (z) in the case of a refusal by a Lender to consent to a proposed change,
waiver, discharge or termination with respect to this Agreement which has been
approved by the Required Lenders as provided in Section 12.12(b), the Borrowers
shall have the right, if no Default or Event of Default then exists or, in the
case of clause (z) above, would exist after giving effect to such replacement,
to replace such Lender (the "Replaced Lender") with one or more other Eligible
Transferees, none of whom shall constitute a Defaulting Lender at the time of
such replacement (collectively, the "Replacement Lender") and each of whom shall
be acceptable to the Administrative Agent; provided that (i) at the time of any
replacement pursuant to this Section 1.13, the Replacement Lender shall enter
into one or more Assignment and Assumption Agreements pursuant to Section
12.04(b) (and with all fees payable pursuant to said Section 12.04(b) to be paid
by the Replacement Lender) pursuant to which the Replacement Lender shall
acquire the Commitments and outstanding Loans of, and in each case
participations in Letters of Credit by, the Replaced Lender and, in connection
therewith, shall pay to (x) the Replaced Lender in respect thereof an amount
equal to the sum of (A) an amount equal to the principal of, and all accrued
interest on, all outstand-
<PAGE>
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ing Loans of the Replaced Lender, (B) an amount equal to all Unpaid Drawings
that have been funded by (and not reimbursed to) such Replaced Lender, together
with all then unpaid interest with respect thereto at such time and (C) an
amount equal to all accrued, but theretofore unpaid, Fees owing to the Replaced
Lender pursuant to Section 3.01, (y) each Letter of Credit Issuer an amount
equal to such Replaced Lender's Percentage of any Unpaid Drawing relating to
Letters of Credit issued by such Letter of Credit Issuer (which at such time
remains an Unpaid Drawing) to the extent such amount was not theretofore funded
by such Replaced Lender and (z) BTCo an amount equal to such Replaced Lender's
Percentage of any Mandatory Borrowing to the extent such amount was not
theretofore funded by such Replaced Lender, and (ii) all obligations of the
Borrowers then owing to the Replaced Lender (other than those specifically
described in clause (i) above in respect of which the assignment purchase price
has been, or is concurrently being, paid, but including all amounts, if any,
owing under Section 1.11) shall be paid in full to such Replaced Lender,
concurrently with such replacement. Upon the execution of the respective
Assignment and Assumption Agreements, the payment of amounts referred to in
clauses (i) and (ii) above, recordation of the assignment on the Register by the
Administrative Agent pursuant to Section 7.12 and, if so requested by the
Replacement Lender of the appropriate Note or Notes executed by the Borrowers,
the Replacement Lender shall become a Lender hereunder and the Replaced Lender
shall cease to constitute a Lender hereunder, except with respect to
indemnification provisions under this Agreement (including, without limitation,
Sections 1.10, 1.11, 2.05, 4.04, 12.01 and 12.06), which shall survive as to
such Replaced Lender.
1.14. European Monetary Union. (a) If, as a result of the
implementation of European Monetary Union, (i) the Pounds Sterling ceases to be
lawful currency of the nation issuing the same and is replaced by the Euro, or
(ii) the Pounds Sterling and the Euro are at the same time recognized by the
central bank or comparable governmental authority of the United Kingdom as
lawful currency of the United Kingdom and the Administrative Agent or the
Required Lenders shall so request in a notice delivered to the Company, then any
amount payable hereunder by any party hereto in Pounds Sterling shall instead be
payable in the Euro and the amount so payable shall be determined by translating
the amount payable in Pounds Sterling to the Euro at the exchange rate
recognized by the European Central Bank for the purpose of implementing European
Monetary Union. Prior to the occurrence of the event or events described in
clause (i) or (ii) of the preceding sentence, each amount
<PAGE>
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payable hereunder in Pounds Sterling will, except as otherwise provided herein,
continue to be payable only in that Currency.
(b) The applicable Borrower agrees, at the request of any Lender, to
compensate such Lender for any loss, cost, expense or reduction in return that
such Lender shall reasonably determine shall be incurred or sustained by such
Lender as a result of the implementation of European Monetary Union and that
would not have been incurred or sustained but for the transactions provided for
herein. A certificate of a Lender setting forth such Lender's determination of
the amount or amounts necessary to compensate such Lender shall be delivered to
the Company and shall be conclusive and binding on the applicable Borrower
absent manifest error. The applicable Borrower shall pay such Lender the amount
shown as due on any such certificate within 30 days after receipt thereof. If
the applicable Borrower objects in good faith to any payment demanded under this
clause on or before the date such payment is due, then the applicable Borrower
and the Lender demanding such payment shall enter into discussions to review the
amount due, and the applicable Borrower's obligation to pay such amount to such
Lender shall be deferred for 45 days after the original demand for payment, and
if the applicable Borrower and such Lender do not reach agreement during such
45-day period on the amount due, the applicable Borrower shall pay to such
Lender at the end of such 45-day period the amount certified by such Lender to
be due.
(c) The parties hereto agree, at the time of or at any time
following the implementation of European Monetary Union, to use reasonable
efforts to enter into an agreement amending this Agreement in order to reflect
the implementation of such monetary union, to permit (if feasible) the Euro to
qualify as an Alternate Currency under the terms and conditions of the
definition of such term and to place the parties hereto in the position with
respect to the settlement of payments of the Euro as they would have been with
respect to the settlement of the Currencies it replaced.
1.15. Subsidiary Borrowers. Subject to the prior written consent of
the Administrative Agent (which consent shall not unreasonably be withheld or
delayed), the Company may designate any Non-U.S. Subsidiary of the Company as a
Subsidiary Borrower for the purposes only of borrowing Alternate Currency Loans
by delivery to the Administrative Agent of a borrowing subsidiary agreement,
substantially in the form of Exhibit N hereto, executed by such Subsidiary and
the Company, and upon such delivery such Subsidiary shall for all purposes
<PAGE>
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of this Agreement be a Subsidiary Borrower and a party to this Agreement unless
such designation has thereafter been terminated by the Company or the
Administrative Agent, whereupon such Subsidiary shall cease to be a Subsidiary
Borrower and a party to this Agreement. Notwithstanding the preceding sentence,
no such termination will become effective as to any Subsidiary Borrower at a
time when any principal of or interest on any Alternate Currency Loan to such
Subsidiary Borrower shall be outstanding hereunder, provided that such
termination shall be effective to terminate such Subsidiary Borrower's right to
make further borrowings under this Agreement.
1.16. Currency For Payments. Except to the extent otherwise provided
herein, all payments of principal of and interest on any Loan denominated in
U.S. Dollars, and all fees and other amounts (other than the principal of and
interest on any Alternate Currency Loan) to be paid by the Borrowers under this
Agreement shall be made in U.S. Dollars, and all payments or principal of and
interest on any Alternate Currency Loan shall be made in such Alternate
Currency, in each case in immediately available funds, without set-off or
counterclaim, to the Administrative Agent's account for the Currency in which
such Loan or other amount is denominated, not later than 11:00 A.M. local time
on the date on which such payment shall become due (each payment made after such
time on such due date to be deemed to have been made on the next Business Day).
SECTION 2. Letters of Credit.
2.01. Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Company may request the Letter of Credit Issuer
at any time and from time to time on or after the Initial Borrowing Date and
prior to the tenth Business Day preceding the Revolving Loan Maturity Date and
Essex may request the Letter of Credit Issuer at any time and from time to time
on or after the Initial Borrowing Date until the consummation of the Merger to
issue, for the account of either Borrower and in support of, on a standby basis,
L/C Supportable Indebtedness of either Borrower or any of their respective
Subsidiaries that are Guarantors to any other Person, irrevocable letters of
credit in such form as may be approved by such Letter of Credit Issuer (each
such letter of credit, a "Letter of Credit" and, collectively, the "Letters of
Credit"). Notwithstanding the foregoing, no Letter of Credit Issuer shall be
under any obligation to issue any Letter of Credit if at the time of such
issuance:
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(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Letter of
Credit Issuer from issuing such Letter of Credit or any requirement of law
applicable to such Letter of Credit Issuer or any request or directive
(whether or not having the force of law) from any governmental authority
with jurisdiction over such Letter of Credit Issuer shall prohibit, or
request that such Letter of Credit Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or
shall impose upon such Letter of Credit Issuer with respect to such Letter
of Credit any restriction or reserve or capital requirement (for which
such Letter of Credit Issuer is not otherwise compensated pursuant to the
terms hereof) not in effect on the date hereof, or any unreimbursed loss,
cost or expense which was not applicable, in effect or known to such
Letter of Credit Issuer as of the date hereof and which such Letter of
Credit Issuer in good faith deems material to it; or
(ii) such Letter of Credit Issuer shall have received notice from
the applicable Borrower or the Required Lenders prior to the issuance of
such Letter of Credit of the type described in clause (v) of Section
2.01(b).
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time, would
exceed either (x) the Letter of Credit Sublimit or (y) when added to the
aggregate principal amount of all Revolving Loans and Swingline Loans then
outstanding, the Total Revolving Loan Commitment at such time; (ii) each Letter
of Credit (including Letters of Credit requested by Essex prior to the
consummation of the Merger) shall have an expiry date occurring not later than
one year after such Letter of Credit's date of issuance; provided that any such
Letter of Credit may be automatically extendible for periods of up to one year
so long as such Letter of Credit provides that the respective Letter of Credit
Issuer retains an option, satisfactory to such Letter of Credit Issuer, to
terminate such Letter of Credit within a specified period of time prior to each
scheduled extension date; provided, further, that any Letter of Credit shall
expire no later than five Business Days prior to the Revolving Loan Maturity
Date; (iii) each Letter of Credit shall be denominated in U.S. Dollars and
issued on a sight basis; (iv) each Letter of Credit shall not be less than
$25,000.00 or such lesser amount as is
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acceptable to the respective Letter of Credit Issuer; and (v) no Letter of
Credit Issuer will issue any Letter of Credit after it has received written
notice from the Borrowers or the Required Lenders stating that a Default or an
Event of Default exists until such time as such Letter of Credit Issuer shall
have received a written notice of (x) rescission of such notice from the party
or parties originally delivering the same or (y) a waiver of such Default or
Event of Default by the Required Lenders.
(c) Notwithstanding the foregoing, in the event a Lender Default
exists, no Letter of Credit Issuer shall be required to issue any Letter of
Credit unless the respective Letter of Credit Issuer has entered into
arrangements satisfactory to it and the Borrowers to eliminate such Letter of
Credit Issuer's risk with respect to the participation in Letters of Credit of
the Defaulting Lender or Lenders.
(d) Letters of Credit issued under the Existing Superior Credit
Agreement set forth on Annex VII are deemed to be issued under this Agreement.
2.02. Letter of Credit Requests; Notices of Issuance. (a) Whenever
the applicable Borrower desires that a Letter of Credit be issued, the
applicable Borrower shall give the Administrative Agent and the respective
Letter of Credit Issuer written notice (including by way of facsimile
transmission to facsimile number (212) 250-5817) thereof prior to 12:00 Noon
(New York time) at least two Business Days (or such shorter period as may be
acceptable to the respective Letter of Credit Issuer) prior to the proposed date
of issuance (which shall be a Business Day) which written notice shall be in the
form of Exhibit A-2 (each, a "Letter of Credit Request"). Each Letter of Credit
Request shall include any other documents as such Letter of Credit Issuer
customarily requires in connection therewith.
(b) Each Letter of Credit Issuer shall, promptly after each issuance
of, or amendment or modification to, a Letter of Credit issued by it, give the
Administrative Agent, each Lender and the applicable Borrower written notice of
the issuance of, or amendment or modification to, such Letter of Credit, which
notice may, if requested by any Lender, be accompanied by a copy of the Letter
of Credit or Letters of Credit issued by it and each such amendment or
modification thereto.
2.03. Agreement to Repay Letter of Credit Drawings. (a) Each
Borrower hereby agrees to reimburse each Letter of
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Credit Issuer, by making payment to the Administrative Agent in immediately
available funds at the Payment Office, for any payment or disbursement made by
such Letter of Credit Issuer under any Letter of Credit issued by it at the
request of such Borrower (each such amount so paid or disbursed until
reimbursed, an "Unpaid Drawing") no later than one Business Day following the
date of such payment or disbursement, with interest on the amount so paid or
disbursed by such Letter of Credit Issuer, to the extent not reimbursed prior to
1:00 P.M. (New York time) on the date of such payment or disbursement, from and
including the date paid or disbursed to but not including the date such Letter
of Credit Issuer is reimbursed therefor at a rate per annum which shall be the
Applicable Base Rate Margin in excess of the Base Rate as in effect from time to
time (plus an additional 2% per annum if not reimbursed by the third Business
Day after the date of such payment or disbursement), such interest also to be
payable on demand. Each Letter of Credit Issuer shall provide the applicable
Borrower prompt notice of any payment or disbursement made by it under any
Letter of Credit issued by it, although the failure of, or delay in, giving any
such notice shall not release or diminish the obligations of the applicable
Borrower under this Section 2.03(a) or under any other Section of this
Agreement.
(b) Each Borrower's obligation under this Section 2.03 to reimburse
the respective Letter of Credit Issuer with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the applicable Borrower or any of its Subsidiaries may
have or have had against such Letter of Credit Issuer, the Administrative Agent
or any Lender, including, without limitation, any defense based upon the failure
of any drawing under a Letter of Credit issued by it to conform to the terms of
the Letter of Credit or any nonapplication or misapplication by the beneficiary
of the proceeds of such drawing; provided, however, that the applicable Borrower
shall not be obligated to reimburse such Letter of Credit Issuer for any
wrongful payment made by such Letter of Credit Issuer under a Letter of Credit
issued by it as a result of acts or omissions that have been found to constitute
willful misconduct or gross negligence, as determined by a court of competent
jurisdiction, on the part of such Letter of Credit Issuer.
2.04. Letter of Credit Participations. (a) Immediately upon the
issuance by a Letter of Credit Issuer of any Letter of Credit, such Letter of
Credit Issuer shall be deemed to have sold and transferred to each other
Revolving Loan
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Lender, and each such Revolving Loan Lender (each a "Participant") shall be
deemed irrevocably and unconditionally to have purchased and received from such
Letter of Credit Issuer, without recourse or warranty, an undivided interest and
participation, to the extent of such Participant's Percentage, in such Letter of
Credit, each substitute Letter of Credit, each drawing made thereunder and the
obligations of the Borrowers under this Agreement with respect thereto (although
Letter of Credit Fees shall be payable directly to the Administrative Agent for
the account of the Lenders as provided in Section 3.01(b) and the Participants
shall have no right to receive any portion of any Facing Fees with respective to
such Letters of Credit) and any security therefor or guaranty pertaining
thereto. Upon any change in the Revolving Loan Commitments of the Revolving Loan
Lenders pursuant to Section 1.13 or 12.04(b), it is hereby agreed that, with
respect to all outstanding Letters of Credit and Unpaid Drawings with respect
thereto, there shall be an automatic adjustment to the participations pursuant
to this Section 2.04 to reflect the new Percentages of the assigning and
assignee Lender.
(b) In determining whether to pay under any Letter of Credit, no
Letter of Credit Issuer shall have any obligation relative to the Participants
other than to determine that any documents required to be delivered under such
Letter of Credit have been delivered and that they appear to substantially
comply on their face with the requirements of such Letter of Credit. Any action
taken or omitted to be taken by any Letter of Credit Issuer under or in
connection with any Letter of Credit issued by it if taken or omitted in the
absence of such a finding of gross negligence or willful misconduct, as
determined by a court of competent jurisdiction, shall not create for such
Letter of Credit Issuer any resulting liability.
(c) In the event that any Letter of Credit Issuer makes any payment
under any Letter of Credit issued by it and the applicable Borrower shall not
have reimbursed such amount in full to the Letter of Credit Issuer pursuant to
Section 2.03(a), such Letter of Credit Issuer shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify each
Participant of such failure, and each such Participant shall promptly and
unconditionally pay to the Administrative Agent for the account of such Letter
of Credit Issuer, the amount of such Participant's Percentage of such payment in
U.S. Dollars and in same day funds; provided, however, that no Participant shall
be obligated to pay to the Administrative Agent its Percentage of such
unreimbursed amount for any wrongful payment made by such Letter of Credit
Issuer
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under a Letter of Credit issued by it as a result of acts or omissions that have
been found to constitute willful misconduct or gross negligence, as determined
by a court of competent jurisdiction, on the part of such Letter of Credit
Issuer. If the Administrative Agent so notifies any Participant required to fund
a payment under a Letter of Credit prior to 11:00 A.M. (New York time) on any
Business Day, such Participant shall make available to the Administrative Agent
for the account of the respective Letter of Credit Issuer such Participant's
Percentage of the amount of such payment on such Business Day in same day funds
(and, to the extent such notice is given after 11:00 A.M. (New York time) on any
Business Day, such Participant shall make such payment on the immediately
following Business Day). If and to the extent such Participant shall not have so
made its Percentage of the amount of such payment available to the
Administrative Agent for the account of the respective Letter of Credit Issuer,
such Participant agrees to pay to the Administrative Agent for the account of
such Letter of Credit Issuer, forthwith on demand such amount, together with
interest thereon, for each day from such date until the date such amount is paid
to the Administrative Agent for the account of the Letter of Credit Issuer at
the overnight Federal Funds Rate. The failure of any Participant to make
available to the Administrative Agent for the account of the respective Letter
of Credit Issuer its Percentage of any payment under any Letter of Credit issued
by it shall not relieve any other Participant of its obligation hereunder to
make available to the Administrative Agent for the account of such Letter of
Credit Issuer its applicable Percentage of any payment under any such Letter of
Credit on the date required, as specified above, but no Participant shall be
responsible for the failure of any other Participant to make available to the
Administrative Agent for the account of such Letter of Credit Issuer such other
Participant's Percentage of any such payment.
(d) Whenever any Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received for
the account of such Letter of Credit Issuer any payments from the Participants
pursuant to clause (c) above, such Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to each
Participant which has paid its Percentage thereof, in U.S. Dollars and in same
day funds, an amount equal to such Participant's Percentage of the principal
amount thereof and interest thereon accruing after the purchase of the
respective participations.
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(e) The obligations of the Participants to make payments to the
Administrative Agent for the account of the respective Letter of Credit Issuer
with respect to each Letter of Credit issued by it shall be irrevocable and not
subject to counterclaim, set-off or other defense or any other qualification or
exception whatsoever and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which the applicable Borrower or any of their respective Subsidiaries may
have at any time against a beneficiary named in a Letter of Credit, any
transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, any Letter of Credit
Issuer, any Lender, or other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying transaction between
the applicable Borrower or any of their respective Subsidiaries and the
beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.05. Increased Costs. If the adoption or effectiveness of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Letter of Credit Issuer or any Participant with
any request or directive (whether or not having the force of law) by any such
authority, central
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bank or comparable agency, in each case, after the date hereof, shall either (i)
impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against Letters of Credit issued by such Letter of Credit
Issuer or such Participant's participation therein, or (ii) impose on any Letter
of Credit Issuer or any Participant any other conditions affecting this
Agreement, any Letter of Credit or such Participant's participation therein; and
the result of any of the foregoing is to increase the cost to such Letter of
Credit Issuer or such Participant of issuing, maintaining or participating in
any Letter of Credit, or to reduce the amount of any sum received or receivable
by such Letter of Credit Issuer or such Participant hereunder, then, upon
written demand to the applicable Borrower by such Letter of Credit Issuer or
such Participant (a copy of which notice shall be sent by such Letter of Credit
Issuer or such Participant to the Administrative Agent), accompanied by the
certificate described in the last sentence of this Section 2.05, the applicable
Borrower shall pay to such Letter of Credit Issuer or such Participant such
additional amount or amounts as will compensate such Letter of Credit Issuer or
such Participant for such increased cost or reduction. A certificate submitted
to the applicable Borrower by such Letter of Credit Issuer or such Participant,
as the case may be (a copy of which certificate shall be sent by such Letter of
Credit Issuer or such Participant to the Administrative Agent), setting forth
the basis for the determination of such additional amount or amounts necessary
to compensate such Letter of Credit Issuer or such Participant as aforesaid
shall be final and conclusive and binding on the applicable Borrower absent
manifest error, although the failure to deliver any such certificate shall not
release or diminish the applicable Borrower's obligations to pay additional
amounts pursuant to this Section 2.05 upon subsequent receipt of such
certificate.
SECTION 3. Fees; Commitments.
3.01. Fees. (a) The Borrowers agree to pay the Administrative Agent
for distribution to each Non-Defaulting Lender with a Revolving Loan Commitment
a commitment fee (the "Commitment Fee") for the period from the Initial
Borrowing Date to and including the Revolving Loan Maturity Date (or such
earlier date as the Total Revolving Loan Commitment shall have been terminated),
computed at a rate equal to 1/2 of 1% per annum on the daily Unutilized
Revolving Loan Commitment of such Non-Defaulting Lender. Accrued Commitment Fees
shall be due and payable quarterly in arrears on each Quarterly Payment Date and
on the Revolving Loan Maturity Date or such earlier date upon which the Total
Revolving Loan Commitment is terminated.
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(b) The Company, on behalf of the applicable Borrower, shall pay to
the Administrative Agent for the account of the Lenders pro rata on the basis of
their Percentages, a fee in respect of each Letter of Credit (the "Letter of
Credit Fee") computed at a rate per annum equal to the Applicable Euro Rate
Margin then in effect on the daily Stated Amount of such Letter of Credit.
Accrued Letter of Credit Fees shall be due and payable quarterly in arrears on
each Quarterly Payment Date and upon and until the first day on or after the
termination of the Total Revolving Loan Commitment upon which no Letters of
Credit remain outstanding.
(c) The Company, on behalf of the applicable Borrower, shall pay
directly to each Letter of Credit Issuer a fee in respect of each Letter of
Credit issued by such Letter of Credit Issuer (the "Facing Fee") computed at the
rate of 1/4th of 1% per annum on the daily Stated Amount of such Letter of
Credit; provided that in no event shall the annual Facing Fee with respect to
each Letter of Credit be less $500; it being agreed that, on the date of
issuance of any Letter of Credit and on each anniversary thereof prior to the
termination of such Letter of Credit, if $500 will exceed the amount of Facing
Fees that will accrue with respect to such Letter of Credit for the immediately
succeeding 12-month period, the full $500 shall be payable on the date of
issuance of such Letter of Credit and on each such anniversary thereof prior to
the termination of such Letter of Credit. Except as provided in the immediately
preceding sentence, accrued Facing Fees shall be due and payable quarterly in
arrears on each Quarterly Payment Date and upon the first day on or after the
termination of the Total Revolving Loan Commitment upon which no Letters of
Credit remain outstanding.
(d) The Company, on behalf of the applicable Borrower, shall pay
directly to each Letter of Credit Issuer upon each issuance of, payment under,
and/or amendment of, a Letter of Credit issued by such Letter of Credit Issuer
such amount as shall at the time of such issuance, payment or amendment be the
administrative charge which such Letter of Credit Issuer is customarily charging
for issuances of, payments under or amendments of, letters of credit issued by
it.
(e) The Company shall pay directly to the Alternate Currency Lender
with respect to each Alternate Currency Loan made to it by such Alternate
Currency Lender, for the account of such Alternate Currency Lender, a fronting
fee (the "Fronting Fee") for the period from and including the date of such
Alternate Currency Loan to but excluding the date of re-
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payment thereof, computed at a rate equal to 1/8th of 1% per annum on the
average daily principal amount of such Alternate Currency Loan outstanding
during the period for which such fee is calculated. Accrued Fronting Fees shall
be due and payable in the Alternate Currency quarterly in arrears on each
Quarterly Payment Date to occur after the making of the relevant Alternate
Currency Loan and on the date such Alternate Currency Loan is paid in full and
shall be nonrefundable.
(f) The Company, on behalf of the applicable Borrower, shall pay to
the Administrative Agent, for its own account, such fees as may be agreed to
from time to time between the Borrowers (or either of them) and the
Administrative Agent when and as due.
(g) All computations of Fees shall be made in accordance with
Section 12.07(b).
3.02. Voluntary Termination or Reduction of Total Unutilized
Revolving Loan Commitment. (a) Upon at least two Business Days' prior written
notice (or telephonic notice promptly confirmed in writing) to the
Administrative Agent at its Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Lenders), the Borrowers shall have the
right, at any time or from time to time, without premium or penalty, to
terminate the Total Unutilized Revolving Loan Commitments, in whole or in part,
in integral multiples of $500,000 in the case of partial reductions to the Total
Unutilized Revolving Loan Commitments; provided that each such reduction shall
apply proportionately to permanently reduce pro rata the Revolving Loan
Commitment of each Lender with such a Commitment.
(b) In the event of certain refusals by a Lender to consent to
certain proposed changes, waivers, discharges or terminations with respect to
this Agreement which have been approved by the Required Lenders as provided in
Section 12.12(b), the Borrowers (with the consent of the Administrative Agent)
shall have the right, upon five Business Days' prior written notice to the
Administrative Agent at its Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Lenders), to terminate the entire
Revolving Loan Commitment of such Lender, so long as all Loans, together with
accrued and unpaid interest, Fees and all other amounts, owing to such Lender
(including all amounts, if any, owing pursuant to Section 1.11) are repaid
concurrently with the effectiveness of such termination pursuant to Section
4.01(b) and the Borrowers shall pay to the Administrative Agent at such time an
amount in
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cash and/or Cash Equivalents equal to such Lender's applicable Percentage of the
outstanding Letters of Credit (which cash and/or Cash Equivalents shall be held
by the Administrative Agent as security for the obligations of the Borrowers
hereunder in respect of the outstanding Letters of Credit pursuant to a cash
collateral agreement to be entered into in form and substance reasonably
satisfactory to the Administrative Agent, which shall permit certain investments
in Cash Equivalents reasonably satisfactory to the Administrative Agent until
the proceeds are applied to the secured obligations) (at which time Annex I
shall be deemed modified to reflect such changed amounts), and at such time,
such Lender shall no longer constitute a "Lender" for purposes of this
Agreement, except with respect to indemnification under this Agreement
(including, without limitation, Sections 1.10, 1.11, 2.05, 4.04, 12.01 and
12.06), which shall survive as to such repaid Lender.
3.03. Mandatory Reduction of Loan Commitments. (a) The Total
Commitments (and the Commitments of each Lender) shall terminate in their
entirety on April 30, 1999 unless the Initial Borrowing Date has occurred on or
before such date.
(b) Each reduction to the Total Tranche A Term Loan Commitment, the
Total Tranche B Term Loan Commitment and the Total Revolving Loan Commitment
pursuant to this Section 3.03 (or pursuant to Section 4.01 or 4.02) shall be
applied proportionately to reduce the Term Loan Commitment or the Revolving Loan
Commitments, as the case may be, of each Lender with such a Commitment and, in
the case of the Total Tranche A Term Loan Commitment and the Total Tranche B
Term Loan Commitment, as the case may be, any such reduction thereto shall be
applied to reduce the Commitments available thereunder to each of the Company
and Essex pro rata.
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Tranche A Term Loan Commitment (and the
Tranche A Term Loan Commitment of each Lender) shall (i) terminate in its
entirety on the Initial Borrowing Date (after giving effect to the making of the
Tranche A Term Loans on such date) and (ii) prior to the termination of the
Total Tranche A Term Loan Commitment as provided in clause (i) above, be reduced
from time to time to the extent required by Section 4.02.
(d) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Tranche B Term Loan Commitment (and the
Tranche B Term Loan Commitment of each Lender) shall (i) terminate in its
entirety on the Initial
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Borrowing Date (after giving effect to the making of the Tranche B Term Loans on
such date) and (ii) prior to the termination of the Total Tranche B Term Loan
Commitment as provided in clause (i) above, be reduced from time to time to the
extent required by Section 4.02.
(e) The Revolving Loan Commitment (and the Revolving Loan Commitment
of each Lender) shall each terminate in its entirety on the Revolving Loan
Maturity Date.
(f) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on each date after the Initial Borrowing Date
upon which a mandatory prepayment of Term Loans pursuant to Section 4.02(h) is
required (and exceeds in amount the aggregate principal amount of Term Loans
then outstanding) or would be required if Term Loans were then outstanding, the
Total Revolving Loan Commitments shall be permanently reduced by such excess, if
any.
(g) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Swingline Commitment shall terminate in its
entirety on the Swingline Expiry Date.
SECTION 4. Payments.
4.01. Voluntary Prepayments. (a) The Borrowers shall have the right
to prepay the Loans, in whole or in part, without premium or penalty except as
otherwise provided in this Agreement, from time to time on the following terms
and conditions: (i) the applicable Borrower shall give the Administrative Agent
at its Notice Office written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay the Loans, whether such Loans are Term Loans
(and if so, the Tranche thereof being prepaid), Revolving Loans or Swingline
Loans, the amount of such prepayment and (in the case of Euro Rate Loans) the
specific Borrowing(s) pursuant to which such Loans were made, which notice shall
be given by the applicable Borrower prior to 11:00 A.M. (New York time) (x) at
least one Business Day prior to the date of such prepayment in the case of Loans
maintained as Base Rate Loans, (y) on the date of such prepayment in the case of
Swingline Loans and (z) at least three Business Days prior to the date of such
prepayment in the case of Euro Rate Loans, which notice shall, except in the
case of Swingline Loans, promptly be transmitted by the Administrative Agent to
each of the Lenders; (ii) each prepayment shall be in an aggregate principal
amount of at least (x) $1,000,000 (or, if less, the full amount of such
outstanding Loans) in the
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case of Term Loans, (y) $1,000,000 (or, if less, the full amount of such
outstanding Loans) in the case of Revolving Loans or (z) $1,000,000 (or, if
less, the full amount of Swingline Loans then outstanding) in the case of
Swingline Loans; provided that if any partial prepayment of Euro Rate Loans made
pursuant to any Borrowing shall reduce the outstanding Euro Rate Loans made
pursuant to such Borrowing to an amount less than (1) in the case of Term Loans,
$5,000,000 and (2) in the case of Revolving Loans, $1,000,000, then such
Borrowing may not be continued as a Borrowing of Euro Rate Loans and any
election of an Interest Period with respect thereto given by the Borrower shall
have no force or effect; (iii) prepayments of Euro Rate Loans made pursuant to
this Section 4.01 on any day other than the last day of an Interest Period
applicable thereto shall be accompanied by the amounts required under Section
1.11; and (iv) each prepayment in respect of any Loans made pursuant to a single
Borrowing shall, except as set forth below, be applied pro rata among such
Loans; provided that such prepayment shall not be applied to any Revolving Loans
of a Defaulting Lender. Each prepayment of principal of Term Loans pursuant to
this Section 4.01 shall be applied in accordance with Section 4.02(i).
(b) In the event of certain refusals by a Lender to consent to
certain proposed changes, waivers, discharges or terminations with respect to
this Agreement which have been approved by the Required Lenders as provided in
Section 12.12(b), the Borrowers shall have the right, upon five Business Days'
prior written notice to the Administrative Agent at its Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Lenders)
to repay all Loans of such Lender (including all amounts, if any, owing pursuant
to Section 1.11), together with accrued and unpaid interest, Fees and all other
amounts then owing to such Lender in accordance with said Section 12.12(b) so
long as (A) the Revolving Loan Commitment of such Lender is terminated
concurrently with such repayment pursuant to Section 3.02(b) (at which time
Annex I shall be deemed modified to reflect the changed Revolving Loan
Commitments), (B) the Borrowers shall cash collateralize such Lender's
applicable Percentage of the Letter of Credit Outstandings in accordance with
Section 3.02(b) and (C) in the case of the repayment of Revolving Loans of such
Lender, the consents required by Section 12.12(b) in connection with the
repayment pursuant to this clause (b) shall have been obtained.
4.02. Mandatory Prepayments. (a) If on any date the sum of (i) the
aggregate outstanding principal amount of Revolving Loans and Swingline Loans
(after giving effect to all
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other repayments thereof on such date) (including the Dollar Equivalent thereof
in the case of outstanding Alternate Currency Loans as determined by the
Administrative Agent pursuant to Section 12.19) plus (ii) the Letter of Credit
Outstandings on such date exceeds the Total Revolving Loan Commitment as then in
effect, the Company shall repay on such date the principal of Swingline Loans,
and if no Swingline Loans are or remain outstanding, Revolving Loans in an
aggregate amount, in either case, equal to such excess. If, after giving effect
to the prepayment of all outstanding Swingline Loans and Revolving Loans, the
aggregate amount of Letter of Credit Outstandings exceeds the Total Revolving
Loan Commitment as then in effect, the Borrowers shall pay to the Administrative
Agent on such date an amount in cash and/or Cash Equivalents equal to such
excess (up to the aggregate amount of Letter of Credit Outstandings at such
time) and the Administrative Agent shall hold such payment as security for the
obligations of the Borrowers hereunder pursuant to a cash collateral agreement
to be entered into in form and substance reasonably satisfactory to the
Administrative Agent (which shall permit certain investments in Cash Equivalents
reasonably satisfactory to the Administrative Agent until the proceeds are
applied to the secured obligations); provided that any such cash collateral
shall be released to the Borrowers at any time at which such excess shall no
longer exist. Prepayments in an amount equal to such excess are to be allocated
among Revolving Loans denominated in U.S. Dollars first and then to Alternate
Currency Loans.
(b) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the
Borrowers shall be required to repay that principal amount of Tranche A Term
Loans, to the extent then outstanding, as is set forth opposite such date (each
such repayment, as the same may be reduced as provided in Sections 4.01 and
4.02(i), a "Tranche A Term Loan Scheduled Repayment," and each such date, a
"Tranche A Term Loan Scheduled Repayment Date"):
Tranche A Term Loan Scheduled Repayment Date Amount
-------------------------------------------- ------
Quarterly Payment Date in April 1999 $10,500,000
Quarterly Payment Date in July 1999 10,500,000
Quarterly Payment Date in October 1999 10,500,000
<PAGE>
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Tranche A Term Loan Scheduled Repayment Date Amount
-------------------------------------------- ------
Quarterly Payment Date in January 2000 17,125,000
Quarterly Payment Date in April 2000 17,125,000
Quarterly Payment Date in July 2000 17,125,000
Quarterly Payment Date in October 2000 17,125,000
Quarterly Payment Date in January 2001 18,750,000
Quarterly Payment Date in April 2001 18,750,000
Quarterly Payment Date in July 2001 18,750,000
Quarterly Payment Date in October 2001 18,750,000
Quarterly Payment Date in January 2002 18,750,000
Quarterly Payment Date in April 2002 18,750,000
Quarterly Payment Date in July 2002 18,750,000
Quarterly Payment Date in October 2002 18,750,000
Quarterly Payment Date in January 2003 25,000,000
Quarterly Payment Date in April 2003 25,000,000
Quarterly Payment Date in July 2003 25,000,000
Quarterly Payment Date in October 2003 25,000,000
Quarterly Payment Date in January 2004 75,000,000
May 27, 2004 75,000,000
(c) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the
Borrowers shall be required to repay that principal amount of Tranche B Term
Loans, to the extent then outstanding, as is set forth opposite such date (each
such repayment, as the same may be reduced as provided in Sections 4.01 and
4.02(i), a "Tranche B Term Loan Scheduled Repayment," and each such date, a
"Tranche B Term Loan Scheduled Repayment Date"):
Tranche B Term Loan Scheduled Repayment Date Amount
-------------------------------------------- ------
Quarterly Payment Date in April 1999 $ 1,214,286
Quarterly Payment Date in July 1999 1,214,286
Quarterly Payment Date in October 1999 1,214,286
Quarterly Payment Date in January 2000 1,214,286
Quarterly Payment Date in April 2000 1,214,286
Quarterly Payment Date in July 2000 1,214,286
Quarterly Payment Date in October 2000 1,214,286
<PAGE>
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Tranche B Term Loan Scheduled Repayment Date Amount
-------------------------------------------- ------
Quarterly Payment Date in January 2001 1,062,500
Quarterly Payment Date in April 2001 1,062,500
Quarterly Payment Date in July 2001 1,062,500
Quarterly Payment Date in October 2001 1,062,500
Quarterly Payment Date in January 2002 1,062,500
Quarterly Payment Date in April 2002 1,062,500
Quarterly Payment Date in July 2002 1,062,500
Quarterly Payment Date in October 2002 1,062,500
Quarterly Payment Date in January 2003 1,062,500
Quarterly Payment Date in April 2003 1,062,500
Quarterly Payment Date in July 2003 1,062,500
Quarterly Payment Date in October 2003 1,062,500
Quarterly Payment Date in January 2004 37,187,500
Quarterly Payment Date in April 2004 37,187,500
Quarterly Payment Date in July 2004 37,187,500
Quarterly Payment Date in October 2004 37,187,500
Quarterly Payment Date in January 2005 63,750,000
Quarterly Payment Date in April 2005 63,750,000
Quarterly Payment Date in July 2005 63,750,000
November 27, 2005 63,750,000
(d) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date on or after the Initial
Borrowing Date on which either of the Borrowers or any of their respective
Subsidiaries receives Net Cash Proceeds from an Asset Sale or Sales (other than
a sale of Margin Stock prior to consummation of the Merger) in excess of
$5,000,000 individually or $10,000,000 in the aggregate in any consecutive
twelve month period, an amount equal to 100% of such Net Cash Proceeds shall be
applied as a mandatory repayment of principal of outstanding Loans in accordance
with the requirements of Sections 4.02(i) and (j); provided that with respect to
no more than $50,000,000 in the aggregate of such Net Cash Proceeds in any
consecutive twelve month period of the Company, such Net Cash Proceeds shall not
be required to be so applied on such date of receipt to the extent that no
Default or Event of Default then exists and the Borrowers deliver a certificate
to the Administrative Agent on or prior to such date stating that such Net Cash
Proceeds shall be used to purchase assets used or to be used in the businesses
permitted pursuant to Section 8.01 (including, without limitation (but only to
the extent permitted by Section 8.02), the purchase of
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the capital stock (or other equity interests) of a Person engaged in such
businesses) within one year following the date of receipt of such Net Cash
Proceeds from such Asset Sale (which certificate shall set forth the estimates
of the proceeds to be so expended); and provided, further, that (1) if all or
any portion of such Net Cash Proceeds are not so used (or contractually
committed to be used) within such one year period, such Net Cash Proceeds not so
used shall be applied as a mandatory repayment of principal of outstanding Loans
in accordance with the requirements of Sections 4.02(i) and (j) on the last day
of such period and (2) if all or any portion of such Net Cash Proceeds are not
so used within such one year period referred to in clause (1) above because such
amount is contractually committed to be used and subsequent to such date such
contract is terminated or expires without such portion being so used, such Net
Cash Proceeds not so used shall be applied as a mandatory repayment of principal
of outstanding Loans in accordance with the requirements of Sections 4.02(i) and
(j) on the date of such termination or expiration.
(e) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date on or after the Initial
Borrowing Date on which either of the Borrowers or any of their respective
Subsidiaries receives any cash proceeds from either (I) any incurrence of
Indebtedness (other than Indebtedness permitted to be incurred pursuant to
Section 8.04) by the Borrowers or any of their respective Subsidiaries or (II)
any Receivables Financing Agreement (to the extent that the amount made
available thereunder exceeds $150,000,000), an amount equal to 100% of the cash
proceeds (net of all underwriting discounts, fees and commissions and other
costs and expenses associated therewith) of the respective incurrence of
Indebtedness shall be applied as a mandatory repayment of principal of
outstanding Loans in accordance with the requirements of Sections 4.02(i) and
(j).
(f) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date on or after the Initial
Borrowing Date on which the Borrowers or any of their respective Subsidiaries
receives any cash proceeds from any sale or issuance of preferred or common
equity of (or cash capital contributions to) either of the Borrowers or any of
their respective Subsidiaries (other than (I) proceeds received from (t)
issuances of capital stock by the Israeli Subsidiaries, (u) sale of Margin Stock
prior to consummation of the Merger, (v) the Transaction, (w) issuances of
options to purchase Parent Common Stock to management, directors, non-employee
consultants and employees of the Parent and its
<PAGE>
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Subsidiaries, (x) issuances of Parent Common Stock (including as a result of the
exercise of any options with regard thereto) to management, directors,
non-employee consultants, and employees of the Parent and its Subsidiaries, (y)
issuance of Parent Common Stock as consideration for a Permitted Acquisition and
(z) equity contributions to any Subsidiary of the Company made by the Company or
any other Subsidiary of the Company or (II) proceeds used to permanently reduce
the amount of loans outstanding under the Floating Rate Facility), an amount
equal to the Applicable Percentage of such cash proceeds (net of all
underwriting discounts, fees and commissions and other costs and expenses
associated therewith) of the respective equity issuance or capital contribution
shall be applied as a mandatory repayment of principal of outstanding Loans in
accordance with the requirements of Sections 4.02(i) and (j).
(g) Within ten days following the date of receipt by the Borrowers
or any Subsidiary Guarantor of (i) with respect to any Mortgaged Real Property,
any Net Award in respect of any Condemnation or any Net Proceeds in respect of
any Destruction required pursuant to the applicable Mortgage to be applied to
repayment of the Loans or (ii) with respect to Collateral other than Mortgaged
Real Property, any proceeds from a Recovery Event required pursuant to the
applicable Security Document to be applied to repayment of the Loans, the
Borrowers or such Subsidiary Guarantor shall cause 100% of such Net Award, Net
Proceeds, insurance proceeds or condemnation award, as applicable, to be paid to
the Administrative Agent.
(h) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each Excess Cash Payment Date, an amount, if positive, equal to
the applicable Excess Cash Flow Percentage of Excess Cash Flow for the relevant
Excess Cash Payment Period shall be applied as a mandatory repayment of
principal of outstanding Loans in accordance with the requirements of Sections
4.02(i) and (j).
(i) Each amount required to be applied to Loans pursuant to this
Section 4 shall be applied first pro rata to each Tranche of Term Loans (with
each Tranche of Term Loans to be allocated that percentage of the amount to be
applied as is equal to a fraction (expressed as a percentage) the numerator of
which is the then outstanding principal amount of such Tranche of Term Loans and
the denominator of which is equal to the then outstanding principal amount of
all Term Loans). Any amount required to be applied to any Tranche of Term Loans
pursuant to this Section 4 shall be applied to reduce the then remaining
Scheduled Repayments of the respective Tranche pro rata
<PAGE>
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based upon the then remaining principal amount of each Scheduled Repayment, in
each case reducing the Loans Tranche incurred by each of the Company and Essex
pro rata, and, if no Term Loans remain outstanding, all such amounts shall be
applied to repay outstanding borrowings under the Revolving Loans.
Notwithstanding the above, with respect to any prepayment of Tranche B Term
Loans pursuant to clause (e), (f), (g) or (h) of this Section 4.02, each Tranche
B Term Loan Lender may waive its right to receive such payment from time to
time, in which case the amount of such prepayment so waived shall be applied to
repayment of Tranche A Term Loans in accordance with the preceding sentence.
(j) With respect to each repayment of Loans required by this Section
4.02, the Borrowers may designate the Types of Loans which are to be repaid and,
in the case of Euro Rate Loans, the specific Borrowing(s) pursuant to which such
Loans were made; provided that (i) Euro Rate Loans may be designated for
repayment pursuant to this Section 4.02 only on the last day of an Interest
Period applicable thereto unless all Euro Rate Loans with Interest Periods
ending on such date of required prepayment and all Base Rate Loans have been
paid in full; (ii) if any repayment of Euro Rate Loans made pursuant to a single
Borrowing shall reduce the outstanding Euro Rate Loans to an amount less than
the Minimum Borrowing Amount applicable to such Loan, such Borrowing shall be
immediately converted into Base Rate Loans; and (iii) each repayment of any
Loans made pursuant to a single Borrowing shall be applied pro rata among such
Loans. In the absence of a designation by the Company as described in the
preceding sentence, the Administrative Agent shall, subject to the above, make
such designation in its sole discretion with a view, but no obligation, to
minimize breakage costs owing under Section 1.11. Notwithstanding anything to
the contrary contained elsewhere in this Agreement, if on the date any required
prepayment or repayment hereunder (other than on a Maturity Date) is to be made
and as a result thereof breakage costs would become due and owing under Section
1.11, so long as no Default or Event of Default shall have occurred and be
continuing, the applicable Borrower, at its option, may, in lieu of making any
such prepayment or repayment, place any amounts which would otherwise be
required to be so prepaid or repaid in an interest-bearing cash collateral
account established with the Administrative Agent (on terms and conditions
satisfactory to the Administrative Agent) for the benefit of the Lenders until
the expiration of the Interest Periods applicable to the subject Euro Rate
Loans, at which time such amounts shall be applied to such required prepayments
or repayments, as the case may be.
<PAGE>
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(k) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, (i) all then outstanding Swingline Loans shall be repaid in full
on the Swingline Expiry Date and (ii) all then outstanding Loans shall be repaid
in full on the maturity date applicable to such Loan.
4.03. Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or under any Note shall be
made to the Administrative Agent for the ratable account of the Lenders entitled
thereto, not later than 2:00 P.M. (New York time) on the date when due and shall
be made in immediately available funds and in U.S. Dollars at the Payment
Office, it being understood that written, telex or facsimile transmission notice
by the Borrowers to the Administrative Agent to make a payment from the funds in
the Borrowers' account at the Payment Office shall constitute the making of such
payment to the extent of such funds held in such account. Any payments under
this Agreement or under any Note which are made later than 2:00 P.M. (New York
time) shall be deemed to have been made on the next succeeding Business Day.
Whenever any payment to be made hereunder or under any Note shall be stated to
be due on a day which is not a Business Day (unless otherwise provided herein),
the due date thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.
4.04. Net Payments. (a) All payments made by the Borrowers hereunder
or under any Note will be made without setoff, counterclaim or other defense
(which payment shall not be deemed a waiver by the Borrowers of any claims
arising under this Agreement). Except as provided in Section 4.04, all such
payments will be made free and clear of, and without deduction or withholding
for, any present or future taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now or hereafter imposed by any jurisdiction or
by any political subdivision or taxing authority thereof or therein with respect
to such payment (but excluding, except as provided in the second succeeding
sentence, any tax (including any franchise tax) imposed on or measured by the
net income or net profits of a Lender pursuant to the laws of the jurisdiction
in which it is organized or the jurisdiction in which the principal office or
applicable lending office of such Lender is located or any subdivision thereof
or therein) and all interest, penalties or similar liabilities with respect
thereto (all such nonexcluded taxes, levies, imposts, duties, fees, assessments
or other charges being referred to collectively as "Taxes").
<PAGE>
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If any Taxes are so levied or imposed, the Borrowers agree to pay the full
amount of such Taxes, and such additional amounts as may be necessary so that
every payment of all amounts due under this Agreement or under any Note, after
withholding or deduction for or on account of any Taxes, will not be less than
the amount provided for herein or in such Note. If any amounts are payable in
respect of Taxes pursuant to the preceding sentence, the Borrowers agree to
reimburse each Lender, upon the written request of such Lender, for taxes
imposed on or measured by the net income or net profits of such Lender pursuant
to the laws of the jurisdiction in which the principal office or applicable
lending office of such Lender is located or under the laws of any political
subdivision or taxing authority of any such jurisdiction in which the principal
office or applicable lending office of such Lender is located and for any
withholding of taxes as such Lender shall determine are payable by, or withheld
from, such Lender in respect of such amounts so paid to or on behalf of such
Lender pursuant to the preceding sentence and in respect of any amounts paid to
or on behalf of such Lender pursuant to this sentence; provided, however, that
no such reimbursement shall be required unless such Lender determines that the
amount of such Taxes exceeds the amount of any credit, allowance or deduction
allowable to such Lender as an offset against any taxes payable on behalf of
such Lender and in such event reimbursement shall not be required in any amount
greater than such excess. The Borrowers will furnish to the Administrative Agent
within 45 days after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts evidencing such payment by the
Borrowers. The Borrowers agree to indemnify and hold harmless each Lender and
the Administrative Agent, and reimburse such Lender and the Administrative Agent
upon its written request, for the amount of any Taxes so levied or imposed and
paid by such Lender or the Administrative Agent. A certificate as to the amount
of any such required indemnification payment prepared by such Lender or the
Administrative Agent shall be final, conclusive and binding for all purposes
absent manifest error.
(b) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrowers
and the Administrative Agent on or prior to the Effective Date, or in the case
of a Lender that is an assignee or transferee of an interest under this
Agreement pursuant to Section 1.13 or 12.04 (unless the respective Lender was
already a Lender hereunder immediately prior to such assignment or transfer), on
the date of such assignment or transfer to such Lender, (i) two accurate and
complete original signed copies of Internal Revenue Service Form 4224 or 1001
(or
<PAGE>
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successor forms) certifying to such Lender's entitlement to a complete exemption
from United States withholding tax with respect to payments to be made under
this Agreement and under any Note, or (ii) if the Lender is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit C (any such certificate, a
"Section 4.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Lender's entitlement to a complete exemption from United
States withholding tax with respect to payments of interest to be made under
this Agreement and under any Note. In addition, each Lender agrees that from
time to time after the Effective Date, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in any
material respect, it will deliver promptly to the Borrowers and the
Administrative Agent two new accurate and complete original signed copies of
Internal Revenue Service Form 4224 or 1001, or Form W-8 and a Section
4.04(b)(ii) Certificate, as the case may be, and such other forms as may be
required in order to confirm or establish the entitlement of such Lender to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or it shall immediately
notify the Borrowers and the Administrative Agent of its inability to deliver
any such Form or Certificate in which case such Lender shall not be required to
deliver any such Form or Certificate pursuant to this Section 4.04(b).
Notwithstanding anything to the contrary contained in Section 4.04(a), but
subject to Section 12.04(b) and the immediately succeeding sentence, (x) the
Borrowers shall be entitled, to the extent they are required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder for the account of any Lender which is
not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes to the extent that such Lender
has not provided to the Borrowers U.S. Internal Revenue Service Forms that
establish a complete exemption from such deduction or withholding and (y) the
Borrowers shall not be obligated pursuant to Section 4.04(a) hereof to gross-up
payments to be made to a Lender in respect of income withholding or similar
taxes imposed by the United States if (I) such Lender has not provided to the
Borrowers the Internal Revenue Service Forms required to be provided to the
Borrowers pursuant to this Section 4.04(b) or (II) in the case of a payment,
other than interest, to a Lender
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described in clause (ii) above, to the extent that such Forms do not establish a
complete exemption from withholding of such taxes. Notwithstanding anything to
the contrary contained in the preceding sentence or elsewhere in this Section
4.04 and except as set forth in Section 12.04(b), the Borrowers agree to pay
additional amounts and to indemnify each Lender and the Administrative Agent in
the manner set forth in Section 4.04(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any amounts
deducted or withheld by it as described in the immediately preceding sentence as
a result of any changes after the Effective Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of income or similar Taxes.
SECTION 5. Conditions Precedent to Initial Loans. The obligation of
each Lender to make each Loan to the Borrowers hereunder, and the obligation of
the Letter of Credit Issuer to issue each Letter of Credit hereunder, is
subject, at the time of each such Credit Event (except as otherwise hereinafter
indicated), to the satisfaction of the following conditions:
5.01. Execution of Agreement; Notes. On or prior to the Initial
Borrowing Date, (i) the Effective Date shall have occurred and (ii) if requested
in writing by any Lender, there shall have been delivered to the Administrative
Agent for the account of such Lender the appropriate Tranche A Term Note,
Tranche B Term Note and Revolving Note and to BTCo the Swingline Note, in each
case executed by the applicable Borrower and the Guarantors and in the amount,
maturity and as otherwise provided herein.
5.02. Officer's Certificate. On the Initial Borrowing Date, the
Administrative Agent shall have received a certificate dated such date signed by
an appropriate officer of each of the Parent, the Company and Essex, stating
that all of the applicable conditions set forth in Sections 5.05, 5.06 (deleting
the reference to the Administrative Agent therein), 5.07(a) and (b) (deleting
the reference to the Administrative Agent therein) and 5.13, as such provisions
relate to such Credit Party, exist as of such date.
5.03. Opinions of Counsel. On the Initial Borrowing Date, the
Administrative Agent shall have received opinions, addressed to the
Administrative Agent and each of the Lenders and dated the Initial Borrowing
Date, from (i) Proskauer Rose
<PAGE>
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LLP, counsel to the Company and the Parent, in the form of Exhibit D, and (ii)
local and other counsel to the Credit Parties and/or the Administrative Agent in
each jurisdiction in which the Collateral is located, which opinions shall cover
such matters incident to the transactions contemplated herein and in the other
Credit Documents as the Administrative Agent may reasonably request and shall be
in form and substance reasonably satisfactory to the Administrative Agent.
5.04. Corporate Proceedings. (a) On the Initial Borrowing Date, the
Administrative Agent shall have received from each Credit Party a certificate,
dated the Initial Borrowing Date, signed by the chairman, a vice chairman, the
president or any vice president of such Credit Party, and attested to by the
secretary or any assistant secretary of such Credit Party, in the form of
Exhibit E with appropriate insertions, together with copies of the Certificate
of Incorporation and By-Laws of such Credit Party and the resolutions of such
Credit Party referred to in such certificate and all of the foregoing (including
each such Certificate of Incorporation and By-Laws) shall be reasonably
satisfactory to the Administrative Agent.
(b) On the Initial Borrowing Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by the Credit Documents shall be reasonably
satisfactory in form and substance to the Administrative Agent, and the
Administrative Agent shall have received all information and copies of all
certificates, documents and papers, including good standing certificates,
bring-down certificates and any other records of corporate proceedings and
governmental approvals, if any, which the Administrative Agent reasonably may
have requested in connection therewith, such documents and papers, where
appropriate, to be certified by proper corporate or governmental authorities.
5.05. Approvals. (a) On or prior to the Initial Borrowing Date, all
necessary governmental (domestic and non-U.S.) and third party approvals in
connection with the Transaction, the transactions contemplated by the Credit
Documents and otherwise referred to herein or therein shall have been obtained
and remain in effect, and all applicable waiting periods shall have expired
without any action being taken by any competent authority which restrains,
prevents or imposes materially adverse conditions upon the consummation of the
Transaction, the transactions contemplated by the Documents and otherwise
referred to herein or therein. Additionally, there shall not exist any judgment,
order, injunction or other restraint issued or filed or a hearing seeking
injunctive relief or other re-
<PAGE>
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straint pending or notified prohibiting or imposing materially adverse
conditions upon the consummation of the Transaction or the making of the Loans.
(b) On or prior to the Initial Borrowing Date, all necessary
approvals in connection with the continuation of the Essex Funding Agreement,
the Essex Capital Lease Facility and the Essex Canadian Facility beyond the
Initial Borrowing Date as they are in effect as of the date hereof shall have
been obtained and remain in place and evidence thereof (in form and substance
reasonably satisfactory to the Administrative Agent) shall have been delivered
to the Administrative Agent.
5.06. Consummation of the Transaction. On the Initial Borrowing
Date, the following shall be true: (i) the Merger Agreement shall be in full
force and effect, without any waiver or amendment of any term or other condition
thereof; (ii) the Tender Offer shall have been consummated in accordance with
applicable law and in accordance with the Acquisition Documents, without any
waiver or amendment of any term or other condition thereof; (iii) the
recommendation of the Board of Directors of the Parent and Essex with respect to
the Transaction shall not have been modified in any material respect or
withdrawn; (iv) the Minimum Condition shall have been satisfied and Acquisition
Co shall have accepted for payment up to the Maximum Number of shares under the
Tender Offer and, as a result thereof, the Parent shall be able to effect the
Merger without the affirmative vote of any other Person; (v) no Change of
Control Event shall have occurred; (vi) all necessary material governmental and
third party approvals in connection with the Transaction shall have been
obtained and remain in effect, and all applicable waiting periods shall have
expired (including, without limitation, those prescribed by the
Hart-Scott-Rodino Antitrust Improvements Act of 1976), in each case, without any
action being taken by any authority which restrains, prevents or imposes
materially adverse conditions upon the consummation of the transactions
contemplated by the Loans (or which may have any such effect); (vii) each of the
Parent, the Borrowers and their respective Subsidiaries shall have no
Indebtedness outstanding except as permitted by Section 8.04; (viii) there shall
not have occurred after October 21, 1998 any material adverse change to the
syndication market for credit facilities similar in nature to the Loans and
there shall not have occurred after October 21, 1998 and be continuing a
material disruption of or material adverse change in financial, banking or
capital markets that would have a material adverse effect on the syndication of
the Loans, in each case as determined by the Administrative Agent in its
reasonable discretion; and (ix) not
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less than a majority of the board of directors of Essex International shall be
comprised of the Parent's designees and all actions (including any amendment of
the bylaws of Essex International) necessary to cause the foregoing shall have
been taken.
5.07. Essex Credit Agreement. (a) On the Initial Borrowing Date, the
commitments under the Essex Credit Agreement shall have been terminated, all
loans thereunder shall have been repaid in full, together with all accrued and
unpaid interest thereon, all accrued and unpaid fees thereon shall have been
repaid in full and all other amounts then owing pursuant to the Essex Credit
Agreement shall have been repaid in full.
(b) On the Initial Borrowing Date, all security interests and Liens
created under the Essex Credit Agreement and the related security documents on
the capital stock of, and assets (including intercompany notes) owned by, Essex
and its Subsidiaries shall have been terminated and released, and the
Administrative Agent shall have received all such releases as may have been
requested by the Administrative Agent, which releases shall be in the form and
substance reasonably satisfactory to the Administrative Agent.
(c) The Administrative Agent shall have received evidence from the
lenders under the Essex Credit Agreement in form, scope and substance reasonably
satisfactory to it that the matters set forth in this Section 5.07(a) and (b)
have been satisfied at such time.
5.08. Security Documents. (a) On the Initial Borrowing Date, each
Credit Party shall have duly authorized, executed and delivered the Amended and
Restated Pledge Agreement in the form of Exhibit F (as modified, amended or
supplemented from time to time in accordance with the terms thereof and hereof,
the "Pledge Agreement") and shall have delivered to the Collateral Agent, as
pledgee thereunder, all of the Pledged Securities referred to therein (which, in
the case of a Non-U.S. Subsidiary that is not a Guarantor, shall equal 65% of
its outstanding capital stock), endorsed in blank in the case of promissory
notes or accompanied by executed and undated stock powers in the case of capital
stock, and the Pledge Agreement shall be in full force and effect.
(b) On the Initial Borrowing Date, each Credit Party shall have duly
authorized, executed and delivered the Amended and Restated Security Agreement
in the form of Exhibit G (as
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modified, amended or supplemented from time to time in accordance with the terms
thereof and hereof, the "Security Agreement") covering all of the Security
Agreement Collateral, together with:
(1) executed copies of financing statements (Form UCC-1) or
appropriate local equivalent in proper form for filing under the UCC or
appropriate local equivalent of each jurisdiction as may be necessary to
perfect the security interests purported to be created by the Security
Agreement;
(2) executed copies of financing statement amendments or comparable
documents of, and executed by, the appropriate entities in proper form for
filing under the provisions of the UCC and applicable domestic or local
laws, rules or regulations in the jurisdictions in which financing
statements were filed in connection with the Existing Superior Credit
Agreement;
(3) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, each of a recent date listing all
effective financing statements that name any Credit Party as debtor and
that are filed in the jurisdictions referred to in clause (1) above,
together with copies of such financing statements that name any Credit
Party as debtor (none of which shall cover the Collateral except (x) those
with respect to which appropriate termination statements executed by the
secured lender thereunder have been delivered to the Administrative Agent
and (y) to the extent evidencing Permitted Liens);
(4) evidence of the completion of all other recordings and filings
of, or with respect to, the Security Agreement as may be necessary or, in
the reasonable opinion of the Collateral Agent, desirable, to perfect the
security interests purported to be created by the Security Agreement; and
(5) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable, to perfect the security
interests purported to be created by the Security Agreement have been
taken;
and the Security Agreement shall be in full force and effect.
5.09. Payment of Fees. On or before the Initial Borrowing Date and
thereafter at the time of each Credit Event
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and after giving effect thereto, all costs, fees and expenses, and all other
compensation contemplated by this Agreement or any other agreement with the
Administrative Agent or any Lender, due to the Administrative Agent or the
Lenders (including, without limitation, legal fees and expenses) shall have been
paid to the extent then due.
5.10. Conditions Relating to Mortgaged Real Properties. On or prior
to the Initial Borrowing Date, each Credit Party shall have caused to be
delivered to the Collateral Agent, on behalf of the Lenders, the following
documents and instruments:
(i) a Mortgage encumbering each Mortgaged Real Property in favor of
the Collateral Agent, for the benefit of the Lenders, duly executed and
acknowledged by the applicable Borrower or the Subsidiary Guarantor that
is the owner of or holder of an interest in such Mortgaged Real Property,
and otherwise in form for recording in the recording office of each
political subdivision or non-U.S. jurisdiction where each such Mortgaged
Real Property is situated, together with such certificates, affidavits,
questionnaires or returns as shall be required in connection with the
recording or filing thereof to create a lien under applicable law, and
such UCC-1 financing statements and other similar statements as are
contemplated by the counsel opinions described in Section 5.03 in respect
of such Mortgage, all of which shall be in form and substance reasonably
satisfactory to the Collateral Agent, and any other instruments necessary
to grant a mortgage lien under the laws of any applicable jurisdiction,
which Mortgage and financing statements and other instruments shall be
effective to create a first priority Lien on such Mortgaged Real Property
subject to no Liens other than Prior Liens applicable to such Mortgaged
Real Property;
(ii) with respect to each Mortgaged Real Property, such consents,
approvals, amendments, supplements, estoppels, tenant subordination
agreements or other instruments as necessary or required to consummate the
transactions contemplated hereby or as shall reasonably be deemed
necessary by the Collateral Agent in order for the owner or holder of the
fee interest constituting such Mortgaged Real Property to grant the Lien
contemplated by the Mortgage with respect to such Mortgaged Real Property;
(iii) with respect to each Mortgage, a policy (or commitment to
issue a policy) of title insurance insuring (or
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committing to insure) the Lien of such Mortgage as a valid first priority
Lien on the real property and fixtures described therein in an amount not
less than 115% of the fair market value thereof which policy (or
commitment) shall (a) be issued by the Title Company, (b) include such
reinsurance arrangements (with provisions for direct access) as shall be
reasonably acceptable to the Collateral Agent, (c) contain a "tie-in" or
"cluster" endorsement (if available under applicable law) (i.e., policies
which insure against losses regardless of location or allocated value of
the insured property up to a stated maximum coverage amount), (d) have
been supplemented by such endorsements (or where such endorsements are not
available, opinions of special counsel, architects or other professionals
reasonably acceptable to the Collateral Agent to the extent that such
opinions can be obtained at a cost which is reasonable with respect to the
value of the Real Property subject to such Mortgage) as shall be
reasonably requested by the Collateral Agent (including, without
limitation, endorsements on matters relating to usury, first loss, last
dollar, zoning, contiguity, revolving credit, doing business,
non-imputation, public road access, survey, variable rate and so-called
comprehensive coverage over covenants and restrictions) and (e) contain no
exceptions to title other than exceptions for the Prior Liens applicable
to such Mortgaged Real Property;
(iv) with respect to each Mortgaged Real Property, a Survey;
(v) with respect to each Mortgaged Real Property, policies or
certificates of insurance as required by the Mortgage relating thereto,
which policies or certificates shall comply with the insurance
requirements contained in such Mortgage;
(vi) with respect to each Real Property and each Mortgaged Real
Property, UCC, judgment and tax lien searches confirming that the personal
property comprising a part of such Real Property or Mortgaged Real
Property is subject to no Liens other than Prior Liens;
(vii) with respect to each Mortgaged Real Property, such affidavits,
certificates, information (including financial data) and instruments of
indemnification (including, without limitation, a so-called "gap"
indemnification) as shall be required to induce the Title Company to
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issue the policy or policies (or commitment) and endorsements contemplated
in subparagraph (iii) above;
(viii) evidence acceptable to the Collateral Agent of payment by the
Company of all title insurance premiums, search and examination charges,
survey costs and related charges, mortgage recording taxes, fees, charges,
costs and expenses required for the recording of the Mortgages and
issuance of the title insurance policies referred to in subparagraph (iii)
above;
(ix) with respect to each Mortgaged Real Property, copies of all
Leases, subleases, leases in which the Company or a Subsidiary Guarantor
holds the tenant's interest or other agreements relating to possessory
interests. To the extent any of the foregoing affect any Mortgaged Real
Property, such agreement shall be subordinate to the Lien of the Mortgage
to be recorded against such Mortgaged Real Property, either expressly by
its terms or pursuant to a subordination, non-disturbance and attornment
agreement, and shall otherwise be acceptable to the Collateral Agent;
(x) with respect to each Mortgaged Real Property, an officer's
certificate or other evidence satisfactory to the Collateral Agent that as
of the date thereof there (a) has been issued and is in effect a valid and
proper certificate of occupancy or local or non-U.S. equivalent for the
use then being made of such Mortgaged Real Property (or that none is
required under law) and that there is not outstanding any citation,
violation or similar notice indicating that such Mortgaged Real Property
contains conditions which are not in compliance with local or non-U.S.
codes or ordinances relating to building or fire safety or structural
soundness, (b) has not occurred any Taking or Destruction of any Mortgaged
Real Property and (c) are no disputes regarding boundary lines, location,
encroachment or possession of such Mortgaged Real Property and no state of
facts existing which could reasonably be expected to give rise to any such
claim.
5.11. Conditions Relating to Existing Mortgaged Real Property. With
respect to each Mortgage executed in connection with the Existing Superior
Credit Agreement, the Company shall have caused to be delivered to the
Collateral Agent, on behalf of the Secured Creditors, the following documents
and instruments:
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(a) an amendment, duly executed and acknowledged by the applicable
mortgagor under each such existing Mortgage, to secure the new Tranche A
Term Loans, Tranche B Term Loans and new Revolving Loans pari passu with
the existing Loans, in form for recording in the recording office of each
political subdivision or non-U.S. jurisdiction where each such Mortgaged
Real Property is situated, together with such certificates, affidavits,
questionnaires or returns as shall be required in connection with the
recording or filing thereof to evidence a lien under applicable law, and
such UCC-3 financing statements and other similar statements as are
contemplated by the counsel opinions described in Section 5.03 in respect
of such amendment, all of which shall be in form and substance
satisfactory to the Administrative Agent, and any other instruments
necessary in connection with such amendment, which amendment, financing
statements and other instruments, together with the applicable Mortgage,
shall when recorded, be effective to create a first priority Lien on such
Mortgaged Real Property subject to no Liens other than Prior Liens;
(b) one or more endorsements to the policy of title insurance in
respect thereof, such endorsements to provide that such policy insures, as
of the Closing Date, the Lien of such Mortgage, as amended to include the
new Tranche A Term Loans, Tranche B Term Loans and new Revolving Loans, as
a valid first mortgage Lien on the real property and fixtures described
therein and which endorsement or endorsements shall (w) be issued by the
Title Company, (x) include such reinsurance arrangements (with provisions
for direct access) as shall be reasonably acceptable to the Administrative
Agent, (y) provide such assurances as shall be reasonably requested by the
Administrative Agent and (z) contain only such exceptions to title as
shall be Prior Liens or are otherwise agreed to by the Administrative
Agent on or prior to the Closing Date with respect to such Mortgaged Real
Property;
(c) UCC, judgment and tax lien searches confirming that the personal
property located on the premises comprising a part of such Mortgaged Real
Property is subject to no Liens other than Prior Liens;
(d) such affidavits, certificates, information (including financial
data), and instruments of indemnification (including, without limitation,
a so-called "gap" indemnification) as shall be required to induce the
Title
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Company to issue the endorsements contemplated in subparagraph (b) above;
and
(e) evidence acceptable to the Administrative Agent of payment by
the appropriate Credit Party of all applicable title insurance premiums,
search and examination charges, survey costs and related costs, mortgage
recording taxes, fees, charges, costs and expenses required for the
recording of the amendment referred to subparagraph (i) above and the
issuance of the title insurance endorsements referred to in subparagraph
(ii) above.
5.12. Solvency Certificate; Evidence of Insurance. On the Initial
Borrowing Date, the Administrative Agent shall have received:
(a) one or more solvency certificates in the form of Exhibit H from
the chief financial officer of the Parent, the Company and of each
Guarantor and dated the Initial Borrowing Date, in each case, addressed to
the Administrative Agent and each Lender, and reciting that, both prior to
and after giving effect to the Transaction and the incurrence of all
financings contemplated herein, the Parent, the Company, Essex and each of
their respective Subsidiaries (on a stand-alone basis) are not and will
not be rendered insolvent or inadequately capitalized for the respective
businesses they intend to conduct and have not and will not have incurred
debts beyond their ability to pay as they mature and that, upon
consummation of the Transaction, the total assets of the Parent and the
Company exceeds the amount necessary to pay all of their liabilities and
that neither the Parent, the Company, Essex nor any of their respective
Subsidiaries is entering into the Transaction with the intent to hinder,
delay or defraud any creditor of the Parent, the Company, Essex or any of
their respective Subsidiaries; and
(b) evidence of insurance complying with the requirements of Section
7.03 for the business and properties of the Parent, the Company, Essex and
their respective Subsidiaries, in scope, form and substance reasonably
satisfactory to the Administrative Agent and naming the Collateral Agent
as an additional insured and/or loss payee, and stating that such
insurance shall not be cancelled or revised without at least 30 days' (or
10 days' in the case of non-payment of premium) prior written notice by
the insurer to the Collateral Agent.
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5.13. Margin Regulations. On the Initial Borrowing Date and after
giving effect to such Credit Event and Section 12.17 hereof, neither the making
of any Loan, nor the use of the proceeds thereof, shall have violated the
provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System.
5.14. Total Unutilized Revolving Loan Commitment. On the Initial
Borrowing Date, immediately after giving effect to such Credit Event, there
shall be Total Unutilized Revolving Loan Commitment of at least $125,000,000.
5.15. Notice of Borrowing; Letter of Credit Request. The
Administrative Agent shall have received a Notice of Borrowing satisfying the
requirements of Section 1.03 with respect to each incurrence of Loans; and the
Administrative Agent and the Letter of Credit Issuer shall have received a
Letter of Credit Request satisfying the requirements of Section 2.02 with
respect to each issuance of a Letter of Credit.
5.16. Floating Rate Facility. On the Initial Borrowing Date, all
conditions to the funding of the Floating Rate Facility shall have been
satisfied, all documentation relating thereto shall be in form and substance
satisfactory to the Administrative Agent and the funding of the Floating Rate
Facility shall occur no later than simultaneously with the incurrence of the
Loans hereunder.
5.17. Adverse Change, etc. On the Initial Borrowing Date, and after
giving effect to such Credit Event, nothing shall have occurred since June 30,
1998, in the case of Essex (but only in the case of Borrowings by Essex), and
July 31, 1998, in the case of the Parent or the Company (and neither the Lenders
nor the Administrative Agent shall have become aware of any facts or conditions
not previously known), which has, or could reasonably be expected to have, a
Material Adverse Effect.
5.18. Proceeds of the Loans. On the Initial Borrowing Date, the
Administrative Agent shall have received confirmation in writing, acceptable to
the Administrative Agent, as to the manner in which the proceeds of the Loans
will be held pending proration of the shares of Essex International common stock
accepted in the Tender Offer.
5.19. Creation of the Company. The Company shall have been duly
organized under the laws of the State of Delaware and the Parent shall have
transferred all of its assets to
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the Company (other than the capital stock of DNE Systems and insignificant
assets).
The acceptance of the benefits of each Credit Event shall constitute
a representation and warranty by each Credit Party to the Administrative Agent
and each of the Lenders that all of the applicable conditions specified above
exist as of the date of such Credit Event. All of the certificates, legal
opinions and other documents and papers referred to in this Section 5, unless
otherwise specified, shall be delivered to the Administrative Agent at its
Notice Office for the account of each of the Lenders and, except for the Notes,
in sufficient counterparts for each of the Lenders and shall be reasonably
satisfactory in form and substance to the Administrative Agent and the Required
Lenders.
SECTION 5A. Conditions Precedent to All Loans. The obligation of
each Lender to make all Loans hereunder, including, without limitation, the
initial Loans and the obligation of each Letter of Credit Issuer to issue each
Letter of Credit hereunder, is subject, at the time of each Credit Event, to the
satisfaction of the following conditions:
5.01A Adverse Change, etc. At the time of each Credit Event and
after giving effect thereto, nothing shall have occurred to the Parent, the
Company and its Subsidiaries (including Essex) (and neither the Lenders nor the
Administrative Agent shall have become aware of any facts or conditions not
previously known) which has, or could reasonably be expected to have, a Material
Adverse Effect.
5.02A Litigation. At the time of each Credit Event and after giving
effect thereto, there shall be no actions, suits or proceedings pending or
threatened (a) with respect to this Agreement or any other Document or the
Transaction or (b) which the Lenders shall have determined could reasonably be
expected to have a Material Adverse Effect.
5.03A No Default; Representations and Warranties. At the time of
each Credit Event and also after giving effect thereto, (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents in effect at such time shall
be true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Credit Event, unless stated to relate to a specific earlier date, in which case
such repre-
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sentations and warranties shall be true and correct in all material respects as
of such earlier date.
The acceptance of the benefits of each Credit Event shall constitute
a representation and warranty by each Credit Party to the Administrative Agent
and each of the Lenders that all of the applicable conditions specified above
exist as of the date of such Credit Event.
SECTION 5B. Conditions Precedent to Initial Extension of Credit to a
Subsidiary Borrower. The agreement of the Alternate Currency Lender to make the
initial extension of credit requested to be made by it to any Subsidiary
Borrower on any date is subject to the satisfaction of the following conditions
precedent:
5.01B Borrowing Subsidiary Agreement. The Administrative Agent shall
have received a borrowing subsidiary agreement for such Subsidiary Borrower
executed and delivered by the Company and such Subsidiary Borrower.
5.02B Opinions. The Administrative Agent shall have received a
satisfactory written opinion of counsel for such Subsidiary Borrower covering
such matters relating to such Subsidiary Borrower or its borrowing subsidiary
agreement as the Administrative Agent shall reasonably request.
5.03B Amendments to Other Credit Documents. In the case of the
initial extension of credit to the first Subsidiary Borrower designated
hereunder, the other Credit Documents and, to the extent necessary, the filings
made in connection therewith, shall have been amended or supplemented (and, if
necessary, such amendments or supplements shall have been recorded) as specified
by the Administrative Agent, in each case for the purpose of ensuring that the
obligations of the Subsidiary Borrowers in respect of the Alternate Currency
Loans incurred by any such Subsidiary Borrower hereunder are guaranteed, and the
guarantees thereof are secured, as applicable, by such other Credit Documents.
5.04B Other Documents. The Administrative Agent shall have received
such documents and certificates as the Administrative Agent may reasonably
request relating to the organization, existence and good standing of such
Subsidiary Borrower, the authorization of the transactions contemplated hereby
relating to such Subsidiary Borrower, appointment of an agent for service of
process and any other legal matters relating to such Subsidiary Borrower, its
borrowing subsidiary
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agreement or such transactions, all in form and substance satisfactory to the
Administrative Agent.
SECTION 6. Representations, Warranties and Agreements. In order to
induce the Lenders to enter into this Agreement and to make the Loans and issue
and/or participate in the Letters of Credit provided for herein, the Parent and
each of the Borrowers makes the following representations, warranties and
agreements with the Lenders (in each case both before and after giving pro forma
effect to the Transaction and (other than with respect to scheduling consents
required or necessary) the receipt of all required or necessary consents to the
extent that they have been received and are effective on and after the Initial
Borrowing Date), all of which shall survive the execution and delivery of this
Agreement, the making of the Loans and the issuance of the Letters of Credit
(with the occurrence of each Credit Event being deemed to constitute a
representation and warranty that the matters specified in this Section 6 are
true and correct in all material respects on and as of the date of each such
Credit Event, unless stated to relate to a specific earlier date in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date):
6.01. Corporate Status. Each of the Borrowers and the Parent and
each of their respective Subsidiaries (i) is a duly organized and validly
existing corporation in good standing under the laws of the jurisdiction of its
organization, (ii) has the requisite corporate power and authority to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage and (iii) is duly qualified and is authorized to do
business and is in good standing in all jurisdictions where it is required to be
so qualified and where the failure to be so qualified would have a Material
Adverse Effect.
6.02. Corporate Power and Authority. Each Credit Party has the
requisite corporate power and authority to execute, deliver and carry out the
terms and provisions of the Documents to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Documents to which it is a party. Each Credit Party has duly executed and
delivered each Document to which it is a party and each such Document
constitutes the legal, valid and binding obligation of such Credit Party
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally af-
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fecting creditors' rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law).
6.03. No Violation. Neither the execution, delivery or performance
by any Credit Party of the Documents to which it is a party nor compliance by
any Credit Party with the terms and provisions thereof, nor the consummation of
the transactions contemplated herein or therein, including, without limitation,
the making of any Loan or the use of the proceeds thereof, (i) after giving
effect to Section 12.17, will contravene any applicable provision of any law,
statute, rule or regulation, or any order, writ, injunction or decree of any
court or governmental instrumentality, including, without limitation, the
provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System, (ii) will conflict or be inconsistent with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or (other than pursuant to the Security Documents)
result in the creation or imposition of (or the obligation to create or impose)
any Lien upon any of the property or assets of the Parent, the Borrowers or any
of their respective Subsidiaries pursuant to the terms of, any indenture,
mortgage, deed of trust, loan agreement, credit agreement or any other material
agreement or instrument to which the Parent, the Borrowers or any of their
respective Subsidiaries is a party or by which it or any of its property or
assets are bound or to which it may be subject or (iii) will violate any
provision of the Certificate of Incorporation or By-Laws of the Parent, the
Borrowers or any of their respective Subsidiaries.
6.04. Use of Proceeds. The proceeds of the Loans (and the Floating
Rate Facility) shall be utilized as follows: (I) on the Initial Borrowing Date,
all proceeds of the Term Loans and the Floating Rate Facility and up to an
aggregate of $100,000,000 of the proceeds of the Revolving Loans shall be used
to (i) consummate the Tender Offer (including payments in respect of stock
options and settlement of certain employee rights with respect to a change of
control of Essex International) and pay fees and expenses in connection
therewith, (ii) refinance the Existing Superior Credit Agreement and (iii)
refinance up to $280,000,000 of Indebtedness of Essex incurred under the Essex
Credit Agreement and (II) on and after the Initial Borrowing Date, the proceeds
of the Revolving Loan shall be used for the general corporate purposes of the
Company and its Subsidiaries, including Essex, including for funding the
consideration required to be paid by Cables of Zion to ac-
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quire the Cvalim Assets and to provide working capital to Cvalim under the terms
contemplated by Section 8.04(n).
6.05. Governmental Approvals. All applicable waiting periods
(including, without limitation, those prescribed by the Hart-Scott-Rodino
Antitrust Improvements Act of 1976) shall have expired and except for filings
with applicable governmental authorities contemplated by the Security Documents,
all of which shall be made in accordance with such Security Documents, no order,
consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any non-U.S. or domestic
governmental or public body or authority, or any subdivision thereof, is
required to authorize or is required in connection with (i) the execution,
delivery and performance of any Document or (ii) the legality, validity, binding
effect or enforceability of any Document.
6.06. Investment Company Act; Public Utility Holding Company Act.
Neither the Parent, the Company, Essex nor any of their respective Subsidiaries
is (a) an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended,
or (b) a "holding company," or a "subsidiary company" of a "holding company," or
an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
6.07. True and Complete Disclosure. All factual information (taken
as a whole) (which term shall not include, for purposes of this Section 6.07,
the Projections or pro forma information delivered in connection herewith)
heretofore or contemporaneously furnished by or on behalf of the Parent, the
Borrowers or any of their respective Subsidiaries in writing to the
Administrative Agent or any Lender (including, without limitation, all
information contained in the Documents) for purposes of or in connection with
the Documents or any transaction contemplated therein is, and all other such
factual information (taken as a whole) hereafter furnished by or on behalf of
any such Persons in writing to the Administrative Agent or any Lender will be,
true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
material fact necessary to make such information (taken as a whole) not
misleading at such time.
6.08. Financial Condition; Financial Statements. (a) On and as of
the Initial Borrowing Date, on a pro forma
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basis after giving effect to the Transaction and to all Indebtedness incurred,
and to be incurred, and Liens created, and to be created, by each Credit Party
in connection therewith, (x) the sum of the assets, at a fair valuation (i.e.,
the amount that may be realized within a reasonable time, considered to be six
months to one year, either through collection or sale at the regular market
value, conceiving the latter as the amount that would be obtained for such
assets within such period by a capable and diligent businessperson from an
interested buyer who is willing to purchase under ordinary selling conditions),
of each of the Parent, the Borrowers and their respective Subsidiaries (on a
consolidated basis) and each of the Company and Essex (on a stand-alone basis)
will exceed its debts, (y) each Credit Party has not incurred or intended to,
nor believes that it will, incur debts beyond its ability to pay such debts as
such debts mature and (z) each Credit Party will have sufficient capital with
which to conduct its business. For purposes of this Section 6.08, "debt" means
any liability on a claim, and "claim" means (i) right to payment whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured or (ii) right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured; provided that to the extent any such "claim"
is not fixed, the amount thereof shall equal the Parent's, the Company's or
Essex's good faith estimate of the maximum amount thereof.
(b) The annual and interim financial statements previously provided
to the Administrative Agent (as to the Parent and Essex International and as to
their respective Subsidiaries on a combined basis) (including statements of
income and cash flows and changes in shareholders' equity), present fairly in
all material respects the financial condition of the relevant Persons at the
dates of said statements and the results for the periods covered thereby. All
such financial statements have been prepared in accordance with GAAP
consistently applied (other than, in the case of such interim financial
statements the absence of footnotes and normal year-end adjustments) and the
financial statements as of and for the fiscal years have been audited by and
accompanied by the opinion of Arthur Andersen LLP, independent public
accountants of the Parent, and Ernst & Young, LLP, independent public
accountants of Essex International.
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(c) Since June 30, 1998, in the case of Essex, and July 31, 1998, in
the case of the Parent or the Company, nothing has occurred that has had or
could reasonably be expected to have a Material Adverse Effect.
(d) Except as fully reflected in the financial statements described
in Section 6.08(b), the Indebtedness incurred under this Agreement and the
Floating Rate Facility and liabilities and obligations arising under the Merger
Agreement and except as set forth in Schedule 6.08 hereto, (i) there were as of
the Initial Borrowing Date (and after giving effect to any Loans made on such
date), no liabilities or obligations (excluding obligations or liabilities
incurred in the ordinary course of business, which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect)
with respect to the Parent, the Borrowers or any of their respective
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due), and (ii) neither the Parent, the Company,
Essex nor any of their respective Subsidiaries knows of any basis for the
assertion against the Parent, the Borrowers or any of their respective
Subsidiaries of any such liability or obligation which, either individually or
in the aggregate, has, or could be reasonably likely to have, a Material Adverse
Effect.
(e) The pro forma information contained in the Projections are based
on good faith estimates and assumptions made by the management of each of the
Parent and the Borrowers, and on the Initial Borrowing Date each of such
management believes that the Projections and such pro forma information were
reasonable and, in the case of the Projections, attainable under the facts and
circumstances known to such management, it being recognized by the Lenders,
however, that projections as to future events are not to be viewed as facts and
that the actual results during the period or periods covered by the Projections
may differ from the projected results and that the differences could be
material. There is no fact known to the Parent, the Borrowers or any of their
respective Subsidiaries which would have a Material Adverse Effect which has not
been disclosed herein or in such other documents, certificates and statements
furnished to the Lenders for use in connection with the transactions
contemplated hereby.
6.09. Security Interests. On and after the Initial Borrowing Date,
each of the Security Documents creates (or after the execution and delivery
thereof and, where applicable, filing and/or recording thereof will create), in
favor of the Collateral Agent for the benefit of the Secured Creditors as
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security for the Obligations, a valid and enforceable perfected security
interest in and Lien on all of the Collateral subject thereto, superior to and
prior to the rights of all third Persons, and subject to no Liens other than
Prior Liens and Liens permitted under the Security Documents. No filings or
recordings are required in order to perfect the security interests created under
any Security Document except for filings or recordings required in connection
with any such Security Document which shall have been made prior to,
contemporaneously with or promptly (but in no event longer than two (2) days)
after the Initial Borrowing Date as contemplated by Section 5.08(b) or on or
prior to the execution and delivery thereof as contemplated by Sections 7.11 and
8.14.
6.10. Transaction. At the time of consummation of the appropriate
portion of the Transaction, all consents and approvals of, and filings and
registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required to make or consummate such
portion of the Transaction shall have been obtained, given, filed or taken or
waived and are or will be in full force and effect (or effective judicial relief
with respect thereto has been obtained) except where the failure to obtain,
give, file or take would not reasonably be expected to have a Material Adverse
Affect. All applicable waiting periods with respect thereto have or, prior to
the time when required, will have, expired without, in all such cases, any
action being taken by any competent authority which restrains, prevents or
imposes material adverse conditions upon the Transaction. Additionally, there
does not exist any judgment, order or injunction prohibiting or imposing
material adverse conditions upon the Transaction or the occurrence of any Credit
Event or the performance by the Parent, the Borrowers and their respective
Subsidiaries of their obligations under the Documents and all applicable laws.
The Transaction has been consummated in accordance with the respective Documents
and all applicable laws.
6.11. Compliance with ERISA. (a) The Parent, the Borrowers, their
respective Subsidiaries and their respective ERISA Affiliates are in compliance
with all applicable provisions of ERISA and the Code and the published
regulations and interpretations thereunder with respect to all employee benefit
plans (as defined in Section 3(3) of ERISA); no Reportable Event has occurred
with respect to a Plan; no Plan is insolvent or in reorganization; the aggregate
Unfunded Current Liability of all Plans (excluding Plans without Unfunded
Current Liabilities) does not exceed $3,000,000; no Plan has an accumulated or
waived funding deficiency, has permitted decreases in its fund-
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ing standard account or has applied for a waiver of the minimum funding standard
or an extension of any amortization period within the meaning of Section 412 of
the Code; all contributions required to be made with respect to a Plan and a
Non-U.S. Pension Plan have been timely made; neither the Parent, the Borrowers
nor any Subsidiary of the Borrowers nor any ERISA Affiliate has incurred any
liability to or on account of a Plan pursuant to Section 409, 502(i), 502(l),
515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29),
4971, 4975 or 4980 of the Code or reasonably expects to incur any liability
(including any indirect, contingent or secondary liability) under any of the
foregoing Sections with respect to any Plan (other than liabilities of any ERISA
Affiliate which could not, by operation of law or otherwise, become a liability
of the Parent, the Borrowers or any of their respective Subsidiaries); no
proceedings have been instituted to terminate, or to appoint a trustee to
administer, any Plan; no condition exists which presents a material risk to the
Parent, the Borrowers or any Subsidiary of the Borrowers or any ERISA Affiliate
of incurring a liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; using actuarial assumptions and computation
methods consistent with subpart 1 of subtitle E of Title IV of ERISA, the
aggregate liabilities of the Parent, the Borrowers and their respective
Subsidiaries and their ERISA Affiliates to all Multiemployer Plans in the event
of a complete withdrawal therefrom, as of the close of the most recent fiscal
year of each such Plan ended prior to the date of the most recent Credit Event,
would not, singly or in the aggregate, result in a Material Adverse Effect; no
lien imposed under the Code or ERISA on the assets of the Parent, the Borrowers
or any Subsidiary of the Borrowers or any ERISA Affiliate exists or is
reasonably likely to arise on account of any Plan; and the Parent, the Borrowers
and their respective Subsidiaries do not maintain or contribute to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) which provides
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or any employee pension benefit plan (as defined in
Section 3(2) of ERISA) the obligations with respect to which could reasonably be
expected, singly or in the aggregate, to have a Material Adverse Effect.
(b) Each Non-U.S. Pension Plan has been maintained in compliance
with its terms and with the requirements of any and all applicable laws,
statutes, rules, regulations and orders and has been maintained, where required,
in good standing with applicable regulatory authorities. Neither the Parent, the
Borrowers nor any of their respective Subsidiaries has in-
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curred any obligation in connection with the termination of or withdrawal from
any Non-U.S. Pension Plan. The present value of the accrued benefit liabilities
(whether or not vested) under each Non-U.S. Pension Plan which is funded,
determined as of the end of the most recently ended fiscal year of the Parent,
the Company or Essex on the basis of actuarial assumptions, each of which is
reasonable, did not exceed the current value of the assets of such Non-U.S.
Pension Plan, and for each Non-U.S. Pension Plan which is not funded, the
obligations of such Non-U.S. Pension Plan are properly accrued.
(c) Notwithstanding the foregoing, the representations, warranties
and agreements contained in this Section 6.11 are qualified such that a breach
or failure thereof shall not be treated as such unless the circumstances of such
breach or failure have resulted in or are reasonably expected to result in
either (i) a Material Adverse Effect or (ii) the imposition of a lien on the
assets of the Parent, the Borrowers or any of their respective Subsidiaries.
6.12. Subsidiaries. On and as of the Initial Borrowing Date and
after giving effect to the consummation of the Transaction, (i) the Company has
no Subsidiaries other than those Subsidiaries listed on Annex VI and (ii) the
Parent does not have any direct equity interest in any Person other than the
Company, DNE Systems and Superior Trust I. Annex VI correctly sets forth, as of
the Initial Borrowing Date and after giving effect to the Transaction, the
percentage ownership (direct and indirect) of the Company in each class of
capital stock of each of its Subsidiaries (including Essex and its Subsidiaries)
and also identifies the direct owner thereof. Prior to the Initial Borrowing
Date, the Parent owned no significant assets other than the capital stock of
Acquisition Co, Superior Telecommunications and DNE Systems and, as of the
Initial Borrowing Date, the Parent owns no significant assets other than all of
the outstanding capital stock of the Company, DNE Systems and Superior Trust I
(other than, in the case of Superior Trust I, the Trust Preferred Securities).
6.13. Intellectual Property. Each of the Parent, the Borrowers and
their respective Subsidiaries owns or holds a valid license to use all the
material patents, trademarks, permits, service marks, trade names, technology,
know-how and formulas or other rights with respect to the foregoing, free from
restrictions that are materially adverse to the use thereof, that are used in
the operation of the business of the Parent, the Borrowers and each of their
respective Subsidiaries as presently conducted.
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6.14. Compliance with Statutes, etc. Each of the Parent, the
Borrowers and their respective Subsidiaries is in compliance with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or non-U.S., in respect of the conduct of its
business and the ownership of its property (provided, however, that this Section
6.14 does not apply to (i) compliance with respect to Environmental Laws, as to
which no representation is made in this Section 6.14, but which is covered by
Section 6.15 hereof, (ii) compliance with respect to Taxes, as to which no
representation is made in this Section 6.14, but which is covered by Section
6.18 hereof, (iii) compliance with respect to ERISA, as to which no
representation is made in this Section 6.14, but which is covered by Section
6.11 hereof, and (iv) compliance with respect to labor relations matters, as to
which no representation is made in this Section 6.14, but which is covered by
Section 6.17), except such noncompliance as is not likely to, individually or in
the aggregate, have a Material Adverse Effect.
6.15. Environmental Matters. Except as set forth in Schedule 6.15 or
as could not reasonably be expected to have a Material Adverse Effect: (a) Each
of the Parent, the Borrowers and their respective Subsidiaries, and their
respective businesses and Real Property, has complied with, and on the date of
each Credit Event is in compliance with, all applicable Environmental Laws and
the requirements of any permits, licenses or other authorizations issued under
such Environmental Laws. There are no pending or past or, to the best knowledge
of the Parent, the Borrowers and their respective Subsidiaries, threatened
Environmental Claims against the Parent, the Borrowers or any of their
respective Subsidiaries or any Real Property currently or formerly owned or
operated by the Parent, the Borrowers or any of their respective Subsidiaries.
There are no facts, circumstances, conditions or occurrences on any Real
Property currently or formerly owned or operated by the Parent, the Borrowers or
any of their respective Subsidiaries or, to the best knowledge of the Parent,
the Borrowers and their respective Subsidiaries, on any property adjoining or in
the vicinity of any such Real Property that would reasonably be expected (i) to
form the basis of an Environmental Claim against the Parent, the Borrowers or
any of their respective Subsidiaries or any such Real Property or (ii) to cause
any such Real Property to be subject to any restrictions on the ownership,
occupancy, use or transferability of such Real Property by the Parent, the
Borrowers or any of their respective Subsidiaries under any applicable
Environmental Law.
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(b) Except as set forth in Schedule 6.15, Hazardous Materials have
not at any time been generated, used, treated or stored on, or transported to or
from, any Real Property currently or formerly owned or operated by the Parent,
the Borrowers or any of their respective Subsidiaries where such generation,
use, treatment or storage has violated or could reasonably be expected to
violate any Environmental Law. Hazardous Materials have not at any time been
Released on or from any Real Property currently or formerly owned or operated by
the Parent, the Borrowers or any of their respective Subsidiaries. There are not
now any underground storage tanks or related piping located on any Real Property
currently owned or operated by the Parent, the Borrowers or any of their
respective Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section 6.15,
the representations and warranties made in this Section 6.15 shall only be
untrue if either the individual or aggregate effect of all conditions, failures,
noncompliances, Environmental Claims, Releases and presence of underground
storage tanks or related piping, in each case of the types described above,
could reasonably be expected to have a Material Adverse Effect.
6.16. Properties. All Real Property owned by the Parent, the
Borrowers or any of their respective Subsidiaries and all material Leaseholds of
the Parent, the Borrowers or any of their respective Subsidiaries, in each case
as of the Initial Borrowing Date and after giving effect to the Transaction, and
the nature of the interest therein, is correctly set forth in Annex IV. Each of
the Parent, the Borrowers and their respective Subsidiaries has good and
marketable title to, or a validly subsisting leasehold interest in, all material
properties owned or leased by it, including all Real Property reflected in Annex
IV or in the financial statements referred to in Section 6.08(b), free and clear
of all Liens, other than Liens which are (x) in the case of Mortgaged Real
Property, Prior Liens and Liens permitted by the applicable Mortgage and (y) in
the case of other Real Property, Permitted Liens.
6.17. Labor Relations. Neither the Parent, the Borrowers nor any of
their respective Subsidiaries is engaged in any unfair labor practice that could
reasonably be expected to have a Material Adverse Effect. There is (i) no unfair
labor practice complaint pending against the Parent, the Borrowers or any of
their respective Subsidiaries or threatened against any of them, before the
National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under any
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collective bargaining agreement is so pending against the Parent, the Borrowers
or any of their respective Subsidiaries or, to the best knowledge of the Parent,
the Borrowers or any of their respective Subsidiaries, threatened against any of
them, (ii) no strike, labor dispute, slowdown or stoppage pending against the
Parent, the Borrowers or any of their respective Subsidiaries or threatened
against the Parent, the Borrowers or any of their respective Subsidiaries and
(iii) no union representation question existing with respect to the employees of
the Parent, the Borrowers or any of their respective Subsidiaries and no union
organizing activities are taking place, except (with respect to any matter
specified in clause (i), (ii) or (iii) above, either individually or in the
aggregate) such as is not reasonably likely to have a Material Adverse Effect.
6.18. Tax Returns and Payments. All Federal, material state and
other material returns, statements, forms and reports for taxes (the "Returns")
required to be filed by or with respect to the income, properties or operations
of the Parent, the Borrowers and/or any of their respective Subsidiaries have
been timely filed with the appropriate taxing authority. The Returns accurately
reflect all liability for taxes of the Parent, the Borrowers and their
respective Subsidiaries for the periods covered thereby. The Parent, the
Borrowers and each of their respective Subsidiaries have paid all taxes payable
by them other than immaterial taxes and other taxes which are not yet due and
payable, and other than taxes contested in good faith and for which adequate
reserves have been established in accordance with GAAP. Except as disclosed in
the financial statements referred to in Section 6.08(b) or Schedule 6.18, (a)
there is no material action, suit, proceeding, investigation, audit or claim now
pending or threatened by any authority regarding any taxes relating to the
Parent, the Borrowers or any of their respective Subsidiaries and (b) neither
the Parent, the Borrowers nor any of their respective Subsidiaries (nor any
other person on their behalf or as part of a consolidated group) has entered
into an agreement or waiver or been requested to enter into an agreement or
waiver extending any statute of limitations relating to the payment or
collection of taxes of the Parent, the Borrowers or any of their respective
Subsidiaries, or is aware of any circumstances that would cause the taxable
years or other taxable periods of the Parent, the Borrowers or any of their
respective Subsidiaries not to be subject to the normally applicable statute of
limitations. Neither the Parent, the Borrowers nor any of their respective
Subsidiaries (nor any other person on their behalf or as part of a consolidated
group) has provided, with respect to themselves or property held by them, any
consent under Sec-
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tion 341 of the Code. Neither the Parent, the Borrowers nor any of their
respective Subsidiaries has incurred, or will incur, any material tax liability
in connection with the Transaction and the other transactions contemplated
hereby.
6.19. Year 2000. All Information Systems and Equipment are either
Year 2000 Compliant, or any reprogramming, remediation, or any other corrective
action, including the internal testing of all such Information Systems and
Equipment, will be completed by September 30, 1999. Further, to the extent that
such reprogramming/remediation and testing action is required, the cost thereof,
as well as the cost of the reasonably foreseeable consequences of failure to
become Year 2000 Compliant, to the Parent, the Borrowers and their respective
Subsidiaries (including, without limitation, reprogramming errors and the
failure of other systems or equipment) will not result in a Material Adverse
Effect.
SECTION 7. Affirmative Covenants. Each of the Borrowers and the
Parent hereby covenants and agrees that as of the Initial Borrowing Date and
thereafter for so long as this 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 and Unpaid Drawings, 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:
7.01. Information Covenants. The Parent and the Company will furnish
to each Lender:
(a) Monthly Reports. Within 30 days after the end of each fiscal
month of the Parent commencing with the fiscal month in which the Initial
Borrowing Date occurs (other than the end of a fiscal quarter or fiscal
year), the consolidated and consolidating balance sheet of the Parent and
its Subsidiaries as at the end of such fiscal month and the related
consolidated and consolidating statements of income and statements of cash
flows for such fiscal month and for the elapsed portion of the fiscal year
ended with the last day of such fiscal month, in each case setting forth
comparative figures for the corresponding periods in the prior fiscal year
(sales to be broken
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down by the original equipment manufacturer, communications and electrical
business segments) and comparable budgeted figures for the current fiscal
month and year-to-date results, all of which shall be certified by the
chief financial officer or other Authorized Officer of the Parent, subject
to normal year-end audit adjustments and the absence of footnotes.
(b) Quarterly Financial Statements. Within 45 days after the close
of each of the first three quarterly accounting periods in each fiscal
year of the Parent commencing with the fiscal quarter in which the Initial
Borrowing Date occurs, the consolidated and consolidating balance sheet of
the Parent and its Subsidiaries as at the end of such quarterly accounting
period and the related consolidated and consolidating statements of
income, statements of changes in stockholders equity and statements of
cash flows for such quarterly accounting period and for the elapsed
portion of the fiscal year ended with the last day of such quarterly
accounting period, in each case setting forth comparative figures for the
corresponding period in the prior fiscal year (sales to be broken down by
the original equipment manufacturer, communications and electrical
business segments), and comparative budgeted figures for the current
fiscal quarter and year-to-date results, all of which shall be in
reasonable detail and certified by the chief financial officer or other
Authorized Officer of the Parent that they fairly present in all material
respects the financial condition of the Parent and its Subsidiaries as of
the dates indicated and the results of their operations and changes in
their cash flows for the periods indicated, subject to normal year-end
audit adjustments and the absence of footnotes.
(c) Annual Financial Statements. Within 90 days after the close of
each fiscal year (or, if the Parent changes its fiscal year end, the
"stub" period resulting therefrom) of the Parent commencing with the
fiscal year in which the Initial Borrowing Date occurs, the consolidated
and consolidating balance sheet of the Parent and its Subsidiaries as at
the end of such fiscal year and the related consolidated and consolidating
statements of income, statements of changes in stockholders equity and
statements of cash flows (sales to be broken down by the original
equipment manufacturer, communications and electrical business segments)
for such fiscal year and setting forth comparative consolidated figures
for the preceding fiscal year and comparable budgeted figures for the
cur-
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rent fiscal year and (except for such comparable budgeted figures and the
sales breakdown referred to above) certified (in the case of consolidated
information) by Arthur Andersen LLP or such other independent certified
public accountants of recognized national standing as shall be reasonably
acceptable to the Administrative Agent, in each case to the effect that
such statements fairly present in all material respects the financial
condition of the Parent and its Subsidiaries as of the dates indicated and
the results of their operations and cash flows, together with a
certificate of such accounting firm stating that in the course of its
regular audit of the business of the Parent and its Subsidiaries, which
audit was conducted in accordance with generally accepted auditing
standards, no Default or Event of Default which has occurred and is
continuing has come to their attention insofar as such Default or Event of
Default relates to financial and accounting matters or, if such a Default
or an Event of Default has come to their attention a statement as to the
nature thereof.
(d) Budgets, etc. No more than 60 days after the commencement of
each fiscal year of the Parent, budgets of and for the Parent and its
Subsidiaries in reasonable detail for each of the four fiscal quarters of
such fiscal year and an annual budget for the immediately succeeding
fiscal year, in each case as customarily prepared by management for its
internal use setting forth, with appropriate discussion, the principal
assumptions upon which such budgets are based. Together with each delivery
of financial statements pursuant to Section 7.01(b) and (c), a comparison
of the current year to date financial results (other than in respect of
the balance sheets included therein) against the budgets required to be
submitted pursuant to this clause (d) shall be presented.
(e) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Section 7.01(b) and (c), a
certificate of the chief financial officer or other Authorized Officer of
the Parent and the Company to the effect than no Default or Event of
Default exists or, if any Default or Event of Default does exist,
specifying the nature and extent thereof, which certificate shall (x) set
forth the calculations required to establish whether the Parent and the
Company and its Subsidiaries were in compliance with the provisions of
Sections 8.04(i) and (n), 8.05(d), (g), (k) and (q), 8.06, 8.08, 8.09,
8.10 and 8.11, as at the end of such fiscal
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quarter or fiscal year, as the case may be, and (y) if delivered with the
financial statements required by Section 7.01(c), set forth the amount of
Excess Cash Flow for the respective Excess Cash Payment Period.
(f) Notice of Default or Litigation. Promptly, and in any event
within five Business Days (or 10 Business Days in the case of clause (y)
below) after any executive or senior officer of the Parent or the Company
obtains actual knowledge thereof, notice of (x) the occurrence of any
event which constitutes a Default or an Event of Default, which notice
shall specify the nature thereof, the period of existence thereof and what
action the Parent or the Company proposes to take with respect thereto and
(y) the commencement of, or threat of, any litigation or governmental
proceeding pending against the Parent or the Company or any of its
Subsidiaries which is reasonably likely to have a Material Adverse Effect,
or a material adverse effect on the ability of any Credit Party to perform
its respective obligations hereunder or under any other Credit Document.
(g) Auditors' Reports. Promptly upon receipt thereof, a copy of each
report or "management letter" submitted to the Parent or any of its
Subsidiaries by its independent accountants in connection with any annual,
interim or special audit made by them of the books of the Parent or any of
its Subsidiaries.
(h) Environmental Matters. Promptly, and in any event, within five
Business Days after obtaining knowledge of any of the following (but only
to the extent that any of the following, either individually or in the
aggregate, could have a Material Adverse Effect), written notice of:
(i) any pending or threatened Environmental Claim against the
Parent or any of its Subsidiaries or any Real Property currently or
formerly owned or operated by the Parent or any of its Subsidiaries;
(ii) any condition or occurrence on any Real Property
currently or formerly owned or operated by the Parent or any of its
Subsidiaries that (x) results in material noncompliance by the
Parent or any of its Subsidiaries with any applicable Environmental
Law or (y) could reasonably be anticipated to form the basis of an
Environmental Claim against the Par-
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ent or any of its Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property
currently or formerly owned or operated by the Parent or any of its
Subsidiaries that could reasonably be anticipated to cause such Real
Property to be subject to any material restrictions on the
ownership, occupancy, use or transferability by the Parent or any of
its Subsidiaries, as the case may be, of its interest in such Real
Property under any Environmental Law; and
(iv) the taking of any material removal, remedial corrective
or other response action in response to the actual or alleged
presence of any Hazardous Material on any Real Property currently or
formerly owned or operated by the Parent or any of its Subsidiaries.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal, remedial,
corrective or other response action and the Parent's response thereto. In
addition, the Parent agrees to provide the Lenders with copies of all
material written communications by or to the Parent or any of its
Subsidiaries with or from any Person, government or governmental agency
relating to any of the matters set forth in clauses (i)-(iv) above, and
such detailed reports relating to any of the matters set forth in clauses
(i)-(iv) above as may reasonably be requested by the Administrative Agent
or the Required Lenders.
(i) Other Information. Promptly upon transmission thereof, copies of
any filings and registrations with, and reports to, the SEC by the Parent
or any of its Subsidiaries and copies of all financial statements, proxy
statements, notices and reports as the Parent or any of its Subsidiaries
shall send generally to analysts or the holders of their capital stock in
their capacity as such holders (to the extent not theretofore delivered to
the Lenders pursuant to this Agreement) and, with reasonable promptness,
such other information or documents (financial or otherwise) as the
Administrative Agent on its own behalf or on behalf of the Required
Lenders may reasonably request from time to time.
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7.02. Books, Records and Inspections. The Parent will, and will
cause each of its Subsidiaries to, permit, upon notice to the chief financial
officer or other Authorized Officer of the Parent, officers and designated
representatives of the Administrative Agent or the Required Lenders to visit and
inspect any of the properties or assets of the Parent and any of its
Subsidiaries in whomsoever's possession, and to examine the books of account of
the Parent and of any of its Subsidiaries and discuss the affairs, finances and
accounts of the Parent and of any of its Subsidiaries with, and be advised as to
the same by, their officers and independent accountants, all at such reasonable
times and intervals and to such reasonable extent as the Administrative Agent or
the Required Lenders may desire.
7.03. Insurance. The Parent will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance with
reputable and solvent insurance carriers in such amount, covering such risks and
liabilities and with such deductibles or self-insured retentions as are in
accordance with normal industry practice and as required pursuant to the
Security Documents. Each of the Borrowers and the Parent will furnish to the
Administrative Agent on the Initial Borrowing Date and on each such later date
as the Administrative Agent or the Required Lenders may reasonably request a
summary of the insurance carried in respect of the Parent, the Borrowers and
their respective Subsidiaries and the assets of the Parent, the Borrowers and
their respective Subsidiaries together with certificates of insurance and other
evidence of such insurance, if any, naming the Collateral Agent as an additional
insured and/or loss payee as required pursuant to the Security Documents.
7.04. Payment of Taxes. The Parent will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which material
penalties attach thereto, and all lawful claims for sums that have become due
and payable which, if unpaid, might become a Lien not otherwise permitted under
Section 8.03(a) or charge upon any properties of the Parent or any of its
Subsidiaries; provided that neither the Parent nor any of its Subsidiaries shall
be required to pay any such tax, assessment, charge, levy or claim which is
being contested in good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto in accordance with GAAP.
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7.05. Corporate Franchises. The Parent will do, and will cause each
of its Subsidiaries to do, or cause to be done, all things necessary to preserve
and keep in full force and effect its existence and its material rights,
franchises and authority to do business; provided, however, that any transaction
permitted by Section 8.02 will not constitute a breach of this Section 7.05.
7.06. Compliance with Statutes, etc. The Parent will, and will cause
each of its Subsidiaries to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or non-U.S., in respect of the conduct of its business and the
ownership of its property (provided, however, that this Section 7.06 does not
apply to applicable statutes, regulations, orders and restrictions relating to
environmental standards and controls, as to which no covenant is made in this
Section 7.06, but which are referred to in Section 7.07 hereof) except for such
noncompliance as would not, singly or in the aggregate, have a Material Adverse
Effect or a material adverse effect on the ability of any Credit Party to
perform its obligations under any Credit Document to which it is a party.
7.07. Compliance with Environmental Laws. (a) The Parent will pay,
and will cause each of its Subsidiaries to pay, all costs and expenses incurred
by it in keeping in compliance in all material respects with, and avoiding
liability under, all Environmental Laws, and will keep or cause to be kept all
Real Properties owned or operated by the Parent or any of its Subsidiaries free
and clear of any Liens imposed pursuant to such Environmental Laws; and (b)
neither the Parent nor any of its Subsidiaries will generate, use, treat, store,
release or dispose of, or permit the generation, use, treatment, storage,
release or disposal of, Hazardous Materials on any Real Property owned or
operated by the Parent or any of its Subsidiaries, or transport or permit the
transportation of Hazardous Materials to or from any such Real Property, where
the failure to comply with clause (a) above, either individually or in the
aggregate, could reasonably be expected to result in a material liability to the
Parent or any Subsidiary of the Parent or the failure to comply with clause (b)
above, either individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. If the Parent or any of its Subsidiaries,
or any tenant or occupant of any Real Property owned or operated by the Parent
or any of its Subsidiaries, causes or permits any intentional or unintentional
act or omission resulting in, or otherwise discovers, the presence or Release of
any Hazardous Material (except in compliance with
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applicable Environmental Laws), the Parent agrees to undertake, and/or to cause
any of its Subsidiaries, tenants or occupants to undertake, promptly and at
their sole expense, any clean up, investigation, removal, remedial, corrective
or other action required pursuant to Environmental Laws to investigate, remove
or cleanup any Hazardous Materials from any Real Property where the failure to
do so, either individually or in the aggregate, could reasonably be expected to
result in a material liability to the Parent or any Subsidiary of the Parent;
provided that neither the Parent nor any of its Subsidiaries shall be required
to comply with any such order or directive which is being contested in good
faith and by proper proceedings so long as it has maintained adequate reserves
with respect to such compliance to the extent required in accordance with GAAP.
7.08. ERISA. As soon as possible and, in any event, within 30 days
after the Parent knows or has reason to know of the occurrence of any of the
following events to the extent that one or more of such events is reasonably
likely to result in a material liability to the Parent or any Subsidiary of the
Parent, the Parent will deliver to each of the Lenders a certificate of the
chief financial officer or other Authorized Officer of the Parent setting forth
details as to such occurrence and the action, if any, which the Parent, such
Subsidiary or such ERISA Affiliate is required or proposes to take, together
with any notices required or proposed to be given to or filed with or by the
Parent, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the
Plan administrator with respect thereto: that a Reportable Event has occurred;
that an accumulated funding deficiency (as such term is defined in Section
412(a) of the Code) has been incurred or an application is reasonably expected
to be or has been made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard (including any required installment
payments) or an extension of any amortization period under Section 412 of the
Code with respect to a Plan; that a contribution required to be made to a Plan
or Non-U.S. Pension Plan has not been timely made; that a Plan has been or is
reasonably expected to be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; that a Plan has an Unfunded Current Liability
giving rise to a lien under ERISA or the Code; that proceedings are reasonably
expected to be or have been instituted to terminate or appoint a trustee to
administer a Plan; that a proceeding has been instituted pursuant to Section 515
of ERISA to collect a delinquent contribution to a Plan; that the Parent, any
Subsidiary of the Parent or any ERISA Affiliate will or is reasonably expected
to incur any material liability (including any contingent or secondary
liability) to or on ac-
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count of the termination of or withdrawal from a Plan under Section 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section
401(a)(29), 4971, 4975 or 4980 of the Code or Section 409, 502(i) or 502(l) of
ERISA; or that the Parent or any Subsidiary of the Parent has or is reasonably
expected to incur any material liability under any employee welfare benefit plan
(within the meaning of Section 3(l) of ERISA) that provides benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or any employee pension benefit plan (as defined in Section 3(2) of
ERISA). At the request of any Lender, the Parent will deliver to such Lender a
complete copy of the annual report (Form 5500) of each Plan required to be filed
with the Internal Revenue Service. In addition to any certificates or notices
delivered to the Lenders pursuant to the first sentence hereof, at the request
of the Administrative Agent or any Lender, copies of annual reports and any
notices received by the Parent or any Subsidiary of the Parent or any ERISA
Affiliate with respect to any Plan or Non-U.S. Pension Plan shall be delivered
to the Lenders no later than 30 days after the date such report has been filed
with the Internal Revenue Service or received by the Parent or the Subsidiary or
the ERISA Affiliate.
7.09. Good Repair. The Parent will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used in its
business are kept in good repair, working order and condition, normal wear and
tear and damage by casualty excepted, and, subject to Section 8.08, that from
time to time there are made in such properties and equipment all needful and
proper repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto, to the extent and in the manner useful or customary for
companies in similar businesses.
7.10. End of Fiscal Years; Fiscal Quarters. The Parent will, for
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years to end on or about April 30th of each year and (ii)
each of its, and each of its Subsidiaries', fiscal quarters to end on or about
July 31st, October 31st and January 31st of each year; provided that the Parent
may change such fiscal year to any other fiscal year period of twelve
consecutive months with the consent of the Administrative Agent (which consent
shall not unreasonably be withheld).
7.11. Additional Security; Further Assurances. (a) Promptly, and in
any event within 30 days after the acquisition
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of assets of the type that would have constituted Collateral (if the person
acquiring such assets had executed an appropriate Security Document on the
Initial Borrowing Date) at the Initial Borrowing Date (the "Additional
Collateral"), the Borrowers will, and will cause each of the Guarantors to, at
the request of the Collateral Agent following consultation with the Company as
to the value of any such Additional Collateral, take all necessary action,
including entering into the appropriate security documents and filing the
appropriate financing statements under the provisions of the UCC or applicable
non-U.S., domestic or local laws, rules or regulations in each of the offices
where such filing is necessary or appropriate to grant the Collateral Agent a
perfected Lien in such Collateral (or comparable interest under non-U.S. law in
the case of non-U.S. Collateral) pursuant to and to the full extent required by
the Security Documents and this Agreement; provided that no such action will be
required of the Borrowers or any Guarantor to the extent that any such
Additional Collateral is subject to a preexisting agreement which prohibits the
granting of any additional liens; provided, further, that such preexisting
agreement was not entered into in connection with, or in anticipation of or
contemplation of, the acquisition of such assets by the Borrowers or any of
their respective Subsidiaries. In the event that the Borrowers or a Guarantor
acquires an interest in additional real property or the Collateral Agent shall,
in its reasonable discretion, require the Borrowers or a Guarantor to grant to
the Collateral Agent a security interest and mortgage lien on any Real Property
not constituting Mortgaged Real Property on the Initial Borrowing Date
(following consultation with the Company as to the value of any such Real
Property), the Borrowers or such Guarantor, as the case may be, will take such
actions and execute such documents as the Collateral Agent shall require to
confirm the Lien of a Mortgage, if applicable, or to create a new Mortgage
(including, without limitation, satisfaction of the conditions set forth in
Sections 5.03 and 5.10). All actions taken by the parties in connection with the
pledge of Additional Collateral, including, without limitation, reasonable costs
of counsel for the Collateral Agent, shall be for the account of the Company,
which shall pay all sums due on demand.
(b) The Borrowers will, and will cause each of the Guarantors to, at
the expense of the Company, make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, real property surveys, reports
and other assurances or instruments
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and take such further steps relating to the Collateral covered by any of the
Security Documents as the Collateral Agent may reasonably require. Furthermore,
the Borrowers shall cause to be delivered to the Collateral Agent such opinions
of counsel, title insurance and other related documents as may be reasonably
requested by the Collateral Agent to assure themselves that this Section 7.11
has been complied with.
(c) If the Collateral Agent or the Required Lenders determine (and
so advise the Company) that they are required by law or regulation to have
appraisals prepared in respect of the Real Property of the Borrowers and their
respective Subsidiaries constituting Collateral, the Company shall provide to
the Collateral Agent appraisals which satisfy the applicable requirements of the
Real Estate Appraisal Reform Amendments of the Financial Institution Reform,
Recovery and Enforcement Act of 1989 and which shall be in form and substance
reasonably satisfactory to the Collateral Agent.
(d) The Borrowers agree that each action required above by this
Section 7.11 shall be completed within 60 days after such action is either
requested to be taken by the Collateral Agent or the Required Lenders or
required to be taken by the Borrowers or any Guarantor pursuant to the terms of
this Section 7.11; provided that in no event shall the Borrowers or any of their
respective Subsidiaries be required to take any action, other than using its
best efforts, to obtain consents from third parties with respect to its
compliance with this Section 7.11.
(e) Within 90 days of the Initial Borrowing Date (unless otherwise
agreed to by the Collateral Agent following consultation with the Company as to
the value of the assets owned by any such Subsidiary), the Borrowers shall cause
the Loans (to the extent the proceeds thereof are made available to Non-U.S.
Subsidiaries) to be guaranteed by such Subsidiaries and secured with the assets
of such Subsidiaries (in each case, solely to the extent the proceeds thereof
are made available to Non-U.S. Subsidiaries), all on terms and conditions, and
subject to release provisions, agreed to by the Administrative Agent.
(f) Within 90 days of the Initial Borrowing Date, the Borrowers
shall provide legal opinions (or other documentation) satisfactory to the
Administrative Agent to confirm the perfection of a first priority security
interest in the capital stock of the Non-U.S. Subsidiaries (other than the
Non-U.S. Subsidiaries organized under the laws of Barbados and Mauri-
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tius) whose shares are required to be pledged on the Initial Borrowing Date
pursuant to Section 5.08(a).
(g) As soon as possible but in no event later than one year after
the Initial Borrowing Date, the Company shall, and shall cause each of its
applicable Subsidiaries to, obtain and deliver to the Collateral Agent, counsel
to the Collateral Agent and the Title Company, with respect to the Mortgaged
Real Properties located in (i) Fort Wayne, Indiana, (ii) Columbia City, Indiana,
(iii) Hoisington, Kansas, (iv) Pauline, Kansas, (v) Anaheim, California and (vi)
Tiffin, Ohio, a Survey sufficient to cause the Title Company to (A) remove the
survey and unrecorded easements exceptions from and (B) issue access, contiguity
(if applicable), survey and so-called comprehensive endorsements to the title
commitments and/or title policies covering such Mortgaged Real Properties.
7.12. Register. The Company hereby designates the Administrative
Agent to serve as the Company's agent, solely for purposes of this Section 7.12,
to maintain a register (the "Register") on which it will record the Commitments
from time to time of each of the Lenders, the Loans made by each of the Lenders
and each repayment in respect of the principal amount of the Loans of each
Lender. Failure to make any such recordation, or any error in such recordation
shall not affect the Company's obligations in respect of such Loans. With
respect to any Lender, the transfer of the Loan Commitments of such Lender and
the rights to the principal of, and interest on, any Loan made pursuant to such
Commitments shall not be effective until such transfer is recorded on the
Register maintained by the Administrative Agent with respect to ownership of
such Commitments and Loans and prior to such recordation all amounts owing to
the transferor with respect to such Commitments and Loans shall remain owing to
the transferor. The registration of assignment or transfer of all or part of any
Commitments and Revolving Loans shall be recorded by the Administrative Agent on
the Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
12.04(b). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Lender shall surrender the Note
evidencing such Loan, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Lender and/or
the new Lender. The Company and the Parent jointly and severally agree to
indemnify the Administrative Agent from and
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against any and all losses, claims, damages and liabilities of whatsoever nature
which may be imposed on, asserted against or incurred by the Administrative
Agent in performing its duties under this Section 7.12, except to the extent
that any such losses, claims, damages or liabilities are found to have resulted
from the gross negligence or willful misconduct of the Administrative Agent.
7.13. Interest Rate Protection Agreements. The Company and the
Parent will maintain, commencing no later than ninety days after the Initial
Borrowing Date, in full force and effect Interest Rate Protection Agreements
with parties reasonably acceptable to the Administrative Agent on no less than
50% of the principal amount of the Term Loans.
7.14. Year 2000. The Borrowers and the Parent will ensure that their
Information Systems and Equipment are at all times after September 30, 1999 Year
2000 Compliant, except insofar as the failure to do so will not result in a
Material Adverse Effect, and shall notify the Administrative Agent and any
Lender promptly upon detecting any material failure of the Information Systems
and Equipment to be Year 2000 Compliant. In addition, the Borrowers and the
Parent shall provide the Administrative Agent and any Lender with such
information about their year 2000 computer readiness (including, without
limitation, information as to contingency plans, budgets and testing results) as
the Administrative Agent or such Lender shall reasonably request.
SECTION 8. Negative Covenants. Each of the Borrowers and the Parent
hereby covenants and agrees that as of the Initial Borrowing Date and thereafter
for so long as this 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
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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, 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 (including without limitation capital stock of any Subsidiary of the
Company) (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;
(c) the Investments permitted pursuant to Section 8.05;
(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
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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 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
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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 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, (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, 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 Subsidi-
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ary being the surviving corporation of such merger), and in any case, all
of the provisions of Section 8.14 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, 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)) 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 Administrative Agent 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 does not exceed $25,000,000;
(r) (I) the purchase of the Cvalim Assets by the Israeli
Subsidiaries for an aggregate consideration plus re-
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lated 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(q) or
(x) through Indebtedness incurred by the Israeli Subsidiaries or (y)
through an intercompany loan made to the Israeli Subsidiaries by the
Company and/or any of its Subsidiaries that is a Guarantor, 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) 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) through the
investment of 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 financial support is
provided, directly or
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indirectly, thereby by the Parent, the Company or the other Subsidiaries
of the Company except to the extent such support would be permitted by
Section 8.05(p) as an Investment.
To the extent the Required Lenders waive the provisions of this Section 8.02
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,
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 Administrative
Agent shall take such actions (including, without limitation, directing the
Collateral Agent to take such actions) as are appropriate in connection
therewith.
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 this 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
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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, and
extensions, renewals or related refinancings thereof, provided that such
extensions, renewals or related refinancings pursuant to Section 8.04(g)
(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;
(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
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 this Agreement;
<PAGE>
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(i) any interest or title of a licensor, lessor or sublessor under
any license or lease permitted by this Agreement;
(j) Liens created pursuant to Capital Leases permitted pursuant to
Section 8.04(i);
(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);
(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), 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) securing Indebtedness of
Essex or any of its Subsidiaries pursuant to the Essex Capital Lease
Facility;
(o) Liens on assets of the Israeli Subsidiaries to secure
Indebtedness permitted under Section 8.04(n);
(p) Liens on assets of Essex Canada securing the Essex Canadian
Facility and any permitted refinancing thereof;
<PAGE>
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(q) Liens on the assets of the Mexican Subsidiaries to secure
Indebtedness permitted under Section 8.04(o); 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 this 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 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
<PAGE>
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thereof are no more adverse in any material respect to the Company or the
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, 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, 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);
(i) (A) Capitalized Lease Obligations and Indebtedness of the
Company and its Subsidiaries incurred after the Initial Borrowing Date to
secure purchase money Liens permitted under Section 8.03(k); provided that
(i) all such Capitalized Lease Obligations are permitted under Section
8.08 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;
(j) Indebtedness constituting Intercompany Loans to the extent
permitted by Section 8.05(g);
(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;
(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. Subsidiar-
<PAGE>
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ies 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 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) and (B)
other Indebtedness incurred by the Israeli Subsidiaries, provided,
directly or indirectly, that no credit or other financial support is
provided thereby by the Parent, the Company or the other Subsidiaries of
the Company;
(o) additional Indebtedness of the Mexican Subsidiaries and
intercompany loans made to the Mexican Subsidiaries as contemplated by and
in accordance with the terms of Section 8.02(s) 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
<PAGE>
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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 such Investments, including in cash,
other than Investments denominated in U.S. Dollars shall only be made to
the extent necessary to fund the 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 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 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);
<PAGE>
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(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);
(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 (including in connection
with a Permitted Acquisition) so long as such Subsidiary remains a
Guarantor;
(m) Investments in Cables of Zion as permitted by Section 8.02(q);
(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);
(o) Investments in the Mexican Subsidiaries as permitted by Section
8.02(s);
<PAGE>
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(p) the performance by the Company and its Subsidiaries of their
obligations under the Essex Funding Agreement or similar obligations under
a Receivables Financing Agreement; and
(q) the Company and its Subsidiaries that are Guarantors may make
new or additional cash Investments in or to Persons (including, without
limitation, the Investments contemplated by Section 8.02(r)(I)(w)) 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 shall not
be deemed to be Dividends), except that:
(i) any Subsidiary of the Company may pay Dividends to the Company
or any Subsidiary of the Company, provided that in the case such
Subsidiary is not a Wholly-Owned Subsidiary, the portion received by the
Company and its Wholly-Owned Subsidiaries shall not be less than their pro
rata portion thereof, based on equity ownership;
<PAGE>
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(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 Stock 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
pay a Dividend to the Parent so long as the proceeds thereof are used at
the time of such dividend payment to declare and pay a dividend on or
repurchase Parent 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, with
respect to any such payment on or after the first anniversary of the
Initial Borrowing Date, 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 any 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;
<PAGE>
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(vi) Dividends paid by the Company to the Parent (x) so long as the
proceeds thereof are used at the time of such dividend payment by the
Parent to pay expenses for administrative, legal and accounting services
provided by third parties that are reasonable and customary and incurred
in the ordinary course of business and other costs and expenses in
connection with the Parent being a publicly traded company for such
professional services or to pay franchise and similar costs (y) in an
amount not to exceed the "additional amount" for any four consecutive
fiscal quarters provided that such amount is used at the time of such
dividend payment to pay actual expenses of the Parent (including
employment expenses) and the "additional amount" is otherwise treated as
an operating expense of the Company for purposes of determining compliance
with the financial covenants contained herein; "Additional amount" for any
such period shall mean an amount not to exceed the sum of (1) $2,500,000
and (ii) that portion of the fee permitted to be paid by clause (ii) of
Section 8.07 in such period that is not actually paid; and
(vii) 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 make the payments permitted to be made by the Company pursuant
to and in accordance with Sections 8.07(ii), (iii) and (v).
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
<PAGE>
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the Company and its Subsidiaries to the extent that such transactions are
otherwise specifically permitted under this Agreement and, in the case of
transactions with Subsidiaries that are not Guarantors, such transactions are on
arms-length terms, (v) on the date of consummation of the Tender Offer, the
payment of a transaction fee to Alpine in the amount of $10,000,000 and (vi) the
performance by the Company and its Subsidiaries of the obligations under the
Essex Funding Agreement and similar obligations under a Receivables Financing
Agreement.
8.08. Capital Expenditures. (a) The Company will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures during the
period set forth below in excess of the amount set forth below with respect to
such period:
($ in millions)
Period Ending Amount:
------------- ------
01/31/2000 $68.0
01/31/2001 50.1
01/31/2002 47.5
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 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) exceed 125% of the direct amount set forth for such
fiscal year in such Section 8.08(a).
(c) Notwithstanding the proviso in Section 8.08(b), 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) and such proceeds are
reinvested as required by Section 4.02(d).
<PAGE>
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(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).
(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) and (y) the Capital Expenditures as set forth in Schedule
8.08(f), and the amounts of such Capital Expenditures shall not reduce the
amount set forth in Section 8.08(a).
(g) The Israeli Subsidiaries may make additional Capital
Expenditures to the extent necessary to fund their operations, provided that no
credit or other financial support is provided, directly or indirectly, 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:
<PAGE>
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($ in millions)
Test Period Ending: Amount:
------------------ -------
01/30/1999 $ 36.0
04/30/1999 60.0
07/31/1999 130.0
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 and the 380.0
last day of 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:
<PAGE>
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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
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 and the 3.50x
last day of 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:
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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 5.10x
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
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 and the 2.75x
last day of 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 or
the Floating Rate Facility (and any refinancings thereof) except for
prepayments or refinancings permitted by Sections 4.02(f) and 8.04(b);
(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
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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) shall not be applicable to the Israeli
Subsidiaries.
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 Parent 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) and (viii) restrictions or encumbrances pursuant
to Indebtedness of
<PAGE>
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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 this 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, this 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
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
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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 Parent or 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 the capital stock of the Borrower,
Superior Trust I and DNE Systems and its Subsidiaries and insignificant assets,
(ii) incur any Indebtedness (other than the Trust Preferred Securities, its
Guaranty and its guarantee under the Floating Rate Facility 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 and those consistent with its status as a publicly traded company.
SECTION 9. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
9.01. Payments. Either of the Borrowers shall (i) default in the
payment when due of any principal of the Loans or (ii) default, and such default
shall continue for three or more days, in the payment when due of any Unpaid
Drawing, any interest on the Loans or any Fees or any other amounts owing
hereunder or under any other Credit Document; or
9.02. Representations, etc. Any representation, warranty or
statement made by any Credit Party in any Credit Document or in any statement or
certificate delivered pursuant thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made; or
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9.03. Covenants. Any Credit Party shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 8, or (b) default in the due performance or observance by it of any
term, covenant or agreement (other than those referred to in Section 9.01, 9.02
or clause (a) of this Section 9.03) contained in this Agreement and such default
shall continue unremedied for a period of at least 30 days after notice to the
defaulting party by the Administrative Agent or the Required Lenders; provided
that if any such default covered by this clause (b) (i) is not capable of being
remedied within such 30-day period, (ii) is capable of being remedied within an
additional 30-day period and (iii) the Credit Party is diligently pursuing such
remedy during the periods contemplated by (i) and (ii) and has advised the
Administrative Agent as to the remedy thereof, the first 30-day period referred
to in this clause (b) shall be extended for an additional 30-day period but only
so long as (x) the Credit Party continues to diligently pursue such remedy and
(y) such default remains capable of being remedied within such period; or
9.04. Default Under Other Agreements. (a) The Parent, the Borrowers
or any of their respective Subsidiaries shall (i) default in any payment on or
with respect to any Indebtedness (other than the Obligations) beyond the period
of grace, if any, provided in the instrument or agreement under which such
Indebtedness was created or (ii) default in the observance or performance of any
agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause, any such Indebtedness to become due prior to its stated maturity; or (b)
any Indebtedness (other than the Obligations) of the Parent, the Borrowers or
any of their respective Subsidiaries shall be declared to be due and payable, or
shall be required to be prepaid other than by a regularly scheduled required
prepayment or as a mandatory prepayment (unless such required prepayment or
mandatory prepayment results from a default thereunder or an event of the type
that constitutes an Event of Default), prior to the stated maturity thereof;
provided that it shall not constitute an Event of Default pursuant to clause (a)
or (b) of this Section 9.04 unless the principal amount of any one issue of such
Indebtedness, or the aggregate amount of all such Indebtedness referred to in
clauses (a) and (b) above, exceeds $20,000,000 at any one time; or
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9.05. Bankruptcy, etc. The Parent, the Company or any of its
Subsidiaries shall commence a voluntary case concerning itself under Title 11 of
the United States Code entitled "Bankruptcy," as now or hereafter in effect, or
any successor thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against the Parent, the Company or any of its Subsidiaries and the
petition is not controverted within 30 days, or is not dismissed within 60 days,
after commencement of the case; or a custodian (as defined in the Bankruptcy
Code) is appointed for, or takes charge of, all or substantially all of the
property of the Parent, the Company or any of its Subsidiaries; or the Parent,
the Company or any of its Subsidiaries commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to the Parent, the Company or any of its
Subsidiaries; or there is commenced against the Parent, the Company or any of
its Subsidiaries any such proceeding which remains undismissed for a period of
60 days; or the Parent, the Company or any of its Subsidiaries is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or the Parent, the Company or any of its
Subsidiaries suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or the Parent, the Company or any of its Subsidiaries makes a
general assignment for the benefit of creditors; or any corporate action is
taken by the Parent, the Company or any of its Subsidiaries for the purpose of
effecting any of the foregoing; or
9.06. ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof or a waiver of such standard
or extension of any amortization period is sought or granted under Section 412
of the Code, any Plan shall have had or is likely to have a trustee appointed to
administer such Plan, any Plan is, shall have been or is likely to be terminated
or the subject of termination proceedings under ERISA, any Plan shall have an
Unfunded Current Liability, a contribution required to be made to a Plan or a
Non-U.S. Pension Plan has not been timely made, the Parent, the Company, Essex
or any Subsidiary of the Company or Essex or any ERISA Affiliate has incurred or
is likely to incur a liability to or on account of a Plan under Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971, 4975 or 4980 of the Code, or the Parent, the Company,
Essex or any Subsidiary of the Company or Essex has incurred or is likely to
incur liabilities pursu-
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ant to one or more employee welfare benefit plans (as defined in Section 3(1) of
ERISA) which provide benefits to retired employees and other former employees
(other than as required by Section 601 of ERISA) or employee pension benefit
plans (as defined in Section 3(2) of ERISA) or Non-U.S. Pension Plans; (b) there
shall result from any such event or events the imposition of a lien, the
granting of a security interest, or a liability or a material risk of imposition
of a lien, granting of a security interest or incurring a liability; and (c)
which lien, security interest or liability which arises from such event or
events is reasonably likely to have a Material Adverse Effect; or
9.07. Security Documents. (a) Any Security Document shall cease to
be in full force and effect, or shall cease to give the Collateral Agent the
Liens, rights, powers and privileges purported to be created thereby in favor of
the Collateral Agent with respect to any portion of the Collateral which is not
de minimis, or (b) any Credit Party shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to any such Security Document and such default shall continue
beyond any cure or grace period specifically applicable thereto pursuant to the
terms of any such Security Document; or
9.08. Guarantees. The Guarantees or any provision thereof shall
cease to be in full force and effect, or any Guarantor or any Person acting by
or on behalf of such Guarantor shall deny or disaffirm such Guarantor's
obligations under any Guaranty or any Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to any Guaranty; or
9.09. Judgments. One or more judgments or decrees shall be entered
against the Parent, the Company, Essex or any of their respective Subsidiaries
involving a liability (to the extent not paid or not fully covered by insurance)
in excess of $10,000,000 for all such judgments and decrees and all such
judgments or decrees shall not have been vacated, discharged or stayed or bonded
pending appeal within 60 days from the entry thereof; or
9.10. Ownership. A Change of Control Event shall have occurred; or
9.11. Merger. The Merger Agreement shall terminate pursuant to its
terms or the Merger shall not be consummated by October 31, 1999;
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then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent may, (and shall, upon the
written request of the Required Lenders), by written notice to the Borrowers,
take any or all of the following actions, without prejudice to the rights of the
Administrative Agent or any Lender to enforce its claims against any Guarantor
or the Borrowers, except as otherwise specifically provided for in this
Agreement (provided that, if an Event of Default specified in Section 9.05 shall
occur with respect to the Parent, the Company or Essex, the result which would
occur upon the giving of written notice by the Administrative Agent as specified
in clauses (i) and (ii) below shall occur automatically without the giving of
any such notice): (i) declare the Total Commitments terminated, whereupon the
Commitments of each Lender shall forthwith terminate immediately and any
Commitment Fees shall forthwith become due and payable without any other notice
of any kind; (ii) declare the principal of and any accrued interest in respect
of all Loans and all Obligations owing hereunder (including Unpaid Drawings) to
be, whereupon the same shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers; (iii) enforce, as Collateral Agent (or direct
the Collateral Agent to enforce), any or all of the Liens and security interests
created pursuant to the Security Documents; (iv) terminate any Letter of Credit
which may be terminated in accordance with its terms; and (v) direct the
Borrowers to pay (and the Borrowers hereby agree upon receipt of such notice, or
upon the occurrence of any Event of Default specified in Section 9.05, to pay)
to the Collateral Agent at the Payment Office such additional amounts of cash,
to be held as security for the Borrowers' reimbursement obligations in respect
of Letters of Credit then outstanding, equal to the aggregate Stated Amount of
all Letters of Credit then outstanding.
SECTION 10. Definitions. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Acquisition" shall have the meaning provided in the recitals to
this Agreement.
"Acquisition Co" shall have the meaning provided in the recitals to
this Agreement.
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"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.
"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 this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 11.10.
"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.
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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 this Amended and Restated Credit Agreement,
as the same may be from time to time modified, amended and/or supplemented.
"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.
"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).
"Alternate Currency Overdue Amounts" shall have the meaning provided
in Section 1.01(f).
"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.
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"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).
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit I (appropriately
completed).
"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
Administrative Agent by the Company or Essex to the extent reasonably acceptable
to the Administrative Agent.
"Bankruptcy Code" shall have the meaning provided in Section 9.05.
"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).
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"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 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) 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.
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"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 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 Moody's,
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 Moody's, (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
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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 this
Agreement and any subsequent provisions of the Code 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 this 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
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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).
"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 deducted in determining
Consolidated EBIT for such period.
"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
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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).
"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 by the
Company 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 (or loss for
purposes of determining Consolidated EBIT) of any other Person (other than a
Subsidiary) in which the Company or any consolidated Subsidiary has an ownership
interest, except to the extent such net earnings shall have actually been
received by the Company 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
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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 set forth in
Section 8.15); (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.
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"Continuing Directors" shall mean the directors of the Parent on the
Initial Borrowing Date and each other director if such director's nomination for
the election to the Board of Directors of the Parent is recommended by a
majority of the then Continuing Directors.
"Credit Documents" shall mean this 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.
"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.
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"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).
"Destruction" has the meaning assigned to that term in each
Mortgage.
"Dividends" shall have the meaning provided in Section 8.06.
"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.
"DNE Systems" shall mean DNE Systems, Inc., a Delaware corporation.
"Documentation Agent" shall mean Merrill Lynch & Co., and any
successor corporation thereto by merger or otherwise.
"Documents" shall mean the Credit Documents and the Acquisition
Documents.
"Dollar Equivalent" shall mean, 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.
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"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 references to ERISA are to ERISA as in effect
at the date of this 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)
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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, 1998, between Essex Canada 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 (i) the Loan and Security
Agreement, dated as of April 29, 1998, between Essex Funding and Three Rivers
Funding Corporation and (ii) the related Sales and Services Agreement dated as
of April 29, 1998.
"Essex International" shall mean Essex International Inc., a
Delaware corporation.
"Essex Sublimit" shall have the meaning provided in Section 1.01(c).
"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
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Eurodollar or Alternate Currency market by BTCo for U.S. dollar deposits or
deposits in the Alternate Currency (depending upon the Currency in 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).
"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 European Act 1986 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.
"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).
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"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.
"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, 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 this Agreement.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"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.
"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.
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"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).
"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 and
the definition of Interest Reduction Discount, including defined terms as used
therein, are subject (to the extent provided therein) to Section 12.07(a).
"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 this 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 hereof.
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"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
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,
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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).
"Intercompany Notes" shall mean promissory notes, in the form of
Exhibit J, 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.
"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 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;
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(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.
"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.
"Judgment Currency Conversion Date" shall have the meaning provided
in Section 12.18.
"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 this Agreement.
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"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
this 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) 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), 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).
"Letter of Credit Fees" shall have the meaning provided in Section
3.01(b).
"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).
"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
record-
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ing 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).
"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), 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), 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), 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
this Agreement.
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"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 this 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).
"Minimum Borrowing Amount" shall mean the amounts set forth in
Section 1.02.
"Minimum Condition" shall have the meaning provided in the recitals
to this Agreement.
"Moody's" shall mean Moody's 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) hereto, 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.
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"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.
"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
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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).
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
located at One Bankers Trust Plaza, New York, New York 10006 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.
"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.
"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.
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"Participant" shall have the meaning provided in Section 2.04(a)(i).
"Payment Office" shall mean the office of the Administrative Agent
located at One Bankers Trust Plaza, New York, New York 10006 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).
"Permitted Liens" shall have the meaning provided in Section 8.03.
"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.
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"Pledge Agreement" shall have the meaning provided in Section
5.08(a) and shall include any additional pledge agreement executed by the
Borrowers or any of their respective Subsidiaries pursuant to Section 7.11.
"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 respec-
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tive 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 and 2 plus (2) the product of the Consolidated
EBITDA for the fiscal quarter ending July 31, 1999 ("Second Quarter EBITDA") and
2, and (z) for the third such Test Period as the product of (1) the sum of First
Quarter EBIDTA plus Second Quarter EBITDA plus Consolidated EBITDA for the
fiscal quarter ending October 31, 1999 and (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
Administrative Agent 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 Administrative Agent 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 amendments or refinancings
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thereof; 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 advance rates, discounts and
other pricing terms shall be no more adverse to the Company and its Subsidiaries
than those governing similar facilities for similar credits, but in no case
shall such in the aggregate result in proceeds therefrom being less than 75% of
the book value (or, if greater, the fair market value) of such receivables and
Receivables Related Assets (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 and (z) in the case of
amendments and refinancings of the Essex Funding Agreement, the terms thereof
are no more adverse to the Company and its Subsidiaries than the terms of such
Agreement, as in effect on the Initial Borrowing Date, except as specifically
permitted by clause (x) of this proviso.
"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 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
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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.
"Refinancings" shall have the meaning provided in the recitals to
this Agreement.
"Register" shall have the meaning provided in Section 7.12.
"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 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.
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"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.
"Replacement Lender" shall have the meaning provided in Section
1.13.
"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 and Alternate Currency 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.
"Revolving Loan" shall have the meaning provided in Section 1.01(c)
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).
"Revolving Loan Commitment" shall mean, with respect to each Lender,
the amount set forth opposite such Lender's name in Annex I 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 and/or the
definition of "Total Revolving Loan Commitment."
"Revolving Loan Maturity Date" shall mean November 27, 2004.
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"Revolving Note" shall have the meaning provided in Section 1.05(a).
"Rollover Amount" shall have the meaning provided in Section
8.08(b).
"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).
"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) and shall include any additional security agreement executed by the
Borrowers or any of their respective Subsidiaries pursuant to Section 7.11.
"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).
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"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 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 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, (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) except for Essex Funding, any Receivables
Subsidiary and Essex Canada and (iii) DNE Systems and each of its Subsidiaries.
"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 Parent
preferred stock issued in exchange therefor pursuant to clause (ii)(y) of
Section 8.06).
"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 lo-
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cated, (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 Revolving Loan Maturity Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(d).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Syndication Agent" shall mean Fleet National Bank, and any
successor corporation thereto by merger or otherwise.
"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)) 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.
"Tender Offer" shall have the meaning provided in the recitals to
this Agreement.
"Tender Offer Cash Consideration" shall have the meaning provided in
the recitals to this Agreement.
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"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 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
Administrative Agent.
"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)) is paid in shares of Parent
Common Stock, such amount shall be $250,000,000.
"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.
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"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.
"Tranche A Term Loan" shall have the meaning provided in Section
1.01(a).
"Tranche A Term Loan Commitment" shall mean, for each Lender, the
amount set forth opposite such Lender's name in Annex I hereto 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 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.
"Tranche A Term Loan Lender" shall have the meaning provided in
Section 1.01(a).
"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).
"Tranche A Term Loan Scheduled Repayment Date" shall have the
meaning provided in Section 4.02(b).
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"Tranche A Term Note" shall have the meaning provided in Section
1.05(a).
"Tranche B Term Loan" shall have the meaning provided in Section
1.01(b).
"Tranche B Term Loan Commitment" shall mean, for each Lender, the
amount set forth opposite such Lender's name in Annex I 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 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.
"Tranche B Term Loan Lender" shall have the meaning provided in
Section 1.01(b).
"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).
"Tranche B Term Loan Scheduled Repayment Date" shall have the
meaning provided in Section 4.02(c).
"Tranche B Term Note" shall have the meaning provided in Section
1.05(a).
"Transaction" shall have the meaning provided in the recitals to
this 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 Parent
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 (the "Guarantee") by the Parent 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 substantive provisions thereof,
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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).
"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 this Agreement.
"U.S. Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States of America.
"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
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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 11. The Agents.
11.01. Appointment. Each Lender hereby irrevocably designates and
appoints BTCo as Administrative Agent of such Lender (such term to include for
purposes of this Section 11, BTCo acting as Collateral Agent) to act as
specified herein and in the other Credit Documents, and each such Lender hereby
irrevocably authorizes BTCo as the Administrative Agent to take such action on
its behalf under the provisions of the Credit Documents and to exercise such
powers and perform such duties as are expressly delegated to the Administrative
Agent by the terms of the Credit Documents, together with such other powers as
are reasonably incidental thereto. The Administrative Agent agrees to act as
such upon the express conditions contained in this Section 11. Notwithstanding
any provision to the contrary elsewhere in any Credit Document, no Agents shall
have any duties or responsibilities, except those expressly set forth in the
Credit Documents, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise (including by operation of law) to
exist against any Agents. The provisions of this Section 11 are solely for the
benefit of the Agents and the Lenders, and nei-
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ther the Parent, the Borrowers nor any of their respective Subsidiaries or
Affiliates shall have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement,
the Agents shall act solely as agents of the Lenders and the Agents do not
assume and shall not be deemed to have assumed any obligation or relationship of
agency or trust with or for the Parent, the Borrowers or any of their respective
Subsidiaries or Affiliates.
11.02. Delegation of Duties. The Agents may execute any of its
duties under or any Credit Document by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Agents shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care except to the extent otherwise required by Section 11.03.
11.03. Exculpatory Provisions. No Agent or any of its Affiliates or
any of their officers, directors, employees, agents or attorneys-in-fact shall
be (i) liable for any action lawfully taken or omitted to be taken by it or such
Person in its capacity as an Agent under or in connection with any Credit
Document (except to the extent found to have resulted from such Person's own
gross negligence or willful misconduct) or (ii) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties made
by the Parent, the Borrowers, any of their respective Subsidiaries or any of
their respective officers contained in any Credit Document, any other Document
or in any certificate, report, statement or other document referred to or
provided for in, or received by any Agent under or in connection with, any
Document or for any failure of the Parent, the Borrowers or any of their
respective Subsidiaries or any of their respective officers to perform its
obligations hereunder or thereunder. No Agent shall be under any obligation to
any Lender to ascertain or to inquire as to the observance or performance of any
of the agreements contained in, or condition of, any Document, or to inspect the
properties, books or records of the Company or any of its Subsidiaries. No Agent
shall be responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectability or sufficiency of any Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection herewith
or therewith furnished or made by any Agent to the Lenders or by or on behalf of
the Borrowers or any of their respective Sub-
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sidiaries to any Agent or any Lender or be required to ascertain or inquire as
to the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or of the existence or possible existence of any Default
or Event of Default.
11.04. Reliance by Agents. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, facsimile, telex
or teletype message, statement, order or other document or conversation
reasonably believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Parent, the
Borrowers or any of their respective Subsidiaries), independent accountants and
other experts selected by the Agents. Each Agent shall be fully justified in
failing or refusing to take any action under any Credit Document unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Each Agent shall in all cases
be fully protected in acting, or in refraining from acting, under any of the
Credit Documents in accordance with a request of the Required Lenders, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders.
11.05. Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default unless the Administrative Agent has actually received notice from a
Lender or the Borrowers referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default." In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give prompt notice thereof to the Lenders. The Administrative Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Lenders; provided that, unless and until
the Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
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11.06. Nonreliance on Agents and Other Lenders. Each Lender
expressly acknowledges that no Agents or any of their Affiliates or any of their
respective officers, directors, employees, agents or attorneys-in-fact have made
any representations or warranties to it and that no act by any Agent hereinafter
taken, including any review of the affairs of the Parent, the Borrowers or any
of their respective Subsidiaries, shall be deemed to constitute any
representation or warranty by any Agent or any such other Person to any Lender.
Each Lender represents to the Agents that it has, independently and without
reliance upon any Agent or any such other Person or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, assets, operations, property,
financial and other condition, prospects and creditworthiness of the Parent, the
Borrowers and their respective Subsidiaries and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative Agent
or any such other Person or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, assets, operations, property, financial and other
condition, prospects and creditworthiness of the Borrowers and their respective
Subsidiaries. The Administrative Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, operations, assets, property, financial and other condition, prospects
or creditworthiness of the Borrowers or any of their respective Subsidiaries
which may come into the possession of the Administrative Agent or any of its
Affiliates or any of their officers, directors, employees, agents or
attorneys-in-fact.
11.07. Indemnification. The Lenders agree to indemnify the Agents in
their capacity as such ratably according to their respective "percentages" as
used in determining the Required Lenders at such time (with such "percentages"
to be determined as if there are no Defaulting Lenders), from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, reasonable expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Obligations) be imposed on, incurred by or asserted
against such Agents in their capacity as such in any way relating to or arising
out of any Credit Document, or any docu-
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ments contemplated by or referred to herein or therein, or the transactions
contemplated hereby or thereby or any action taken or omitted to be taken by the
Agents under or in connection with any of the foregoing, but only to the extent
that any of the foregoing is not paid by the Parent, the Borrowers or any of
their respective Subsidiaries; provided that no Lender shall be liable to the
Agents for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent found to have resulted solely from the gross negligence or willful
misconduct of the Agents. To the extent any Lender would be required to
indemnify the Agents pursuant to the immediately preceding sentence but for the
fact that it is a Defaulting Lender, such Defaulting Lender shall not be
entitled to receive any portion of any payment or other distribution hereunder
(including, without limitation as to principal of or interest on any Loans)
until each other Lender shall have been reimbursed for the excess, if any, of
the aggregate amount paid by such Lender under this Section 11.07 over the
aggregate amount such Lender would have been obligated to pay had such first
Lender not been a Defaulting Lender. If any indemnity furnished to any Agent for
any purpose shall, in the opinion of such Agent be insufficient or become
impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished. The agreements in this Section 11.07 shall survive the payment of all
Obligations.
11.08. Agents in Their Individual Capacity. Each Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Parent, the Borrowers and their respective
Subsidiaries and Affiliates as though such Agent were not an Agent hereunder.
With respect to the Loans made by it and all Obligations owing to it, each Agent
shall have the same rights and powers under this Agreement as any Lender and may
exercise the same as though it were not an Agent and the terms "Lender" and
"Lenders" shall include such Agent in its individual capacity.
11.09. Holders. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person or entity who, at the time of making such
request or giving such authority or consent, is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee, assignee or
indorsee, as
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the case may be, of such Note or of any Note or Notes issued in exchange
therefor.
11.10. Resignation of the Administrative Agent; Successor
Administrative Agent. The Administrative Agent may resign as the Administrative
Agent upon 60 days' notice to the Lenders and the Borrowers. Upon the
resignation of the Administrative Agent, the Required Lenders shall appoint from
among the Lenders a successor Administrative Agent which is a bank or a trust
company for the Lenders subject to prior approval by the Borrowers (such
approval not to be unreasonably withheld; provided that such approval shall not
be required if a Default or an Event of Default then exists), whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall include such
successor agent effective upon its appointment, and the resigning Administrative
Agent's rights, powers and duties as the Administrative Agent shall be
terminated, without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement. After the
resignation of the Administrative Agent hereunder, the provisions of this
Section 11 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement.
SECTION 12. Miscellaneous.
12.01. Payment of Expenses, etc. The Parent and the Company, jointly
and severally, agree to: (i) whether or not the transactions herein contemplated
are consummated, pay all out-of-pocket costs and expenses of each Agent
(including, without limitation, the reasonable fees and disbursements of Cahill
Gordon & Reindel and local counsel) in connection with the negotiation,
preparation, execution and delivery of the Credit Documents and the documents
and instruments referred to therein and any amendment, waiver or consent
relating thereto and in connection with such Agent's syndication efforts with
respect to this Agreement; (ii) pay all out-of-pocket costs and expenses of each
Agent, each Letter of Credit Issuer and each of the Lenders in connection with
the enforcement of the Credit Documents and the documents and instruments
referred to therein and, after a Default or an Event of Default shall have
occurred and be continuing, the protection of the rights of the Administrative
Agent, each Letter of Credit Issuer and each of the Lenders thereunder
(including, without limitation, the fees and disbursements of counsel for such
Agent, for each Letter of Credit Issuer and for each of the Lenders); (iii) pay
and hold each of the Lenders harmless from and against any and all pres-
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ent and future stamp and other similar taxes with respect to the foregoing
matters and save each of the Lenders harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to such Lender) to pay such taxes; and (iv) indemnify
each Agent, the Collateral Agent, each Letter of Credit Issuer and each Lender
and each of their Affiliates, and each of their respective officers, directors,
employees, representatives and agents from and hold each of them harmless
against any and all losses, liabilities, claims, damages or expenses incurred by
any of them as a result of, or arising out of, or in any way related to, or by
reason of, (a) any investigation, litigation or other proceeding (whether or not
any such Person is a party thereto and whether or not any such investigation,
litigation or other proceeding is between or among any such Person, or any third
Person or otherwise) related to the entering into and/or performance of any
Credit Document or the use of the proceeds of any Loans hereunder or the
consummation of any other transactions contemplated in any Credit Document (but
excluding any such losses, liabilities, claims, damages or expenses to the
extent found to have been incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified), or (b) the actual or alleged
presence of Hazardous Materials in the air, surface water or groundwater or on
the surface or subsurface of any Real Property or any Environmental Claim, in
each case, including, without limitation, the reasonable fees and disbursements
of counsel and independent consultants incurred in connection with any such
investigation, litigation or other proceeding.
12.02. Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, the Administrative
Agent, each Letter of Credit Issuer and each Lender is hereby authorized at any
time or from time to time, without presentment, demand, protest or any other
notice of any kind to the Borrowers or any of their respective Subsidiaries or
any Guarantor or any other Person, any such notice, to the full extent permitted
by applicable law, being hereby expressly waived, to set off and to appropriate
and apply any and all deposits (general or special) and any other Indebtedness
at any time held or owing by the Administrative Agent, such Letter of Credit
Issuer or such Lender (including, without limitation, by branches and agencies
of the Administrative Agent, such Letter of Credit Issuer and such Lender
wherever located) to or for the credit or the account of the Borrowers or any
Guarantor against and on account of the Obligations of the Borrowers or any
Guarantor to the Adminis-
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trative Agent, such Letter of Credit Issuer or such Lender under this Agreement
or under any of the other Credit Documents, including, without limitation, all
interests in Obligations of the Borrowers or any Guarantor purchased by such
Lender pursuant to Section 12.06(b), and all other claims of any nature or
description arising out of or connected with any Credit Document, irrespective
of whether or not the Administrative Agent, such Letter of Credit Issuer or such
Lender shall have made any demand hereunder and although said Obligations shall
be contingent or unmatured.
12.03. Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to any Credit Party,
at the address specified in Annex IX or in the other relevant Credit Documents,
as the case may be; if to any Lender, at its address specified for such Lender
on Annex II; or, at such other address as shall be designated by any party in a
written notice to the other parties hereto. All such notices and communications
shall be mailed, telegraphed, telexed, telecopied or cabled or sent by overnight
courier, and shall be effective when received.
12.04. Benefit of Agreement. (a) This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided, however, none of the Borrowers nor
any Guarantor may assign or transfer any of its rights, obligations or interest
under any Credit Document without the prior written consent of the Lenders; and
provided, further, that, although any Lender may transfer, assign or grant
participations in its rights hereunder, such Lender shall remain a "Lender" for
all purposes hereunder (and may not transfer or assign all or any portion of its
Commitment hereunder except as provided in Section 12.04(b)) and the transferee,
assignee or participant, as the case may be, shall not constitute a "Lender"
hereunder; and provided, further, that no Lender shall transfer or grant any
participation under which the participant shall have rights to approve any
amendment to or waiver of any Credit Document except to the extent such
amendment or waiver would (i) extend the Maturity Date, or reduce the rate or
extend the time of payment of interest or Fees on Loans or Letters of Credit in
which such participant is participating (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof (it being understood that any amendment or modification
to the finan-
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cial definitions in this Agreement shall not constitute a reduction in any rate
of interest or fees for purposes of this clause (i), or increase the amount of
the participant's participation over the amount thereof, or increase the amount
of the participant's participation over the amount thereof then in effect (it
being understood that a waiver of any Default or Event of Default or of a
mandatory reduction in the Total Revolving Loan Commitment shall not constitute
a change in the terms of such participation, and that an increase in any
Commitment or Loan shall be permitted without the consent of any participant if
the participant's participation is not increased as a result thereof), (ii)
consent to the assignment or transfer by the Company of its rights and
obligations under this Agreement or (iii) release all or substantially all of
the Collateral under all of the Security Documents (except as expressly provided
in the Credit Documents) supporting the Loans in which such participant is
participating. In the case of any such participation, the participant shall not
have any rights under any of the Credit Documents (the participant's rights
against such Lender in respect of such participation to be those set forth in
the agreement executed by such Lender in favor of the participant relating
thereto) and all amounts payable by the Company hereunder shall be determined as
if such Lender had not sold such participation.
(b) Notwithstanding the foregoing, any Lender (or any Lender
together with one or more other Lenders) may (x) assign all or a portion of its
Tranche A Term Loan Commitment, Tranche B Term Loan Commitment, Revolving Loan
Commitment and/or BTCo's commitment to make Swingline Loans (and related
outstanding Obligations hereunder) to any Affiliate of such Lender which is at
least 50% owned by such Lender or its parent company or to one or more Lenders
or (y) assign all, or if less than all, a portion equal to at least $5,000,000
in the aggregate for the assigning Lender or assigning Lenders, of such
Commitment (and related outstanding Obligations hereunder) to one or more
Eligible Transferees, each of which assignees shall become a party to this
Agreement as a Lender by execution of an Assignment and Assumption Agreement;
provided that (i) at such time Annex I shall be deemed modified to reflect the
Commitments of such new Lender and of the existing Lenders, (ii) upon surrender
of the old Notes, new Notes will be issued, at the Company's expense, to such
new Lender and to the assigning Lender, such new Notes to be in conformity with
the requirements of Section 1.05 (with appropriate modifications) to the extent
needed to reflect the revised Commitments, (iii) the consent of the
Administrative Agent, which consent shall not be unreasonably withheld, shall be
required in connection with any
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such assignment pursuant to clause (y) of this Section 12.04(b) and (iv) the
Administrative Agent shall receive at the time of each such assignment, from the
assigning or assignee Lender, the payment of a non-refundable assignment fee of
$3,500; and provided, further, that such transfer or assignment will not be
effective until recorded by the Administrative Agent on the Register pursuant to
Section 7.12. To the extent of any assignment pursuant to this Section 12.04(b),
the assigning Lender shall be relieved of its obligations hereunder with respect
to its assigned Commitment. At the time of each assignment pursuant to this
Section 12.04(b) to a Person which is not already a Lender hereunder and which
is not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for Federal income tax purposes, the respective assignee Lender shall
provide to the Company and the Administrative Agent the appropriate Internal
Revenue Service Forms (and, if applicable, a Section 4.04(b)(ii) Certificate)
described in Section 4.04(b).
(c) Nothing in this Agreement shall prevent or prohibit any Lender
from pledging its Loans and Notes hereunder to a Federal Reserve Bank in support
of borrowings made by such Lender from such Federal Reserve Bank.
12.05. No Waiver; Remedies Cumulative. No failure or delay on the
part of any party in exercising any right, power or privilege under any Credit
Document and no course of dealing between any Credit Party and the
Administrative Agent or any Lender shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege under any Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
herein expressly provided are cumulative and not exclusive of any rights or
remedies which any party would otherwise have. No notice to or demand on any
Credit Party in any case shall entitle any Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent or the Lenders to any other or further action
in any circumstances without notice or demand.
12.06. Payments Pro Rata. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of any Credit Party
in respect of any Obligations of such Credit Party, it shall, except as
otherwise provided in this Agreement, distribute such payment to the Lenders
(other than any Lender that has consented in writing to waive its pro rata share
of such payment) pro rata based upon their
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respective shares, if any, of the Obligations with respect to which such payment
was received.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings or Fees, of a sum which with respect to the
related sum or sums received by other Lenders is in a greater proportion than
the total of such Obligation then owed and due to such Lender bears to the total
of such Obligation then owed and due to all of the Lenders immediately prior to
such receipt, determined in accordance with the terms of this Agreement, then
such Lender receiving such excess payment shall purchase for cash without
recourse or warranty from the other Lenders an interest in the Obligations of
the respective Credit Party to such Lenders in such amount as shall result in a
proportional participation by all of the Lenders in such amount; provided that
if all or any portion of such excess amount is thereafter recovered from such
Lender, such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
12.07. Calculations; Computations. (a) The financial statements to
be furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrowers to the Lenders); provided that except as otherwise specifically
provided herein, all computations of Excess Cash Flow and all computations
determining compliance with Sections 3.03 and 8, including definitions used
therein, and in determining the Interest Reduction Discount shall, in each case,
utilize accounting principles and policies in effect at the time of the
preparation of, and in conformity with those used to prepare, the financial
statements delivered to the Lenders pursuant to Section 6.08(b). For the purpose
of calculating the Interest Coverage Ratio, the Pro Forma Leverage Ratio and the
Fixed Charge Coverage Ratio, for all purposes of this Agreement, the Israeli
Subsidiaries shall not be treated as Subsidiaries of the Company (and
Consolidated Interest Expense shall not include interest on the intercompany
loans between the Company and its Subsidiaries, on the one hand, and the Israeli
Subsidiaries, on the other hand) and, as of the Initial Borrowing Date, Essex
International shall be treated as a
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Wholly-Owned Subsidiary of the Company, as long as the Merger Agreement remains
in effect.
(b) All computations of interest and Fees hereunder shall be based
on the actual number of days elapsed over a year of 360 days (except for
interest payable in respect of Base Rate Loans based on the Prime Lending Rate,
which shall be computed on the bases of a 365/66 day year).
(c) All interest, fees and other amounts accruing under the Existing
Superior Credit Agreement on or prior to, or determined in respect of any day
accruing on or prior to the Effective Date shall be computed and determined as
provided in the Existing Superior Credit Agreement before giving effect to this
Agreement.
12.08. Governing Law; Submission to Jurisdiction; Venue. (a) THIS
AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND (EXCEPT AS OTHERWISE EXPRESSLY STATED THEREIN) THEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF
NEW YORK. Any legal action or proceeding with respect to this Agreement or any
other Credit Document may be brought in the courts of the State of New York or
of the United States for the Southern District of New York, and, by execution
and delivery of this Agreement, each Credit Party hereby irrevocably accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. Each Credit Party hereby further
irrevocably waives any claim that any such courts lack jurisdiction over such
Credit Party, and agrees not to plead or claim, in any legal action or
proceeding with respect to any Credit Document brought in any of the aforesaid
courts, that any such court lacks jurisdiction over such Credit Party. Each
Credit Party irrevocably consents to the service of process in any such action
or proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to such Credit Party, at its address for notices pursuant to
Section 12.03, such service to become effective 30 days after such mailing. Each
Credit Party hereby irrevocably waives any objection to such service of process
and further irrevocably waives and agrees not to plead or claim in any action or
proceeding commenced under any Credit Document that service of process was in
any way invalid or ineffective. Nothing herein shall affect the right of the
Administrative Agent, any Lender or the holder of any Note to serve process in
any other manner permitted by applicable law or to commence legal proceedings or
otherwise proceed against any Credit Party in any other jurisdiction.
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(b) Each Credit Party hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with any Credit Document
brought in the courts referred to in clause (a) above and hereby further
irrevocably waives and agrees not to plead or claim in any such court that any
such action or proceeding brought in any such court has been brought in an
inconvenient forum.
12.09. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts executed by all of the parties hereto shall be lodged with the
Company and the Administrative Agent.
12.10. Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which the Borrowers, each Guarantor, the
Administrative Agent, the Syndication Agent and the Documentation Agent and each
of the Lenders shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered the same to the Administrative
Agent at the Notice Office or, in the case of the Lenders, shall have given to
the Administrative Agent telephonic (confirmed in writing), written, telex or
facsimile notice (actually received) at such office that the same has been
signed and mailed to it. The Administrative Agent will give the Company and each
Lender prompt written notice of the occurrence of the Effective Date.
12.11. Headings Descriptive. The headings of the several sections
and subsections of this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.
12.12. Amendment or Waiver, etc. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Lenders; provided that no such change, waiver, discharge or termination
shall, without the consent of each Lender (other than a Defaulting Lender) (with
Obligations being directly affected thereby in the case of the following clause
(i)), (i) extend any Maturity Date, or reduce the rate or extend the time of
payment of interest or Fees on any Loan or Letter of Credit thereon, or reduce
the principal amount
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thereof (it being understood that any amendment or modification to the financial
definitions in this Agreement shall not constitute a reduction in any rate of
interest or Fees for purposes of this clause (i)), (ii) release all or
substantially all of the Collateral (except as expressly provided in the
Security Documents) under all the Security Documents, or release any Guarantor
(other than in connection with a sale otherwise permitted hereby, or by the
Administrative Agent as contemplated by the last sentence of Section 8.14),
(iii) amend, modify or waive any provision of this Section 12.12, (iv) reduce
the percentage specified in the definition of Required Lenders (it being
understood that, with the consent of the Required Lenders, additional extensions
of credit pursuant to this Agreement may be included in the determination of the
Required Lenders on substantially the same basis as the extensions of Total
Commitments are included on the Effective Date) or (v) consent to the assignment
or transfer by the Company of any of its rights and obligations under this
Agreement; provided, further, that no such change, waiver, discharge or
termination shall (u) increase the Commitment of any Lender over the amount
thereof then in effect without the consent of such Lender (it being understood
that waivers or modifications of conditions precedent, covenants, Defaults or
Events of Default or of a mandatory reduction in the Total Commitment shall not
constitute an increase of the Revolving Loan Commitment of any Lender, and that
an increase in the available portion of any Revolving Loan Commitment of any
Lender shall not constitute an increase in the Revolving Loan Commitment of such
Lender), (v) without the consent of BTCo, amend, modify or waive any provision
of Section 2 or alter its rights or obligations with respect to Letters of
Credit or Swingline Loans, (w) without the consent of the Administrative Agent,
amend, modify or waive any provision of Section 11 as the same applies to the
Administrative Agent or any other provision as the same relates to the rights or
obligations of the Administrative Agent, (x) without the consent of the
Collateral Agent, amend, modify or waive any provision relating to the rights or
obligations of the Collateral Agent, (y) without the consent of the Required
Lenders of each Tranche which is being allocated a lesser prepayment, repayment
or commitment reduction as a result of the actions described below (or without
the consent of the Required Lenders of each Tranche in the case of an amendment
to the definition of Required Lenders), amend the definition of Required Lenders
or alter the required application of any prepayments or repayments (or
commitment reductions), as between the various Tranches, pursuant to Section
4.01 or 4.02 or (z) without the consent of the Required Lenders of the
respective Tranche, amend, modify or waive any Tranche A Term Loan Scheduled
Repay-
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ment or Tranche B Term Loan Scheduled Repayment. In connection with the initial
syndication of the Loans, if the Administrative Agent advises the Borrowers that
it is (in the Administrative Agent's reasonable judgment) necessary or advisable
to facilitate the syndication to modify the Alternate Currency Lender's
obligations to make Euro Loans in Alternate Currencies, the Borrowers and the
Lenders will enter into appropriate modifications to this Agreement (in the
Administrative Agent's customary form) to so provide, so long as the economic
and other terms contained herein with respect to the availability of Alternate
Currency Loans are not changed in a way materially adverse to the Borrowers.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 12.12(a),
the consent of the Required Lenders is obtained but the consent of one or more
of such other Lenders whose consent is required is not obtained, then the
Borrower shall have the right, so long as all non-consenting Lenders whose
individual consent is required are treated as described in either clauses (A) or
(B) below, to either (A) replace each such non-consenting Lender or Lenders with
one or more Replacement Lenders pursuant to Section 1.13 so long as at the time
of such replacement, each such Replacement Lender consents to the proposed
change, waiver, discharge or termination or (B) terminate such non-consenting
Lender's Revolving Loan Commitment (if such Lender's consent is required as a
result of its Revolving Loan Commitment) and/or repay outstanding Loans of such
Lender which gave rise to the need to obtain such Lender's consent, in
accordance with Sections 3.02(b) and/or 4.01(b); provided that, unless the
Commitments are terminated, and Loans repaid, pursuant to preceding clause (B)
are immediately replaced in full at such time through the addition of new
Lenders or the increase of the Commitments and/or outstanding Loans of existing
Lenders (who in each case must specifically consent thereto), then in the case
of any action pursuant to preceding clause (B) the Required Lenders (determined
before giving effect to the proposed action) shall specifically consent thereto;
provided further, that in any event the Borrower shall not have the right to
replace a Lender, terminate its Revolving Loan Commitment or repay its Loans
solely as a result of the exercise of such Lender's rights (and the withholding
of any required consent by such Lender) pursuant to the second proviso to
Section 12.12(a).
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12.13. Survival. All indemnities set forth herein including, without
limitation, in Section 1.10, 1.11, 2.05, 4.04, 11.07 or 12.01, shall survive the
execution and delivery of this Agreement and the making and repayment of the
Loans.
12.14. Domicile of Loans. Each Lender may transfer and carry its
Loans at, to or for the account of any branch office, subsidiary or affiliate of
such Lender; provided that the Company shall not be responsible for costs
arising under Section 1.10, 1.11, 2.05 or 4.04 resulting from any such transfer
(other than a transfer pursuant to Section 1.12) to the extent such costs would
not otherwise be applicable to such Lender in the absence of such transfer.
12.15. Confidentiality. Each of the Lenders agrees that it will use
its reasonable efforts not to disclose without the prior consent of the Company
(other than to Affiliates of such Lenders and their respective directors,
employees, auditors, counsel or other professional advisors) any confidential
information with respect to the Company or any of its Subsidiaries which is
furnished pursuant to this Agreement; provided that any Lender may disclose any
such information (a) that is or has become generally available to the public,
(b) as may be required or appropriate (x) in any report, statement or testimony
submitted to any municipal, state or Federal or other governmental regulatory
body having or claiming to have jurisdiction over such Lender or to the Federal
Reserve Board or the Federal Deposit Insurance Corporation or similar
organizations (whether in the United States or elsewhere) or their successors or
(y) in connection with any request or requirement of any such regulatory body,
(c) as may be required or appropriate in response to any summons or subpoena or
in connection with any litigation, (d) to comply with any law, order, regulation
or ruling applicable to such Lender, and (e) to any prospective transferee in
connection with any contemplated transfer of any of the Notes or any interest
therein by such Lender; provided that such prospective transferee agrees to be
bound by this Section 12.15 to the same extent as such Lender.
12.16. Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
12.17. Margin Stock. Notwithstanding any other provision of this
Agreement or the other Credit Documents to the
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contrary, prior to the consummation of the Merger, no provision of this
Agreement, including Section 8.03, or any other Credit Document, shall be deemed
to create a direct or indirect security interest in the outstanding Common Stock
of Essex while it is Margin Stock and Acquisition Co. may hold such Margin Stock
and sell the outstanding Common Stock of Essex for the fair market value thereof
in accordance with Section 8.12.
12.18. Judgment Currency. (a) The Borrowers' obligations hereunder
and under the other Credit Documents to make payments in U.S. Dollars or the
Alternate Currency (the "Obligation Currency") shall not be discharged or
satisfied by any tender or recovery pursuant to any judgment expressed in or
converted into any currency other than the Obligation Currency, except to the
extent that such tender or recovery results in the effective receipt by the
Administrative Agent or the respective Lender of the full amount of the
Obligation Currency expressed to be payable to the Administrative Agent or such
Lender under this Agreement or the other Credit Documents. If for the purpose of
obtaining or enforcing judgment against either Borrower in any court or in any
jurisdiction, it becomes necessary to convert into or from any currency other
than the Obligation Currency (such other currency being hereinafter referred to
as the "Judgment Currency") an amount due in the Obligation Currency, the
conversion shall be made at the Foreign Currency Equivalent or the Dollar
Equivalent thereof, as the case may be, and, in the case of other currencies,
the rate of exchange (as quoted by the Administrative Agent or if the
Administrative Agent does not quote a rate of exchange on such currency, by a
known dealer in such currency designated by the Administrative Agent)
determined, in each case, as of the day immediately preceding the day on which
the judgment is given (such Business Day being hereinafter referred to as the
"Judgment Currency Conversion Date").
(b) If there is a change in the rate of exchange prevailing between
the Judgment Currency Conversion Date and the date of actual payment of the
amount due, the applicable Borrower covenants and agrees to pay, or cause to be
paid, such additional amounts, if any (but in any event not a lesser amount) as
may be necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate of exchange prevailing on the Judgment Currency Conversion
Date.
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(c) For purposes of determining the Foreign Currency Equivalent or
the Dollar Equivalent or any other rate of exchange for this Section, such
amounts shall include any premium and costs payable in connection with the
purchase of the Obligation Currency.
12.19 Determination of Dollar Equivalent. For purposes of this
Agreement, the Dollar Equivalent of Alternate Currency Loans shall be calculated
on the last Business Day of each month or, at the reasonable discretion of the
Administrative Agent, on a more frequent basis. The Dollar Equivalent for
Alternate Currency Loans shall remain in effect until the same is recalculated
by the Administrative Agent as provided above and notice of such recalculation
is received by the Company, it being understood that until such notice is
received, the Dollar Equivalent shall be that Dollar Equivalent as last reported
to the Company by the Administrative Agent. The Administrative Agent shall
promptly notify the Company and the Lenders of each determination of the Dollar
Equivalent for Alternate Currency Loans.
12.20. DNE Systems. With respect to all provisions of this Agreement
and other Credit Documents, all of the capital stock of DNE Systems owned by the
Parent shall be treated as if it is all owned directly by the Company. As an
example of the foregoing, to the extent that provisions of this Agreement and
the other Credit Documents would allow DNE Systems, as a Subsidiary of the
Company, to pay dividends to its shareholders or make loans, advances or
distributions to its parent company or a subsidiary of its parent company, such
dividends, loans or advances shall only be permitted hereunder or under the
other Credit Documents to the extent that they are paid to the Company or a
Subsidiary of the Company that is a Guarantor (except to the extent this
Agreement or the Credit Documents specifically would otherwise allow a
Subsidiary of the Company to make such dividends or other payments to the
Parent). Without limiting the foregoing, all financial statements and all
financial tests contained herein shall be determined as if all the capital stock
of DNE Systems owned by the Parent is owned by the Company. Notwithstanding the
other provisions of this Section 12.20, the Company and its Subsidiaries may
make Investments in DNE Systems or its Subsidiaries only to the extent necessary
to fund, in accordance with existing business practice, DNE Systems' existing
operations as of the Initial Borrowing Date; provided, however, that,
notwithstanding the foregoing, the Company and its Subsidiaries that are
Guarantors may make Investments in DNE Systems and its Subsidiaries to the
extent that such Investments are permitted by and are in accor-
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dance with the terms of Section 8.05(q) (such Investments decreasing the basket
provided in such Section 8.05(q)).
SECTION 13. Guaranty.
13.01. The Guaranty. (a) In order to induce the Lenders to enter
into this Agreement and to extend credit hereunder and in recognition of the
direct and indirect benefits to be received by each Guarantor from the proceeds
of the Loans and the issuance of the Letters of Credit, each Guarantor hereby
agrees with the Lenders as follows: Each Guarantor hereby unconditionally and
irrevocably, jointly and severally, guarantees, as primary obligor and not
merely as surety the full and prompt payment when due, whether upon maturity,
acceleration or otherwise, of any and all of the Guaranteed Obligations of the
Company to the Guaranteed Creditors. If any or all of the Guaranteed Obligations
of the Company to the Guaranteed Creditors becomes due and payable hereunder,
each Guarantor, jointly and severally, and unconditionally promises to pay such
indebtedness to the Guaranteed Creditors, or order, on demand, together with any
and all expenses (including reasonable legal fees and expenses) which may be
incurred by the Guaranteed Creditors in collecting or enforcing any of the
Guaranteed Obligations. If claim is ever made upon any Guaranteed Creditor for
repayment or recovery of any amount or amounts received in payment or on account
of any of the Guaranteed Obligations and any of the aforesaid payees repays all
or part of said amount by reason of (i) any judgment, decree or order of any
court or administrative body having jurisdiction over such payee or any of its
property or (ii) any settlement or compromise of any such claim effected by such
payee with any such claimant (including the Company), then and in such event
each Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon such Guarantor, notwithstanding any revocation
of this Guaranty or any other instrument evidencing any liability of the
Company, and each Guarantor shall be and remain jointly and severally liable to
the aforesaid payees hereunder for the amount so repaid or recovered to the same
extent as if such amount had never originally been received by any such payee.
This is a guaranty of payment and not of collection.
(b) Anything contained in this Guaranty to the contrary
notwithstanding, the obligations of each Subsidiary Guarantor hereunder shall be
limited to a maximum aggregate amount equal to the largest amount that would not
render its obligations and/or the grant of security interests in Collateral to
secure its Obligations hereunder subject to avoidance as a
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fraudulent transfer or conveyance under Section 548 of the Bankruptcy Code or
any applicable provisions of comparable state law (collectively, the "Fraudulent
Transfer Laws"), in each case after giving effect to all other liabilities of
such Subsidiary Guarantor, contingent or otherwise, that are relevant under the
Fraudulent Transfer Laws (specifically excluding, however, any liabilities of
such Subsidiary Guarantor in respect of intercompany Indebtedness to the Company
or other Affiliates of the Company to the extent that such Indebtedness would be
discharged in an amount equal to the amount paid by such Subsidiary Guarantor
hereunder, and after giving effect (x) to the direct and indirect benefits
received by such Subsidiary Guarantor as a result of the Credit Documents and
the Loans and (y) as assets to the value (as determined under the applicable
provisions of the Fraudulent Transfer Laws) of any rights to subrogation,
reimbursement, indemnification or contribution of such Subsidiary Guarantor
pursuant to applicable law or pursuant to the terms of any agreement (including
without limitation any such right of contribution under Section 13.01(c)).
(c) Subsidiary Guarantors under this Guaranty together desire to
allocate among themselves in a fair and equitable manner their obligations
arising under this Guaranty. Accordingly, in the event any payment or
distribution is made on any date by any Subsidiary Guarantor under this Guaranty
(a "Funding Guarantor") that exceeds its Fair Share (as defined below) as of
such date, that Funding Guarantor shall be entitled to a contribution from each
of the other Subsidiary Guarantors in the amount of such other Subsidiary
Guarantor's Fair Share Shortfall (as defined below) as of such date, with the
result that all such contributions will cause each Subsidiary Guarantor's
Aggregate Payments (as defined below) to equal its Fair Share as of such date.
"Fair Share" means, with respect to a Subsidiary Guarantor as of any date of
determination, an amount equal to (i) the ratio of (x) the Adjusted Maximum
Amount (as defined below) with respect to such Subsidiary Guarantor to (y) the
aggregate of the Adjusted Maximum Amounts with respect to all Subsidiary
Guarantors, multiplied by (ii) the aggregate amount paid or distributed on or
before such date by all Funding Guarantors under this Guaranty in respect of the
obligations guarantied. "Fair Share Shortfall" means, with respect to a
Subsidiary Guarantor as of any date of determination, the excess, if any, of the
Fair Share of such Subsidiary Guarantor over the Aggregate Payments of such
Subsidiary Guarantor. "Adjusted Maximum Amount" means, with respect to a
Subsidiary Guarantor as of any date of determination, the maximum aggregate
amount of the obligations of such Subsidiary Guaran-
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tor under this Guaranty, determined as of such date in accordance with this
Section 13.01; provided that, solely for purposes of calculating the "Adjusted
Maximum Amount" with respect to any Subsidiary Guarantor for purposes of this
Section 13.01(c), any assets or liabilities of such Subsidiary Guarantor arising
by virtue of any rights to subrogation, reimbursement or indemnification or any
rights to or obligations of contribution hereunder shall not be considered as
assets or liabilities of such Subsidiary Guarantor. "Aggregate Payments" means,
with respect to a Subsidiary Guarantor as of any date of determination, an
amount equal to (i) the aggregate amount of all payments and distributions made
on or before such date by such Subsidiary Guarantor in respect of this Guaranty
(including, without limitation, in respect of this Section 13.01(c)) minus (ii)
the aggregate amount of all payments received on or before such date by such
Subsidiary Guarantor from the other Subsidiary Guarantors as contributions under
this Section 13.01(c). The amounts payable as contributions hereunder shall be
determined as of the date on which the related payment or distribution is made
by the applicable Funding Guarantor. The allocation among Subsidiary Guarantors
of their obligations as set forth in this Section 13.01(c) shall not be
construed in any way to limit the liability of any Subsidiary Guarantor
hereunder.
13.02. Nature of Liability. The liability of each Guarantor
hereunder is joint and several and exclusive and independent of any security for
or other guaranty of the Guaranteed Obligations of the Company whether executed
by such Guarantor, any other Guarantor, any other guarantor or by any other
party, and the liability of each Guarantor hereunder is not affected or impaired
by (a) any direction as to application of payment by the Company or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the Guaranteed Obligations
of the Company, or (c) any payment on or in reduction of any such other guaranty
or undertaking, or (d) any dissolution, termination or increase, decrease or
change in personnel by the Company, or (e) any payment made to the Guaranteed
Creditors on the Guaranteed Obligations which any such Guaranteed Creditor
repays to the Company pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and each Guarantor,
to the extent permitted by applicable law, waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding.
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13.03. Independent Obligation. The obligations of each Guarantor
hereunder are independent of the obligations of any other Guarantor, any other
guarantor, any other party or the Company, and a separate action or actions may
be brought and prosecuted against each Guarantor whether or not action is
brought against any other Guarantor, any other guarantor, any other party or the
Company and whether or not any other guarantor, any other party or the Company
is joined in any such action or actions. Each Guarantor waives, to the full
extent permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by the Company or
other circumstance which operates to toll any statute of limitations as to the
Company shall operate to toll the statute of limitations as to any Guarantor.
13.04. Authorization. Each Guarantor authorizes the Guaranteed
Creditors without notice or demand (except as shall be required by applicable
statute and cannot be waived), and without affecting or impairing its liability
hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew, increase, accelerate or alter,
any of the Guaranteed Obligations (including any increase or decrease in
the rate of interest thereon), any security therefor, or any liability
incurred directly or indirectly in respect thereof, and the Guaranty
herein made shall apply to the Guaranteed Obligations as so changed,
extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset there against;
(c) exercise or refrain from exercising any rights against the
Company or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Company or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including
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any of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of the Company to its
creditors other than the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Company to the Guaranteed Creditors
regardless of what liability or liabilities of the Company remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement, any other Credit Document or any of the
instruments or agreements referred to herein or therein, or otherwise
amend, modify or supplement this Agreement, any other Credit Document or
any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
any Guarantor from its liabilities under this Guaranty.
13.05. Reliance. It is not necessary for the Guaranteed Creditors to
inquire into the capacity or powers of the Company or the officers, directors,
partners or agents acting or purporting to act on its behalf, and any Guaranteed
Obligations made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
13.06. Subordination. Any of the indebtedness of the Company now or
hereafter owing to any Guarantor is hereby subordinated to the Guaranteed
Obligations of the Company owing to the Guaranteed Creditors; and if the
Administrative Agent so requests at a time when an Event of Default exists, all
such indebtedness of the Company to any Guarantor shall be collected, enforced
and received by such Guarantor for the benefit of the Guaranteed Creditors and
be paid over to the Administrative Agent on behalf of the Guaranteed Creditors
on account of the Guaranteed Obligations of the Company to the Guaranteed
Creditors, but without affecting or impairing in any manner the liability of any
Guarantor under the other provisions of this Guaranty (other than the reduction
of any such liability attributable to such payment). Prior to the transfer by
any Guarantor of any note or negotiable instrument evidencing any of the
indebtedness of the Company to such Guarantor, such Guarantor shall mark such
note or negotiable instrument with a legend that the same is subject to this
subordination. Without
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limiting the generality of the foregoing, each Guarantor hereby agrees with the
Guaranteed Creditors that it will not exercise any right of subrogation which it
may at any time otherwise have as a result of this Guaranty (whether
contractual, under Section 509 of the Bankruptcy Code or otherwise) until all
Guaranteed Obligations have been irrevocably paid in full in cash.
13.07. Waiver. (a) Each Guarantor waives any right (except as shall
be required by applicable statute and cannot be waived) to require any
Guaranteed Creditor to (i) proceed against the Company, any other Guarantor, any
other guarantor or any other party, (ii) proceed against or exhaust any security
held from the Company, any other Guarantor, any other guarantor or any other
party or (iii) pursue any other remedy in any Guaranteed Creditor's power
whatsoever. Each Guarantor waives any defense based on or arising out of any
defense of the Company, any other Guarantor, any other guarantor or any other
party, other than payment in full of the Guaranteed Obligations, based on or
arising out of the disability of the Company, any other Guarantor, any other
guarantor or any other party, or the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Company other than payment in full of the Guaranteed
Obligations. The Guaranteed Creditors may, at their election, foreclose on any
security held by the Administrative Agent, the Collateral Agent or any other
Guaranteed Creditor by one or more judicial or nonjudicial sales, whether or not
every aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or remedy the
Guaranteed Creditors may have against the Company or any other party, or any
security, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent the Guaranteed Obligations have been
paid. Each Guarantor waives any defense arising out of any such election by the
Guaranteed Creditors, even though such election operates to impair or extinguish
any right of reimbursement or subrogation or other right or remedy of such
Guarantor against the Company or any other party or any security.
(b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
Guaranteed Obligations. Each Guarantor assumes all responsibility for being and
keeping itself informed of the Com-
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pany's financial condition and assets, and of all other circumstances bearing
upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope
and extent of the risks which each Guarantor assumes and incurs hereunder, and
agrees that the Guaranteed Creditors shall have no duty to advise any Guarantor
of information known to them regarding such circumstances or risks.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
SUPERIOR/ESSEX CORP., as
Borrower
By: /s/ Stewart H. Wahrsager
----------------------------------
Name:
Title:
SUPERIOR TELECOM INC., as
Guarantor
By: /s/ Stewart H. Wahrsager
----------------------------------
Name: Stewart H. Wahrsager
Title: Secretary
SUPERIOR TELECOMMUNICATIONS,
INC., as Guarantor
By: /s/ Stewart H. Wahrsager
----------------------------------
Name: Stewart H. Wahrsager
Title: Assistant Secretary
DNE SYSTEMS, INC.,
as Guarantor
By: /s/ Stewart H. Wahrsager
----------------------------------
Name: Stewart H. Wahrsager
Title: First Assistant Secretary
DNE MANUFACTURING & SERVICE COMPANY,
as Guarantor
By: /s/ Stewart H. Wahrsager
----------------------------------
Name: Stewart H. Wahrsager
Title: First Assistant Secretary
<PAGE>
DNE TECHNOLOGIES, INC.,
as Guarantor
By: /s/ Stewart H. Wahrsager
----------------------------------
Name: Stewart H. Wahrsager
Title: First Assistant Secretary
TEXAS SUT INC.,
as Guarantor
By: /s/ Stewart H. Wahrsager
----------------------------------
Name:
Title:
<PAGE>
ESSEX GROUP, INC., as Borrower and as
Guarantor
By: /s/ David A. Owen
----------------------------------
Name: David A. Owen
Title: Executive Vice President
and Chief Financial Officer
ESSEX INTERNATIONAL INC.,
as Guarantor
By: /s/ David A. Owen
----------------------------------
Name: David A. Owen
Title: Executive Vice President
and Chief Financial Officer
ACTIVE INDUSTRIES, INC.,
as Guarantor
By: /s/ David A. Owen
----------------------------------
Name: David A. Owen
Title: Vice President and
Treasurer
DIAMOND WIRE & CABLE CO.,
as Guarantor
By: /s/ David A. Owen
----------------------------------
Name: David A. Owen
Title: Vice President and Treasurer
ESSEX GROUP, INC.,
as Guarantor
By: /s/ David A. Owen
----------------------------------
Name: David A. Owen
Title: Vice President and Treasurer
ESSEX GROUP MEXICO INC.,
as Guarantor
By: /s/ David A. Owen
----------------------------------
Name: David A. Owen
Title: Vice President and Treasurer
<PAGE>
ESSEX MEXICO HOLDINGS, L.L.C.,
as Guarantor
By: /s/ David A. Owen
----------------------------------
Name: David A. Owen
Title: Vice President and Treasurer
ESSEX SERVICES, INC.,
as Guarantor
By: /s/ David A. Owen
----------------------------------
Name: David A. Owen
Title: Vice President and Treasurer
ESSEX TECHNOLOGY, INC.,
as Guarantor
By: /s/ Douglas L. Pett
----------------------------------
Name: Douglas L. Pett
Title: President
ESSEX WIRE CORPORATION,
as Guarantor
By: /s/ David A. Owen
----------------------------------
Name: David A. Owen
Title: Vice President and Treasurer
<PAGE>
BANKERS TRUST COMPANY, as
Administrative Agent
By: /s/ Anthony LoGrippo
----------------------------------
Name: ANTHONY LoGRIPPO
Title: VICE PRESIDENT
FLEET NATIONAL BANK, as Syndication
Agent
By: /s/
----------------------------------
Name:
Title:
MERRILL LYNCH & CO., as Documentation
Agent
By: /s/
----------------------------------
Name:
Title:
<PAGE>
BANKERS TRUST COMPANY, as
Administrative Agent
By: /s/
----------------------------------
Name:
Title:
FLEET NATIONAL BANK, as Syndication
Agent
By: /s/ Alex Sade
----------------------------------
Name: Alex Sade
Title: Director
MERRILL LYNCH & CO., as Documentation
Agent
By: /s/
----------------------------------
Name:
Title:
<PAGE>
BANKERS TRUST COMPANY, as
Administrative Agent
By: /s/
----------------------------------
Name:
Title:
FLEET NATIONAL BANK, as Syndication
Agent
By: /s/
----------------------------------
Name:
Title:
MERRILL LYNCH & CO., as Documentation
Agent
By: /s/ Christopher K. Stout
----------------------------------
Name: Christopher K. Stout
Title: Director
<PAGE>
BANKERS TRUST COMPANY, as
Lender
By: /s/ Anthony LoGrippo
----------------------------------
Name: ANTHONY LoGRIPPO
Title: VICE PRESIDENT
FLEET NATIONAL BANK, as Lender
By: /s/
----------------------------------
Name:
Title:
MERRILL LYNCH CAPITAL
CORPORATION, as Lender
By: /s/
----------------------------------
Name:
Title:
<PAGE>
BANKERS TRUST COMPANY, as
Lender
By: /s/
----------------------------------
Name:
Title:
FLEET NATIONAL BANK, as Lender
By: /s/ Alex Sade
----------------------------------
Name: Alex Sade
Title: Director
MERRILL LYNCH CAPITAL
CORPORATION, as Lender
By: /s/
----------------------------------
Name:
Title:
<PAGE>
BANKERS TRUST COMPANY, as
Lender
By: /s/
----------------------------------
Name:
Title:
FLEET NATIONAL BANK, as Lender
By: /s/
----------------------------------
Name:
Title:
MERRILL LYNCH CAPITAL
CORPORATION, as Lender
By: /s/ Christopher K. Stout
----------------------------------
Name: Christopher K. Stout
Title: VP
<PAGE>
CRESCENT/MACH I PARTNERS, L.P.
By: TCW Asset Management Company its
Investment Manager, as Lender
By: /s/
---------------------------------
Name:
Title:
<PAGE>
ANNEX I
LIST OF BANKS AND COMMITMENTS
Revolving Loan Tranche A Term Tranche B Term
Lender Commitment Loan Commitment Loan Commitment
- ------ --------------- --------------- ---------------
Bankers Trust Company $168,260,869.56 $373,913,043.48 $349,076,086.96
Fleet National Bank 34,239,130.44 76,086,956.52 20,923,913.04
Merrill Lynch Capital 22,500,000.00 50,000,000.00 42,500,000.00
Corporation
Trust Company of the
West (Crescent/Mach I) 0 0 12,500,000.00
--------------- --------------- ---------------
Total: $225,000,000.00 $500,000,000.00 $425,000,000.00
<PAGE>
ANNEX II
LENDER ADDRESSES
Lender Address
- ------ -------
Bankers Trust Company One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Attention: Anthony LoGrippo
Telephone No.: (212) 250-4886
Facsimile No.: (212) 250-7218
Fleet National Bank One Federal Street
3rd Floor
Boston, Massachusetts 02110
Attention: Howard Diamond
Telephone No.: (617) 346-0042
Facsimile No.: (617) 346-5093
Merrill Lynch Capital Corporation World Financial Center
North Tower
New York, New York 10281
Attention: Christopher Stout
Telephone No.: (212) 449-0982
Facsimile No.: (212) 449-8635
Crescent/Mach I Partners, L.P. Trust Company of the West
TCW Asset Management Company
200 Park Avenue, Suite 2200
New York, NY 10166
Attention: Mark Gold/Justin
Driscoll
Telephone No.: (212) 771-4000
Facsimile No.: (212) 771-4159
<PAGE>
-2-
ANNEX IX
--------
CREDIT PARTY ADDRESSES
Credit Party Address
- ------------ -------
Superior/Essex Corp. 150 Interstate North Parkway
Suite 300
Atlanta, Georgia 30334
Telephone No.: (770) 953-8338
Facsimile No.: (770) 984-3218
Superior Telecommunications Inc. 150 Interstate North Parkway
Suite 300
Atlanta, Georgia 30334
Telephone No.: (770) 953-8338
Facsimile No.: (770) 984-3218
Superior Telecom Inc. 150 Interstate North Parkway
Suite 300
Atlanta, Georgia 30334
Telephone No.: (770) 953-8338
Facsimile No.: (770) 984-3218
DNE Systems, Inc. 50 Barnes Park North
Wallingford, Connecticut 06492
Telephone No.: (203)
Facsimile No.: (203) 984-3218
DNE Technologies, Inc. 50 Barnes Park North
Wallingford, Connecticut 06492
Telephone No.: (203)
Facsimile No.: (203) 265-7801
Texas SUT Inc. 150 Interstate North Parkway
Suite 300
Atlanta, Georgia 30334
Telephone No.: (770) 953-8338
Facsimile No.: (770) 984-3218
Essex Group, Inc. 1601 Wall Street
Fort Wayne, Indiana 46802
Telephone No.: (219) 461-4000
Facsimile No.: (219) 461-4469
<PAGE>
-3-
Essex International Inc. 1601 Wall Street
Fort Wayne, Indiana 46802
Telephone No.: (219) 461-4000
Facsimile No.: (219) 461-4469
Active Industries, Inc. 1601 Wall Street
Fort Wayne, Indiana 46802
Telephone No.: (219) 461-4000
Facsimile No.: (219) 461-4469
Diamong Wire & Cable Co. 1601 Wall Street
Fort Wayne, Indiana 46802
Telephone No.: (219) 461-4000
Facsimile No.: (219) 461-4469
Essex Mexico Holdings, LLC 1601 Wall Street
Fort Wayne, Indiana 46802
Telephone No.: (219) 461-4000
Facsimile No.: (219) 461-4469
Essex Group Mexico Inc. 1601 Wall Street
Fort Wayne, Indiana 46802
Telephone No.: (219) 461-4000
Facsimile No.: (219) 461-4469
Essex Wire Corporation 1601 Wall Street
Fort Wayne, Indiana 46802
Telephone No.: (219) 461-4000
Facsimile No.: (219) 461-4469
Essex Technology Inc. 1601 Wall Street
Fort Wayne, Indiana 46802
Telephone No.: (219) 461-4000
Facsimile No.: (219) 461-4469
<PAGE>
SCHEDULE 8.08(f)
Capital Expenditures
Capital Expenditures in an aggregate amount of $62,000,000 to be expended by May
27, 2004, provided that no more than $55,000,000 may be expended prior to
January 31, 2001, for the following three projects:
(i) Enterprise Resource Planning and related management information
systems;
(ii) the expansion of Datacom capacity and capabilities; and
(iii) (x) the expansion of continuous casting and PBC insulation capacity
and capabilities, (y) the consolidation of manufacturing facilities
and (z) the enhancement of operating efficiencies.
================================================================================
SENIOR SUBORDINATED CREDIT AGREEMENT
among
SUPERIOR/ESSEX CORP.,
as Borrower,
SUPERIOR TELECOM INC.,
as Parent,
THE SUBSIDIARY GUARANTORS NAMED HEREIN,
THE LENDING INSTITUTIONS LISTED HEREIN,
FLEET CORPORATE FINANCE, INC.,
as SYNDICATION AGENT,
and
BANKERS TRUST COMPANY,
as ADMINISTRATIVE AGENT
----------------------------------
Dated as of November 27, 1998
----------------------------------
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
1. AMOUNT AND TERMS OF CREDIT.............................................1
1.01. The Commitments................................................1
1.02. Amount of Borrowing............................................1
1.03. Disbursement of Funds..........................................1
1.04. Notes..........................................................2
1.05. Pro Rata Borrowings............................................2
1.06. Interest.......................................................3
1.07. Increased Costs, Illegality, etc...............................3
1.08. Compensation...................................................5
1.09. Change of Lending Office.......................................6
1.10. Replacement Lenders............................................6
1.11. Fees...........................................................7
2. PREPAYMENTS; PAYMENTS; TAXES...........................................7
2.01. Voluntary Prepayments..........................................7
2.02. Mandatory Offers to Prepay and Mandatory Prepayments...........8
2.03. Notice and Procedures.........................................10
2.04. Method and Place of Payment...................................12
2.05. Notation of Payment...........................................12
2.06. Net Payments..................................................12
3. CONDITIONS PRECEDENT TO THE BORROWING DATE............................15
3.01. Execution of Agreement; Notes.................................15
3.02. No Default; Representations and Warranties....................15
3.03. Officers' Certificate.........................................15
3.04. Opinions of Counsel...........................................15
3.05. Corporate Proceedings.........................................16
3.06. Adverse Change, etc...........................................16
3.07. Litigation....................................................16
3.08. Approvals.....................................................16
3.09. Consummation of the Transaction...............................17
3.10. Essex Credit Agreement........................................17
3.11. Payment of Fees...............................................18
3.12. Solvency Certificate; Evidence of Insurance...................18
3.13. Margin Regulations............................................19
3.14. Senior Secured Credit Agreement...............................19
-i-
<PAGE>
Page
----
3.15. Representations and Warranties in Senior Secured
Credit Agreement...........................................19
3.16. Creation of the Borrower......................................19
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS............................20
4.01. Corporate Status..............................................20
4.02. Corporate Power and Authority.................................20
4.03. No Violation..................................................20
4.04. Use of Proceeds...............................................21
4.05. Governmental Approvals........................................21
4.06. Investment Company Act; Public Utility Holding
Company Act................................................21
4.07. True and Complete Disclosure..................................21
4.08. Financial Condition; Financial Statements.....................22
4.09. Transaction...................................................23
4.10. Compliance with ERISA.........................................24
4.11. Subsidiaries..................................................25
4.12. Intellectual Property.........................................25
4.13. Compliance with Statutes, etc.................................26
4.14. Environmental Matters.........................................26
4.15. Properties....................................................27
4.16. Labor Relations...............................................27
4.17. Tax Returns and Payments......................................28
4.18. Year 2000.....................................................28
5. AFFIRMATIVE COVENANTS.................................................28
5.01. Information Covenants.........................................29
5.02. Books, Records and Inspections................................31
5.03. Insurance.....................................................31
5.04. Payment of Taxes..............................................31
5.05. Compliance with Statutes, etc.................................32
5.06. Corporate Franchises..........................................32
5.07. Good Repair...................................................32
5.08. Year 2000.....................................................32
6. NEGATIVE COVENANTS....................................................33
6.01. Indebtedness..................................................33
6.02. Restricted Payments...........................................36
6.03. Asset Sales...................................................39
6.04. Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries.....................................40
-ii-
<PAGE>
Page
----
6.05. Liens.........................................................41
6.06. Senior Subordinated Debt......................................41
6.07. Merger, Consolidation and Sale of Assets......................41
6.08. Transactions with Affiliates..................................43
6.09. Additional Guarantees.........................................44
6.10. Designation of Unrestricted Subsidiaries......................45
6.11. Conduct of Business...........................................46
7. EVENTS OF DEFAULT.....................................................46
7.01. Failure to Make Payments When Due.............................46
7.02. Representations, etc..........................................46
7.03. Breach of Covenants...........................................46
7.04. Default Under Other Agreements................................47
7.05. Judgments.....................................................47
7.06. Bankruptcy....................................................47
7.07. Merger........................................................48
7.08. Guarantees....................................................48
7.09. Remedies......................................................48
8. SUBORDINATION.........................................................49
8.01. Obligations Subordinated to Senior Indebtedness...............49
8.02. Suspension of Payment When Senior Indebtedness Is in
Default....................................................50
8.03. Loans Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or
Reorganization of Borrower.................................51
8.04. Lenders to Be Subrogated to Rights of Holders of
Senior Indebtedness........................................53
8.05. Obligations of the Borrower Unconditional.....................53
8.06. Administrative Agent Entitled to Assume Payments Not
Prohibited in Absence of Notice............................54
8.07. Application by Administrative Agent of Assets
Deposited with It..........................................54
8.08. No Waiver of Subordination Provisions.........................55
8.09. Lenders Authorize Administrative Agent to Effectuate
Subordination of Loans.....................................55
8.10. Right of Administrative Agent and Lenders to Hold
Senior Indebtedness........................................56
8.11. This Section 8 Not to Prevent Events of Default...............56
8.12. No Fiduciary Duty of Administrative Agent to Holders
of Senior Indebtedness.....................................56
8.13. Effect on Senior Indebtedness.................................56
-iii-
<PAGE>
Page
----
9. DEFINITIONS AND ACCOUNTING TERMS......................................57
9.01. Defined Terms.................................................57
10. THE AGENTS...........................................................88
10.01. Appointment..................................................88
10.02. Delegation of Duties.........................................89
10.03. Exculpatory Provisions.......................................89
10.04. Reliance by Agent............................................89
10.05. Notice of Default............................................90
10.06. Nonreliance on Agent and Other Lenders.......................90
10.07. Indemnification..............................................91
10.08. Agent in Its Individual Capacity.............................91
10.09. Holders......................................................91
10.10. Resignation of the Administrative Agent; Successor
Administrative Agent.......................................92
11. MISCELLANEOUS........................................................92
11.01. Payment of Expenses, etc.....................................92
11.02. Right of Setoff..............................................93
11.03. Notices......................................................93
11.04. Benefit of Agreement.........................................94
11.05. No Waiver; Remedies Cumulative...............................95
11.06. Payments Pro Rata............................................95
11.07. Calculations; Computations...................................96
11.08. Governing Law; Submission to Jurisdiction; Venue.............96
11.09. Counterparts.................................................97
11.10. Effectiveness................................................97
11.11. Headings Descriptive.........................................97
11.12. Amendment or Waiver; etc.....................................97
11.13. Survival.....................................................99
11.14. Domicile of Loans............................................99
11.15. Register.....................................................99
11.16. Confidentiality..............................................99
11.17. Waiver of Jury Trial........................................100
11.18. Margin Stock................................................100
11.19. DNE Systems.................................................100
12. GUARANTEE...........................................................101
12.01. The Guarantee...............................................101
12.02. Nature of Liability.........................................103
-iv-
<PAGE>
Page
----
12.03. Independent Obligation......................................103
12.04. Authorization...............................................103
12.05. Reliance....................................................104
12.06. Subordination...............................................105
12.07. Waiver......................................................105
12.08. Release of Guarantee........................................106
SCHEDULE I Commitments
SCHEDULE II Lender Addresses
SCHEDULE III Real Property
SCHEDULE IV Subsidiaries
SCHEDULE V Existing Indebtedness
SCHEDULE VI Financial Condition
SCHEDULE VII Environmental Matters
SCHEDULE VIII Existing Investments
SCHEDULE IX Tax Returns and Payments
SCHEDULE X Essex Capital Lease Facility Liens
SCHEDULE XI Credit Party Addresses
EXHIBIT A Form of Senior Subordinated Term Note
EXHIBIT B Form of Section 2.06(b)(ii) Certificate
EXHIBIT C Form of Opinion of Proskauer Rose LLP,
Special Counsel to the Credit Parties
EXHIBIT D Form of Officers' Certificate
EXHIBIT E Form of Solvency Certificate
EXHIBIT F Form of Assignment and Assumption Agreement
EXHIBIT G Form of Trust Preferred Securities Documents
-v-
<PAGE>
SENIOR SUBORDINATED CREDIT AGREEMENT, dated as of November 27, 1998,
among SUPERIOR/ESSEX CORP., a Delaware corporation (the "Borrower"), SUPERIOR
TELECOM INC., a Delaware corporation (the "Parent"), the Subsidiary Guarantors
named herein (the "Guarantors"), the Lenders party hereto from time to time,
FLEET CORPORATE FINANCE, INC., as Syndication Agent, and BANKERS TRUST COMPANY,
as Administrative Agent (all capitalized terms used herein and defined in
Section 9 are used herein as therein defined).
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions set forth
herein, the Lenders are willing to make available to the Borrower the Loans
provided for herein;
NOW, THEREFORE, IT IS AGREED:
1. AMOUNT AND TERMS OF CREDIT.
1.01. The Commitments. Subject to and upon the terms and conditions
set forth herein, each Lender with a Commitment severally agrees to make a
senior subordinated term loan (each a "Loan" and, collectively, the "Loans") to
the Borrower, which Loans (i) only may be incurred by the Borrower on the
Borrowing Date and (ii) shall be made by each such Lender in that aggregate
principal amount which does not exceed the Commitment of such Lender on the
Borrowing Date. Once repaid, Loans incurred hereunder may not be reborrowed.
1.02. Amount of Borrowing. The Borrowing of the Loans will be in a
maximum aggregate amount of $200,000,000 made available in a single Borrowing on
the Borrowing Date.
1.03. Disbursement of Funds. No later than 12:00 Noon (New York
time) on the Borrowing Date, each Lender with a Commitment will make available
its pro rata portion (determined in accordance with Section 1.05) of the Loans.
All such amounts will be made available in Dollars and in immediately available
funds at the Payment Office, and the Administrative Agent will promptly make
available to the Borrower at the Payment Office the aggregate of the amounts so
made available by the Lenders. Unless the Administrative Agent shall have been
notified by any Lender prior to the Borrowing Date that such Lender does not
intend to make available to the Administrative Agent such Lender's portion of
the Borrowing to be made on such date, the Administrative Agent may assume that
such Lender has made such amount available to the Administrative Agent on the
Borrowing Date and the Administrative Agent may (but shall not be obligated to),
in reliance upon such assumption, make available to the Borrower a corresponding
amount. If such corresponding amount is not in fact made available to the
Administrative Agent by such Lender, the Administrative Agent shall be entitled
to recover such corresponding amount on demand from
<PAGE>
such Lender. If such Lender does not pay such corresponding amount forthwith
upon the Administrative Agent's demand therefor, the Administrative Agent shall
promptly notify the Borrower and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent also
shall be entitled to recover on demand from such Lender or the Borrower, as the
case may be, interest on such corresponding amount in respect of each day from
the date such corresponding amount was made available by the Administrative
Agent to the Borrower until the date such corresponding amount is recovered by
the Administrative Agent, at a rate per annum equal to (i) if recovered from
such Lender, at the overnight Federal Funds Rate and (ii) if recovered from the
Borrower, the rate of interest applicable to the respective Borrowing, as
determined pursuant to Section 1.06. Nothing in this Section 1.03 shall be
deemed to relieve any Lender from its obligation to make Loans hereunder or to
prejudice any rights which the Borrower may have against any Lender as a result
of any failure by such Lender to make Loans hereunder.
1.04. Notes. (a) The Borrower's obligation to pay the principal of,
and interest on, the Loans made by each Lender shall be set forth in the
Register maintained by the Administrative Agent pursuant to Section 11.15 and
shall, if requested by any Lender, also be evidenced by a promissory note duly
executed and delivered by the Borrower and the Guarantors substantially in the
form of Exhibit A, with blanks appropriately completed in conformity herewith
(each a "Note" and, collectively, the "Notes").
(b) The Note issued to each Lender shall (i) be executed by the
Borrower and the Guarantors, (ii) be payable to such Lender or its registered
assigns and be dated the Borrowing Date, (iii) be in a stated principal amount
equal to the Loans made by such Lender on the Borrowing Date and be payable in
the outstanding principal amount of Loans evidenced thereby, (iv) mature on the
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.06, (vi) be subject to voluntary prepayment as provided in Section
2.01, mandatory repayments as provided in Sections 2.02(c) and (d) and mandatory
offers to prepay as provided in Section 2.02(a) and (b), and (vii) be entitled
to the benefits of this Agreement and the other Credit Documents.
(c) Each Lender will note on its internal records the amount of the
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in such notation shall not affect the Borrower's obligations in
respect of such Loans.
1.05. Pro Rata Borrowings. All Borrowings of Loans under this
Agreement shall be incurred from the Lenders pro rata on the basis of their
Commitments. It is understood that no Lender shall be responsible for any
default by any other Lender of its obligation to make Loans hereunder and that
each Lender shall be obligated to make the
-2-
<PAGE>
Loans provided to be made by it hereunder, regardless of the failure of any
other Lender to make its Loans hereunder.
1.06. Interest. (a) The Borrower agrees to pay interest in respect
of the unpaid principal amount of each Loan from the date of Borrowing thereof
until the maturity thereof (whether by acceleration or otherwise) at a rate per
annum equal to the then applicable Interest Rate.
(b) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to the rate which
is 2% in excess of the rate then borne by such Loans. Interest which accrues
under this Section 1.06(b) shall be payable on demand.
(c) Accrued (and theretofore unpaid) interest shall be payable (i)
in respect of each Loan, quarterly in arrears on each Interest Payment Date and
(ii) in respect of each Loan, on any repayment or prepayment (on the amount
repaid or prepaid), at maturity (whether by acceleration or otherwise) and,
after such maturity, on demand.
(d) Upon each Interest Determination Date, the Administrative Agent
shall determine the Interest Rate applicable to the Loans and shall promptly
notify the Borrower and the Lenders thereof. Each such determination shall,
absent manifest error, be final and conclusive and binding on all parties
hereto.
1.07. Increased Costs, Illegality, etc. (a) In the event that (x) in
the case of clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Lender shall have determined (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto):
(i) on any date for determining LIBOR for any Interest Period, that,
by reason of any changes arising after the date of this Agreement
affecting LIBOR, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of
LIBOR; or
(ii) at any time, that such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any LIBOR Loans (other than any increased cost or reduction in the amount
received or receivable resulting from the imposition of or a change in the
rate of net income taxes or similar charges) because of (x) any change
since the date of this Agreement in any applicable law, governmental rule,
regulation, guideline, order or request (whether or not having the force
of law), or in the interpretation or administration thereof and including
the introduction of any new law or governmental rule, regulation,
guideline,
-3-
<PAGE>
order or request (such as, for example, but not limited to, a change in
official reserve requirements) and/or (y) other circumstances affecting
such Lender or the position of such Lender in such market; or
(iii) at any time since the date of this Agreement, that the making
or continuance of any LIBOR Loan has become unlawful by compliance by such
Lender in good faith with any law, governmental rule, regulation,
guideline or order (or would conflict with any such governmental rule,
regulation, guideline or order not having the force of law but with which
such Lender customarily complies even though the failure to comply
therewith would not be unlawful), or has become impracticable as a result
of a contingency occurring after the date of this Agreement which
materially and adversely affects LIBOR;
then, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall (x) within five Business Days after any such
event and (y) within five Business Days of the date on which such event no
longer exists give notice (by telephone confirmed in writing) to the Borrower
and (except in the case of clause (i)) to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Lenders). Thereafter, (x) in the case of clause (i) above,
LIBOR Loans shall no longer be available until such time as the Administrative
Agent notifies the Borrower and the Lenders that the circumstances giving rise
to such notice by the Administrative Agent no longer exist (which notice the
Administrative Agent shall endeavor to give promptly after any express
determination thereof by the Administrative Agent), and the Loans will be
converted from LIBOR Loans to Alternate Base Rate Loans, (y) in the case of
clause (ii) above, the Borrower shall pay to such Lender, upon written demand
therefor (accompanied by the written notice referred to below), such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Lender in its sole discretion shall
determine) as shall be required to compensate such Lender for such increased
costs or reductions in amounts received or receivable hereunder (a written
notice as to the additional amounts owed to such Lender, showing the basis for
the calculation thereof, submitted to the Borrower by such Lender shall, absent
manifest error, be final and conclusive and binding upon all parties hereto) and
(z) in the case of clause (iii) above, the Borrower shall take one of the
actions specified in Section 1.07(b) as promptly as possible and, in any event,
within the time period required by law.
(b) At any time that any LIBOR Loan is affected by the circumstances
described in Section 1.07(a)(ii) or (iii), the Borrower may (and in the case of
a LIBOR Loan affected pursuant to Section 1.07(a)(iii) the Borrower shall)
either (i) if the affected LIBOR Loan is then being made pursuant to a
Borrowing, cancel said Borrowing by giving the Administrative Agent telephonic
notice (confirmed promptly in writing) thereof on the same date that the
Borrower was notified by a Lender pursuant to Section 1.07(a)(ii) or
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(iii)), or (ii) if the affected LIBOR Loan is then outstanding, upon at least
two Business Days' notice to the Administrative Agent, require the affected
Lender to convert each such LIBOR Loan into an Alternate Base Rate Loan (which
conversion, in the case of the circumstances described in Section 1.07(a)(iii),
shall occur no later than the last day of the Interest Period then applicable to
such LIBOR Loan (or such earlier date as shall be required by applicable law));
provided that if more than one Lender is affected at any time, then all affected
Lenders must be treated the same pursuant to this Section 1.07(b).
(c) If any Lender shall have determined that the adoption or
effectiveness of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Lender or any corporation controlling such Lender with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, in each case, after the
date of this Agreement, has or would have the effect of reducing the rate of
return on such Lender's or such other corporation's capital or assets as a
consequence of such Lender's Commitments or obligations hereunder to a level
below that which such Lender or such other corporation could have achieved but
for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's or such other corporation's policies with respect to
capital adequacy), then from time to time, upon written demand by such Lender
(with a copy to the Administrative Agent), accompanied by the notice referred to
in the last sentence of this clause (c), the Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such other
corporation for such reduction. Each Lender, upon determining in good faith that
any additional amounts will be payable pursuant to this Section 1.07(c), will
give prompt written notice thereof to the Borrower, which notice shall set forth
the basis of the calculation of such additional amounts, although the failure to
give any such notice shall not release or diminish the Borrower's obligations to
pay additional amounts pursuant to this Section 1.07(c) upon the subsequent
receipt of such notice.
1.08. Compensation. The Borrower shall compensate each Lender,
promptly upon its written request (which request shall set forth the basis for
requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Lender to fund its LIBOR Loans but excluding loss of
anticipated profit with respect to any LIBOR Loans) which such Lender may
sustain: (i) if any repayment (including any repayment made pursuant to Section
2.01 or 2.02 or as a result of an acceleration of the Loans pursuant to Section
7) or conversion of any LIBOR Loans occurs on a date which is not the last day
of an Interest Period applicable thereto; (ii) if any prepayment of any LIBOR
Loans is not made on any date specified in a notice of prepayment given by the
Borrower; or (iii) as a consequence of (x) any other de-
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fault by the Borrower to repay its LIBOR Loans when required by the terms of
this Agreement or (y) an election made pursuant to Section 1.07(b). It is
further understood and agreed that if any repayment of LIBOR Loans pursuant to
Section 2.01 or any conversion of LIBOR Loans in either case occurs on a date
which is not the last day of an Interest Period applicable thereto, such
repayment or conversion shall be accompanied by any amounts owing to any Lender
pursuant to this Section 1.08.
1.09. Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.07(a)(ii) or
(iii), 1.07(c) or 2.06 with respect to such Lender, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such
event; provided that such designation is made on such terms that, in the sole
judgment of such Lender, such Lender and its lending office suffer no economic,
legal or regulatory disadvantage, with the object of avoiding the consequences
of the event giving rise to the operation of any such Section. Nothing in this
Section 1.09 shall affect or postpone any of the obligations of the Borrower or
the right of any Lender provided in Section 1.07 or 2.06.
1.10. Replacement Lenders. (x) Upon the occurrence of any event
giving rise to the operation of Section 1.07(a)(ii) or (iii), Section 1.07(c) or
Section 2.06 with respect to any Lender which results in such Lender charging to
the Borrower increased costs in excess of those being generally charged by the
other Lenders or (y) in the case of a refusal by a Lender to consent to a
proposed change, waiver, discharge or termination with respect to this Agreement
which has been approved by the Required Lenders as provided in Section 11.12,
the Borrower shall have the right, if no Default or Event of Default then exists
or, in the case of clause (y) above, would exist after giving effect to such
replacement, to replace such Lender (the "Replaced Lender") with one or more
other Eligible Transferees (collectively, the "Replacement Lender"), each of
whom shall be acceptable to the Administrative Agent; provided that (i) at the
time of any replacement pursuant to this Section 1.10, the Replacement Lender
shall enter into one or more Assignment and Assumption Agreements pursuant to
Section 11.04(b) (and with all fees payable pursuant to said Section 11.04(b) to
be paid by the Replacement Lender) pursuant to which the Replacement Lender
shall acquire the outstanding Loans of the Replaced Lender and, in connection
therewith, shall pay to the Replaced Lender in respect thereof an amount equal
to the sum of (A) an amount equal to the principal of, and all accrued interest
on, all outstanding Loans of the Replaced Lender and (B) an amount equal to all
accrued, but theretofore unpaid, fees owing to the Replaced Lender, and (ii) all
obligations of the Borrower then owing to the Replaced Lender (other than those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid, but including all
amounts, if any, owing under Section 1.08) shall be paid in full to such
Replaced Lender, concurrently with such replacement. Upon the execution of the
re-
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spective Assignment and Assumption Agreements, the payment of amounts referred
to in clauses (i) and (ii) above, recordation of the assignment on the Register
by the Administrative Agent pursuant to Section 11.15 and, if so requested by
the Replacement Lender, of the appropriate Note or Notes executed by the
Borrower, the Replacement Lender shall become a Lender hereunder and the
Replaced Lender shall cease to constitute a Lender hereunder, except with
respect to indemnification provisions under this Agreement (including, without
limitation, Sections 1.07, 1.08, 2.06, 11.01 and 11.06), which shall survive as
to such Replaced Lender.
1.11. Fees. (a) On the Borrowing Date, the Borrower shall pay to the
Administrative Agent for the account of the Lenders pro rata on the basis of
their Percentages, a fee computed at a rate equal to 1.25% of the Borrowing
Amount.
(b) On each of the sixth (6) and the twelfth (12) month
anniversaries of the Borrowing Date, the Borrower shall pay to the
Administrative Agent for the account of the Lenders pro rata on the basis of the
principal amount of their Loans then outstanding, a fee computed at a rate equal
to .50% of the aggregate principal amount of the Loans then outstanding on such
anniversary date.
2. PREPAYMENTS; PAYMENTS; TAXES.
2.01. Voluntary Prepayments. The Borrower shall have the right to
prepay the Loans, without premium or penalty, in whole or in part at any time
and from time to time on the following terms and conditions:
(i) the Borrower shall prepay Loans at 100% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of
prepayment;
(ii) the Borrower shall give the Administrative Agent prior to 2:00
p.m. (New York time) at the Notice Office at least three Business Days'
prior written notice (or telephonic notice promptly confirmed in writing)
of its intent to prepay Loans ("Notice of Voluntary Prepayment") and the
amount of such prepayment, which notice the Administrative Agent shall
promptly transmit to each of the Lenders;
(iii) without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice of any prepayment of Loans, the
Administrative Agent may act without liability upon the basis of
telephonic notice of such prepayment believed by the Administrative Agent
in good faith to be from the chairman of the board, the chief executive
officer, the president, the chief financial officer, the treasurer or any
assistant treasurer of the Borrower, or from any other authorized officer
of the Borrower designated in writing by any of the foregoing officers of
the
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Borrower to the Administrative Agent as being authorized to give such
notices, prior to receipt of written confirmation. The Borrower hereby
waives the right to dispute the Administrative Agent's record of the terms
of such telephonic notice of such prepayment of Loans absent manifest
error;
(iv) each partial prepayment of Loans pursuant to this Section 2.01
shall be in an aggregate principal amount of at least $1,000,000 and in
integral multiples of $100,000 in excess thereof; and
(v) each prepayment pursuant to this Section 2.01 in respect of any
Loans shall be applied pro rata among such Loans.
2.02. Mandatory Offers to Prepay and Mandatory Prepayments.
(a) Prepayments from Asset Sale. Upon the consummation of an Asset
Sale, the Borrower shall apply, or cause a Restricted Subsidiary to apply, the
Net Cash Proceeds relating to such Asset Sale within 365 days of receipt
thereof, or such later date if prior to such 365th day the Borrower or a
Restricted Subsidiary shall have entered into a binding agreement to so use such
Net Cash Proceeds within 180 days after the date of such agreement, either (A)
to repay any Senior Indebtedness of the Borrower, (B) to reinvest in assets
(including Capital Stock of a Person that directly or indirectly owns assets) of
a kind used or usable in the business of the Company and its Restricted
Subsidiaries as, or related or incidental to such business, conducted on the
Borrowing Date (hereinafter referred to as "Replacement Assets") or (C) a
combination of repayment and investment permitted by the foregoing clauses (A)
and (B). On the 366th day after an Asset Sale or such earlier date, if any, as
the Board of Directors of the Borrower or of such Restricted Subsidiary
determines not to apply the Net Cash Proceeds relating to such Asset Sale as set
forth in clauses (A), (B) and (C) of the next preceding sentence, or such later
date (which date shall not be later than the 180th day after the date of the
binding agreement referred to in the immediately preceding sentence) (each, a
"Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds
which have not been applied on or before such Net Proceeds Offer Trigger Date as
permitted in clauses (A), (B) and (C) of the next preceding sentence (each a
"Net Proceeds Offer Amount") shall be applied by the Borrower or such Restricted
Subsidiary to make an offer to prepay the Loans (the "Net Proceeds Offer") at a
price equal to 100% of the aggregate principal amount thereof, plus accrued and
unpaid interest, if any, to the date of prepayment, on a date (the "Net Proceeds
Offer Payment Date") in accordance with the procedures set forth in Sections
2.03 through 2.06. The Borrower may defer the Net Proceeds Offer until there is
an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $7.5
million resulting from one or more Asset Sales (at which time, the entire
unutilized Net Proceeds Offer Amount, and not just the amount in excess of $7.5
million, shall be applied as required pursuant to this paragraph).
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(b) Prepayments from Change of Control. (i) Within 30 days following
any Change of Control (each a "Change of Control Offer Trigger Date"; together
with the Net Proceeds Offer Trigger Date, the "Trigger Date"), the Borrower will
be obligated to offer to each Lender to prepay the Loans (the "Change of Control
Offer Amount"; together with the Net Proceeds Offer Amount, the "Prepayment
Amount") at a price equal to 101% of the aggregate principal amount thereof,
plus accrued and unpaid interest, if any, to the date of prepayment (the "Change
of Control Offer"; together with the Net Proceeds Offer, the "Mandatory
Prepayment Offer") on a date (the "Change of Control Offer Payment Date";
together with the Net Proceeds Offer Payment Date, the "Payment Date") in
accordance with the procedures set forth in Sections 2.03 through 2.06.
(ii) Prior to the mailing of the notice to the Administrative Agent
provided for in Section 2.03 below but in any event within 30 days following any
Change of Control, the Borrower hereby covenants to (i) repay in full all
Indebtedness under the Senior Secured Credit Agreement and all other Senior
Indebtedness the terms of which require a repayment upon a Change of Control and
to terminate all commitments under the Senior Secured Credit Agreement and all
such other Senior Indebtedness or to offer to repay in full all such
Indebtedness and to terminate all such commitments and to repay the Indebtedness
(and terminate the commitments) of each lender under the Senior Secured Credit
Agreement and all such other Senior Indebtedness who has accepted such offer or
(ii) obtain the requisite consents under the Senior Secured Credit Agreement and
all such other Senior Indebtedness to permit the payment of the Loans. The
Borrower shall first comply with the covenant in the preceding sentence before
it shall be required to prepay the Loans pursuant to this Section 2.02(b). The
Borrower's failure to comply with the covenant described in this clause (ii)
shall constitute an Event of Default under Section 7.03 and not Section 7.01.
(c) Prepayments from Issuances of Debt. In addition to any other
mandatory repayments pursuant to this Section 2.02, on each date on or after the
Borrowing Date on which the Borrower or any of its Restricted Subsidiaries or
the Parent receives any cash proceeds from either (I) any incurrence of
Indebtedness (other than Indebtedness permitted to be incurred pursuant to
Section 6.01 or Section 6.12) by the Borrower or any of its Restricted
Subsidiaries or the Parent or (II) any Receivables Financing Agreement (to the
extent that the amount made available thereunder exceeds $150.0 million), an
amount equal to 100% of the cash proceeds (net of all underwriting discounts,
fees and commissions and other costs and expenses associated therewith) of the
respective incurrence of Indebtedness shall be applied as a mandatory repayment
of principal of outstanding Loans in accordance with Sections 2.03 through 2.06,
except to the extent required to repay Indebtedness under the Senior Secured
Credit Agreement.
(d) Prepayments from Issuances of Equity. In addition to any other
mandatory repayments or commitment reductions pursuant to this Section 2.02, on
each date on or
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after the Borrowing Date on which the Borrower or any of its Restricted
Subsidiaries or the Parent receives any cash proceeds from any sale or issuance
of preferred or common equity of (or cash capital contributions to) the Borrower
or any of its Restricted Subsidiaries or the Parent (other than proceeds
received from (u) sale of Margin Stock prior to consummation of the Merger, (v)
the Transaction, (w) issuances of options to purchase the Parent Common Stock to
management, directors, non-employee consultants and employees of the Parent and
its Subsidiaries, (x) issuances of the Parent Common Stock (including as a
result of the exercise of any options with regard thereto) to management,
directors, non-employee consultants, and employees of the Parent and its
Subsidiaries, (y) issuance of Parent Common Stock as consideration for an
acquisition and (z) equity contributions to any Subsidiary of the Borrower made
by the Borrower or any other Subsidiary of the Borrower), an amount equal to 75%
of such cash proceeds (net of all underwriting discounts, fees and commissions
and other costs and expenses associated therewith) of the respective equity
issuance or capital contribution shall be applied as a mandatory repayment of
principal of outstanding Loans in accordance with Sections 2.03 through 2.06;
provided, however, that if, on the date of receipt of such cash proceeds, the
ratio of (x) total Indebtedness of the Borrower and its Restricted Subsidiaries
on a consolidated basis as of the end of the most recently completed fiscal
quarter (without treating the Trust Preferred Securities as Indebtedness) to (y)
Consolidated EBITDA for the four consecutive fiscal quarters of the Borrower
ended on or immediately prior to such date, in each case on a pro forma basis,
is less than 4.00 to 1.00, then only 50% of such cash proceeds of the respective
equity issuance or capital contribution shall be required to be applied as a
mandatory repayment of principal of outstanding Loans.
2.03. Notice and Procedures. (a) With respect to each Mandatory
Prepayment Offer, the Borrower shall mail to the Administrative Agent at the
Notice Office, a notice of prepayment (the "Mandatory Prepayment Offer Notice"),
within 25 days following the Trigger Date, with a copy to each of the Lenders.
Upon receiving a Mandatory Prepayment Offer Notice, Lenders may elect to have
their Loans prepaid in whole or in part in integral multiples of $1,000 in
exchange for cash. To the extent Lenders properly accept the offer to prepay the
Loans in an amount exceeding the Net Proceeds Offer Amount pursuant to an Asset
Sale, Loans of tendering Lenders will be prepaid on a pro rata basis (based on
amounts tendered).
A Mandatory Prepayment Offer shall remain open for a period of 20
Business Days or such longer period as may be required by law.
The notice to the Administrative Agent described in the first
paragraph of this Section 2.03(a) shall contain all instructions and materials
necessary to enable the Borrower to prepay the Loans:
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(i) that a Net Proceeds Offer or a Change of Control Offer, as the
case may be, is being made pursuant to Section 2.02 and that all Loans
validly tendered will be accepted for payment;
(ii) the purchase price and the purchase date, which shall be no
earlier than 30 days nor later than 40 days from the date such notice is
mailed (the "Payment Date");
(iii) that any Loan not tendered will continue to accrue interest;
(iv) that any Loan accepted for payment pursuant to the Mandatory
Prepayment Offer shall cease to accrue interest after the Payment Date
unless the Borrower shall default in the payment of the repurchase price
of the Loans;
(v) that if a Lender elects to have its Loan prepaid pursuant to the
Mandatory Prepayment Offer, it will be required to surrender any Note held
by it to the Borrower prior to 5:00 p.m. New York time on the Payment
Date;
(vi) that a Lender will be entitled to withdraw its election if the
Borrower receives, not later than 5:00 p.m. New York time on the Business
Day preceding the Payment Date, a telegram, telex, facsimile transmission
or letter setting forth the principal amount of Loans such Lender
delivered for prepayment, and a statement that such Lender is withdrawing
its election to have such Loan prepaid; and
(vii) that if Loans are prepaid only in part, a new Note of the same
type will be issued in principal amount equal to the non-prepaid portion
of the Loans surrendered.
On or before the Payment Date, the Borrower shall (i) accept for
prepayment Loans or portions thereof which are to be prepaid in accordance with
the above, and (ii) deposit at the Payment Office Dollars sufficient to pay the
purchase price of all Loans to be prepaid. The Administrative Agent shall
promptly mail to the Lenders whose Loans are so accepted payment in an amount
equal to the purchase price therefor. Any Net Cash Proceeds remaining after the
Borrower has complied with its obligations under Section 2.02(a) shall be
available to the Borrower for general corporate purposes and the aggregate
unutilized Net Proceeds Offer Amount shall be reset to zero.
(b) With respect to each prepayment of Loans pursuant to Section
2.02, each prepayment of any Loans made pursuant to a Borrowing shall be applied
pro rata among such Loans. In the absence of a designation by the Borrower as
described in the previous sentence, the Administrative Agent shall make such
designation in its sole discretion.
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(c) Notwithstanding anything to the contrary contained in this
Agreement or in any other Credit Document, all then outstanding Loans shall be
repaid in full on the Maturity Date.
(d) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, if on the date any required prepayment or repayment hereunder
(other than on the Maturity Date) is to be made and as a result thereof breakage
costs would become due and owing under Section 1.08, so long as no Default or
Event of Default shall have occurred and be continuing, the Borrower, at its
option, may, in lieu of making any such prepayment or repayment, place any
amounts which would otherwise be required to be so prepaid or repaid in an
interest-bearing cash collateral account established with the Administrative
Agent (on terms and conditions satisfactory to the Administrative Agent) for the
benefit of the Lenders until the expiration of the Interest Periods applicable
to the subject LIBOR Loans, at which time such amounts shall be applied to such
required prepayments or repayments, as the case may be.
2.04. Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or under any Note shall be
made to the Administrative Agent for the account of the Lender or Lenders
entitled thereto not later than 2:00 P.M. (New York time) on the date when due
and shall be made in Dollars in immediately available funds at the Payment
Office; funds received by the Administrative Agent after that time shall be
deemed to have been paid by the Borrower on the next succeeding Business Day.
Whenever any payment to be made hereunder or under any Note shall be stated to
be due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest shall be payable at the applicable rate during such
extension. The Borrower hereby authorizes the Administrative Agent to charge its
account with the Administrative Agent in order to cause timely payment to be
made of all principal, interest and fees due hereunder (subject to sufficient
funds being available in its account for that purpose).
2.05. Notation of Payment. Each Lender agrees that before disposing
of any Note held by it, or any part thereof (other than by granting
participations therein), such Lender will make a notation thereon of all
principal payments previously made thereon and of the date to which interest
thereon has been paid and will notify the Borrower of the name and address of
the transferee of that Note; provided, however, that the failure to make (or any
error in the making of) such a notation or to notify the Borrower of the name
and address of such transferee shall not limit or otherwise affect the
obligation of the Borrower hereunder or under such Notes with respect to the
Loans and payments of principal or interest on any such Note.
2.06. Net Payments. (a) All payments made by the Borrower hereunder
or under any Note will be made without setoff, counterclaim or other defense
(which payment
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shall not be deemed a waiver of any claims under this Agreement). Except as
provided in Section 2.06, all such payments will be made free and clear of, and
without deduction or withholding for, any present or future taxes, levies,
imposts, duties, fees, assessments or other charges of whatever nature now or
hereafter imposed by any jurisdiction or by any political subdivision or taxing
authority thereof or therein with respect to such payment (but excluding, except
as provided in the second succeeding sentence, any tax (including any franchise
tax) imposed on or measured by the net income or net profits of a Lender
pursuant to the laws of the jurisdiction in which it is organized or the
jurisdiction in which the principal office or applicable lending office of such
Lender is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect thereto (all such nonexcluded
taxes, levies, imposts, duties, fees, assessments or other charges being
referred to collectively as "Taxes"). If any Taxes are so levied or imposed, the
Borrower agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Agreement or under any Note, after withholding or deduction for or on account of
any Taxes, will not be less than the amount provided for herein or in such Note.
If any amounts are payable in respect of Taxes pursuant to the preceding
sentence, the Borrower agrees to reimburse each Lender, upon the written request
of such Lender, for taxes imposed on or measured by the net income or net
profits of such Lender pursuant to the laws of the jurisdiction in which the
principal office or applicable lending office of such Lender is located or under
the laws of any political subdivision or taxing authority of any such
jurisdiction in which the principal office or applicable lending office of such
Lender is located and for any withholding of taxes as such Lender shall
determine are payable by, or withheld from, such Lender in respect of such
amounts so paid to or on behalf of such Lender pursuant to the preceding
sentence and in respect of any amounts paid to or on behalf of such Lender
pursuant to this sentence; provided, however, that no such reimbursement shall
be required unless such Lender determines that the amount of such Taxes exceeds
the amount of any credit, allowance or deduction allowable to such Lender as an
offset against any taxes payable on behalf of such Lender and in such event
reimbursement shall not be required in any amount greater than such excess. The
Borrower will furnish to the Administrative Agent within 45 days after the date
the payment of any Taxes is due pursuant to applicable law certified copies of
tax receipts evidencing such payment by the Borrower. The Borrower agrees to
indemnify and hold harmless each Lender and the Administrative Agent, and
reimburse such Lender and the Administrative Agent upon its written request, for
the amount of any Taxes so levied or imposed and paid by such Lender or the
Administrative Agent. A certificate as to the amount of any such required
indemnification payment prepared by such Lender or the Administrative Agent
shall be final, conclusive and binding for all purposes absent manifest error.
(b) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower
and the Admin-
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istrative Agent on or prior to the Closing Date, or in the case of a Lender that
is an assignee or transferee of an interest under this Agreement pursuant to
Section 1.10 or Section 11.04 (unless the respective Lender was already a Lender
hereunder immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Lender, (i) two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor forms)
certifying to such Lender's entitlement to a complete exemption from United
States withholding tax with respect to payments to be made under this Agreement
and under any Note, or (ii) if the Lender is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form 1001 or 4224 pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit B (any such certificate, a "Section
2.06(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8 (or successor form) certifying to
such Lender's entitlement to a complete exemption from United States withholding
tax with respect to payments of interest to be made under this Agreement and
under any Note. In addition, each Lender agrees that from time to time after the
Closing Date, when a lapse in time or change in circumstances renders the
previous certification obsolete or inaccurate in any material respect, it will
deliver promptly to the Borrower and the Administrative Agent two new accurate
and complete original signed copies of Internal Revenue Service Form 4224 or
1001, or Form W-8 and a Section 2.06(b)(ii) Certificate, as the case may be, and
such other forms as may be required in order to confirm or establish the
entitlement of such Lender to a continued exemption from or reduction in United
States withholding tax with respect to payments under this Agreement and any
Note, or it shall immediately notify the Borrower and the Administrative Agent
of its inability to deliver any such Form or Certificate, in which case such
Lender shall not be required to deliver any such Form or Certificate pursuant to
this Section 2.06(b). Notwithstanding anything to the contrary contained in
Section 2.06(a), but subject to Section 11.04(b) and the immediately succeeding
sentence, (x) the Borrower shall be entitled, to the extent it is required to do
so by law, to deduct or withhold income or similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any
Lender which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes to the extent that
such Lender has not provided to the Borrower U.S. Internal Revenue Service Forms
that establish a complete exemption from such deduction or withholding and (y)
the Borrower shall not be obligated pursuant to Section 2.06(a) hereof to gross
up payments to be made to a Lender in respect of income withholding or similar
taxes imposed by the United States if (I) such Lender has not provided to the
Borrower the Internal Revenue Service Forms required to be provided to the
Borrower pursuant to this Section 2.06(b) or (II) in the case of a payment,
other than interest, to a Lender described in clause (ii) above, to the extent
that such Forms do not establish a complete exemption from withholding of such
taxes. Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section 2.06 and except as set forth in Sec-
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tion 11.04(b), the Borrower agrees to pay additional amounts and to indemnify
each Lender and the Administrative Agent in the manner set forth in Section
2.06(a) (without regard to the identity of the jurisdiction requiring the
deduction or withholding) in respect of any amounts deducted or withheld by it
as described in the immediately preceding sentence as a result of any changes
after the Closing Date in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof, relating to
the deducting or withholding of income or similar Taxes.
3. CONDITIONS PRECEDENT TO THE BORROWING DATE.
The obligation of each Lender to make Loans on the Borrowing Date is
subject at the time of the making of such Loans to the satisfaction of the
following conditions:
3.01. Execution of Agreement; Notes. (i) On or prior to the
Borrowing Date, the Borrower shall have delivered to the Administrative Agent
executed copies of this Agreement and (ii) on or prior to the Borrowing Date,
there shall have been delivered to the Administrative Agent for the account of
each of the Lenders that have requested a Note or Notes the appropriate Note
executed by the Borrower and the Guarantors in the amount, maturity and as
otherwise provided herein.
3.02. No Default; Representations and Warranties. On the Borrowing
Date and also after giving effect to the Loans made on the Borrowing Date, (i)
there shall exist no Default or Event of Default and (ii) all representations
and warranties contained herein and in the other Documents in effect at such
time shall be true and correct in all material respects with the same effect as
though such representations and warranties had been made on and as of the
Borrowing Date, unless stated to relate to a specific earlier date, in which
case such representations and warranties shall be true and correct in all
material respects as of such earlier date.
3.03. Officers' Certificate. On the Borrowing Date, the
Administrative Agent shall have received a certificate dated such date signed by
an appropriate officer of each of the Parent, the Borrower and Essex, stating
that all of the applicable conditions set forth in Sections 3.02, 3.06 (deleting
the reference to the Administrative Agent and the Lenders therein), 3.07
(deleting the reference to the Lenders therein), 3.08, 3.09 (deleting the
reference to the Administrative Agent therein), 3.10(a) and (b) (deleting the
reference to the Administrative Agent therein) and 3.13, as such provisions
relate to such Credit Party, exist as of such date.
3.04. Opinions of Counsel. On the Borrowing Date, the Administrative
Agent shall have received an opinion, addressed to the Administrative Agent and
each of the Lenders and dated the Borrowing Date, from Proskauer Rose LLP,
counsel to the Borrower, in the form of Exhibit C.
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3.05. Corporate Proceedings. (a) On the Borrowing Date, the
Administrative Agent shall have received from each Credit Party a certificate,
dated the Borrowing Date, signed by the chairman, a vice chairman, the president
or any vice-president of such Credit Party, and attested to by the secretary or
any assistant secretary of such Credit Party, in the form of Exhibit D with
appropriate insertions, together with copies of the Certificate of Incorporation
and By-Laws of such Credit Party and the resolutions of such Credit Party
referred to in such certificate and all of the foregoing (including each such
Certificate of Incorporation and By-Laws) shall be reasonably satisfactory to
the Administrative Agent.
(b) On the Borrowing Date, all corporate and legal proceedings and
all instruments and agreements in connection with the transactions contemplated
by the Credit Documents shall be reasonably satisfactory in form and substance
to the Administrative Agent, and the Administrative Agent shall have received
all information and copies of all certificates, documents and papers, including
good standing certificates, bring-down certificates and any other records of
corporate proceedings and governmental approvals, if any, which the
Administrative Agent reasonably may have requested in connection therewith, such
documents and papers, where appropriate, to be certified by proper corporate or
governmental authorities.
3.06. Adverse Change, etc. On the Borrowing Date and after giving
effect to the Loans made on the Borrowing Date and any loans made under the
Senior Secured Credit Agreement on the Borrowing Date, nothing shall have
occurred since June 30, 1998, in the case of Essex, or July 31, 1998, in the
case of the Parent or the Borrower (and neither the Lenders nor the
Administrative Agent shall have become aware of any facts or conditions not
previously known), which has, or could reasonably be expected to have, a
Material Adverse Effect.
3.07. Litigation. On the Borrowing Date and after giving effect to
the Loans made on the Borrowing Date and any loans made under the Senior Secured
Credit Agreement on the Borrowing Date, there shall be no actions, suits or
proceedings pending or threatened (a) with respect to this Agreement or any
other Document or the Transaction or (b) which the Lenders shall have determined
could reasonably be expected to have a Material Adverse Effect.
3.08. Approvals. (a) On or prior to the Borrowing Date, all
necessary governmental (domestic and non-U.S.) and third party approvals in
connection with the Transaction, the transactions contemplated by the Credit
Documents and otherwise referred to herein or therein shall have been obtained
and remain in effect, and all applicable waiting periods shall have expired
without any action being taken by any competent authority which restrains,
prevents or imposes materially adverse conditions upon the consummation of the
Transaction, the transactions contemplated by the Documents and otherwise
referred to herein or therein. Additionally, there shall not exist any judgment,
order, injunction or
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other restraint issued or filed or a hearing seeking injunctive relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon the consummation of the Transaction or the making of the Loans.
(b) On or prior to the Borrowing Date, all necessary approvals in
connection with the continuation of the Essex Funding Agreement, the Essex
Capital Lease Facility and the Essex Canadian Facility beyond the Borrowing Date
as they are in effect as of the date hereof shall have been obtained and remain
in place and evidence thereof (in form and substance reasonably satisfactory to
the Administrative Agent) shall have been delivered to the Administrative Agent.
3.09. Consummation of the Transaction. On the Borrowing Date, the
following shall be true: (i) the Merger Agreement shall be in full force and
effect, without any waiver or amendment of any term or other condition thereof;
(ii) the Tender Offer shall have been consummated in accordance with applicable
law and in accordance with the Acquisition Documents, without any waiver or
amendment of any term or other condition thereof; (iii) the recommendation of
the Board of Directors of the Parent with respect to the Transaction shall not
have been modified in any material respect or withdrawn; (iv) the Minimum
Condition shall have been satisfied and Acquisition Co shall have accepted for
payment up to the Maximum Number of shares under the Tender Offer and, as a
result thereof, the Parent shall be able to effect the Merger without the
affirmative vote of any other Person; (v) no Change of Control shall have
occurred; (vi) all necessary material governmental and third party approvals in
connection with the Transaction shall have been obtained and remain in effect,
and all applicable waiting periods shall have expired (including, without
limitation, those prescribed by the Hart-Scott-Rodino Antitrust Improvements Act
of 1976), in each case, without any action being taken by any authority which
restrains, prevents or imposes materially adverse conditions upon the
consummation of the transactions contemplated by the Loans (or which may have
any such effect); (vii) the Parent, the Borrower, Essex and their respective
Subsidiaries shall have no Indebtedness outstanding except as permitted by
Section 6.01(i)-(xvii), inclusive; (viii) there shall not have occurred after
October 21, 1998 any material adverse change to the syndication market for
credit facilities similar in nature to the Loans and there shall not have
occurred after October 21, 1998 and be continuing a material disruption of or
material adverse change in financial, banking or capital markets that would have
a material adverse effect on the syndication of the Loans, in each case as
determined by the Administrative Agent in its reasonable discretion; and (ix)
not less than a majority of the board of directors of Essex International shall
be comprised of the Parent's designees and all actions (including any amendment
of the bylaws of Essex International) necessary to cause the foregoing shall
have been taken.
3.10. Essex Credit Agreement. (a) On the Borrowing Date, the
commitments under the Essex Credit Agreement shall have been terminated, all
loans thereunder
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shall have been repaid in full, together with all accrued and unpaid interest
thereon, all accrued and unpaid fees thereon shall have been repaid in full and
all other amounts then owing pursuant to the Essex Credit Agreement shall have
been repaid in full.
(b) On the Borrowing Date, all security interests and Liens created
under the Essex Credit Agreement and the related security documents on the
capital stock of, and assets (including intercompany notes) owned by, Essex and
its Subsidiaries shall have been terminated and released, and the Administrative
Agent shall have received all such releases as may have been requested by the
Administrative Agent, which releases shall be in the form and substance
reasonably satisfactory to the Administrative Agent.
(c) The Administrative Agent shall have received evidence from the
lenders under the Essex Credit Agreement in form, scope and substance reasonably
satisfactory to it that the matters set forth in Section 3.10(a) and (b) have
been satisfied at such time.
3.11. Payment of Fees. On or before the Borrowing Date, all costs,
fees and expenses, and all other compensation contemplated by this Agreement or
any other agreement with the Administrative Agent or any Lender due to the
Administrative Agent or the Lenders (including, without limitation, reasonable
legal fees and expenses), shall have been paid to the extent then due.
3.12. Solvency Certificate; Evidence of Insurance. On the Borrowing
Date, the Agent shall have received:
(a) one or more solvency certificates in the form of Exhibit E from
the chief financial officer of the Borrower and of each Guarantor and
dated the Borrowing Date, in each case, addressed to the Administrative
Agent and each Lender, and reciting that, both prior to and after giving
effect to the Transaction and the incurrence of all financings
contemplated herein and in the Senior Secured Credit Agreement, the
Parent, the Borrower, Essex and each of their respective Subsidiaries (on
a stand-alone basis) are not and will not be rendered insolvent or
inadequately capitalized for the respective businesses they intend to
conduct and have not and will not have incurred debts beyond their ability
to pay as they mature and that, upon consummation of the Transaction, the
total assets of the Borrower exceed the amount necessary to pay all of its
liabilities and that neither the Parent, the Borrower, Essex nor any of
their respective Subsidiaries is entering into the Transaction with the
intent to hinder, delay or defraud any creditor of the Parent, the
Borrower, Essex or any of their respective Subsidiaries; and
(b) evidence of insurance complying with the requirements of Section
5.03 for the business and properties of the Parent, the Borrower, Essex
and
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their respective Subsidiaries, in scope, form and substance reasonably
satisfactory to the Administrative Agent.
3.13. Margin Regulations. On the Borrowing Date and after giving
effect to the making of the Loans hereunder and Section 11.18, neither the
making of any Loan, nor the use of the proceeds thereof, shall have violated the
provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System.
3.14. Senior Secured Credit Agreement. (a) On or prior to the
Borrowing Date, the Borrower shall have entered into definitive documentation
with respect to the Senior Secured Credit Agreement with a syndicate of lenders
in an amount that is, together with the proceeds of the incurrence of Loans,
sufficient to consummate the Transaction and to pay all related fees and
expenses, as contemplated herein. No default or event of default shall have
occurred under the Senior Secured Credit Agreement and all material conditions
to borrowings thereunder shall have been satisfied without waiver. The loans to
be made under the Senior Secured Credit Agreement on the Borrowing Date shall be
made no later than simultaneously with the making of the Loans hereunder.
(b) On or prior to the Borrowing Date, there shall have been
delivered to the Agent true and correct copies of the Senior Secured Credit
Documents and all of the terms and conditions of the Senior Secured Credit
Documents shall be reasonably satisfactory in form and substance to the Agent
and the Required Lenders.
3.15. Representations and Warranties in Senior Secured Credit
Agreement. On the Borrowing Date, all representations and warranties in the
Senior Secured Credit Agreement shall be true and correct in all material
respects.
The acceptance of the benefits of the Loans shall constitute a
representation and warranty by each Credit Party to the Agent and each of the
Lenders that all of the applicable conditions specified above exist as of the
date of such Loans. All of the certificates, legal opinions and other documents
and papers referred to in this Section 3, unless otherwise specified, shall be
delivered to the Agent at its Notice Office for the account of each of the
Lenders and, except for the Notes, in sufficient counterparts for each of the
Lenders and shall be reasonably satisfactory in form and substance to the Agent
and the Required Lenders.
3.16. Creation of the Borrower. The Borrower shall have been duly
organized under the laws of the State of Delaware and the Parent shall have
transferred all of its assets to the Borrower (other than the Capital Stock of
DNE Systems and insignificant assets).
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4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
In order to induce the Lenders to enter into this Agreement and to
make the Loans provided for herein, the Parent and the Borrower makes the
following representations, warranties and agreements with the Lenders (in each
case both before and after giving pro forma effect to the Transaction and (other
than with respect to scheduling consents required or necessary) the receipt of
all required or necessary consents to the extent that they have been received
and are effective on and after the Borrowing Date), all of which shall survive
the execution and delivery of this Agreement and the making of the Loans (with
the occurrence of the Borrowing Date being deemed to constitute a representation
and warranty that the matters specified in this Section 4 are true and correct
in all material respects on and as of the Borrowing Date, unless stated to
relate to a specific earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of such earlier
date):
4.01. Corporate Status. The Parent, the Borrower, Essex and each of
their respective Subsidiaries (i) is a duly organized and validly existing
corporation in good standing under the laws of the jurisdiction of its
organization, (ii) has the requisite corporate power and authority to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage and (iii) is duly qualified and is authorized to do
business and is in good standing in all jurisdictions where it is required to be
so qualified and where the failure to be so qualified would have a Material
Adverse Effect.
4.02. Corporate Power and Authority. Each Credit Party has the
requisite corporate power and authority to execute, deliver and carry out the
terms and provisions of the Documents to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Documents to which it is a party. Each Credit Party has duly executed and
delivered each Document to which it is a party and each such Document
constitutes the legal, valid and binding obligation of such Credit Party
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting creditors' rights
and by equitable principles (regardless of whether enforcement is sought in
equity or at law).
4.03. No Violation. Neither the execution, delivery or performance
by any Credit Party of the Documents to which it is a party nor compliance by
any Credit Party with the terms and provisions thereof, nor the consummation of
the transactions contemplated herein or therein, including, without limitation,
the making of any Loan or the use of the proceeds thereof, (i) after giving
effect to Section 11.18, will contravene any applicable provision of any law,
statute, rule or regulation, or any order, writ, injunction or decree of any
court or governmental instrumentality, including, without limitation, the
provisions of
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Regulation T, U or X of the Board of Governors of the Federal Reserve System,
(ii) will conflict or be inconsistent with, or result in any breach of, any of
the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of the property or assets of the Parent, the
Borrower, Essex or any of their respective Subsidiaries pursuant to the terms
of, any indenture, mortgage, deed of trust, loan agreement, credit agreement or
any other material agreement or instrument to which the Parent, the Borrower,
Essex or any of their respective Subsidiaries is a party or by which it or any
of its property or assets are bound or to which it may be subject or (iii) will
violate any provision of the Certificate of Incorporation or By-Laws of the
Parent, the Borrower, Essex or any of their respective Subsidiaries.
4.04. Use of Proceeds. The proceeds of the Loans (together with the
proceeds of the loans under the Senior Secured Credit Agreement to be made on
the Borrowing Date) shall be utilized as follows: on the Borrowing Date, all
proceeds of the Loans shall be used to (i) consummate the Tender Offer
(including payments in respect of stock options and settlement of certain
employee rights with respect to a change of control of Essex International) and
pay fees and expenses in connection therewith, (ii) refinance the Existing
Superior Credit Agreement and (iii) refinance up to $280.0 million of
Indebtedness of Essex incurred under the Essex Credit Agreement.
4.05. Governmental Approvals. All applicable waiting periods
(including, without limitation, those prescribed by the Hart-Scott-Rodino
Antitrust Improvements Act of 1976) shall have expired and except for filings
with applicable governmental authorities contemplated by the Senior Secured
Credit Documents, all of which shall be made in accordance with such Senior
Secured Credit Documents, no order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption by, any
non-U.S. or domestic governmental or public body or authority, or any
subdivision thereof, is required to authorize or is required in connection with
(i) the execution, delivery and performance of any Document or (ii) the
legality, validity, binding effect or enforceability of any Document.
4.06. Investment Company Act; Public Utility Holding Company Act.
Neither the Parent, the Borrower, Essex nor any of their respective Subsidiaries
is (a) an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended,
or (b) a "holding company," or a "subsidiary company" of a "holding company," or
an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
4.07. True and Complete Disclosure. All factual information (taken
as a whole) (which term shall not include, for purposes of this Section 4.07,
the Projections or
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pro forma information delivered in connection herewith) heretofore or
contemporaneously furnished by or on behalf of the Parent, the Borrower or Essex
or any of their respective Subsidiaries in writing to the Administrative Agent
or any Lender (including, without limitation, all information contained in the
Documents) for purposes of or in connection with the Documents or any
transaction contemplated therein is, and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of any such Person in
writing to the Administrative Agent or any Lender will be, true and accurate in
all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any material fact necessary to
make such information (taken as a whole) not misleading at such time.
4.08. Financial Condition; Financial Statements. (a) On and as of
the Borrowing Date, on a pro forma basis after giving effect to the Transaction
and to all Indebtedness incurred, and to be incurred, and Liens created, and to
be created, by each Credit Party in connection therewith, (x) the sum of the
assets, at a fair valuation (i.e., the amount that may be realized within a
reasonable time, considered to be six months to one year, either through
collection or sale at the regular market value, conceiving the latter as the
amount that would be obtained for such assets within such period by a capable
and diligent businessperson from an interested buyer who is willing to purchase
under ordinary selling conditions), of the Parent, the Borrower, Essex and their
respective Subsidiaries (on a consolidated basis) will exceed their debts, (y)
each Credit Party has not incurred or intended to, nor believes that it will,
incur debts beyond its ability to pay such debts as such debts mature and (z)
each Credit Party will have sufficient capital with which to conduct its
business. For purposes of this Section 4.08, "debt" means any liability on a
claim, and "claim" means (i) right to payment whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (ii)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured; provided that to the extent any such "claim" is not fixed, the
amount thereof shall equal the Parent's, the Borrower's or Essex's good faith
estimate of the maximum amount thereof.
(b) The annual and interim financial statements previously provided
to the Administrative Agent (as to the Parent and Essex International and as to
their Subsidiaries on a combined basis) (including statements of income and cash
flows and changes in shareholders' equity) present fairly in all material
respects the financial condition of the relevant Persons at the dates of said
statements and the results for the periods covered thereby. All such financial
statements have been prepared in accordance with GAAP consistently applied
(other than, in the case of such interim financial statements, the absence of
footnotes and normal year-end adjustments) and the financial statements as of
and for the
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fiscal years have been audited by and accompanied by the opinion of Arthur
Andersen LLP, independent public accountants of the Parent, and Ernst & Young,
LLP, independent public accountants of Essex International.
(c) Since June 30, 1998, in the case of Essex, and since July 31,
1998, in the case of the Parent or the Borrower, nothing has occurred that has
had or could reasonably be expected to have a Material Adverse Effect.
(d) Except as fully reflected in the financial statements described
in Section 4.08(b), the Indebtedness incurred under this Agreement and the
Senior Secured Credit Agreement and liabilities and obligations arising under
the Merger Agreement and except as set forth in Schedule VI hereto, (i) there
were as of the Borrowing Date (and after giving effect to any Loans made on such
date and any loans made under the Senior Secured Credit Agreement on such date),
no liabilities or obligations (excluding obligations or liabilities incurred in
the ordinary course of business which, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect) with respect to
the Parent, the Borrower, Essex or any of their respective Subsidiaries of any
nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether or not due), and (ii) neither the Parent, the Borrower, Essex nor any of
their respective Subsidiaries knows of any basis for the assertion against the
Parent, the Borrower, Essex or any of their respective Subsidiaries of any such
liability or obligation which, either individually or in the aggregate, has, or
could be reasonably likely to have, a Material Adverse Effect.
(e) The pro forma information contained in the Projections is based
on good faith estimates and assumptions made by the management of the Parent,
the Borrower and Essex, and on the Borrowing Date the management believes that
the Projections and such pro forma information were reasonable and, in the case
of the Projections, attainable under the facts and circumstances known to such
management, it being recognized by the Lenders, however, that projections as to
future events are not to be viewed as facts and that the actual results during
the period or periods covered by the Projections may differ from the projected
results and that the differences could be material. There is no fact known to
the Parent, the Borrower, Essex or any of their respective Subsidiaries which
would have a Material Adverse Effect which has not been disclosed herein or in
such other documents, certificates and statements furnished to the Lenders for
use in connection with the transactions contemplated hereby.
4.09. Transaction. At the time of consummation of the appropriate
portion of the Transaction, all consents and approvals of, and filings and
registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required to make or consummate such
portion of the Transaction shall have been obtained, given, filed or taken or
waived and are or will be in full force and effect (or effective judicial relief
with respect thereto has been obtained) except where the failure to obtain,
give,
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file or take would not reasonably be expected to have a Material Adverse Affect.
All applicable waiting periods with respect thereto have or, prior to the time
when required, will have expired without, in all such cases, any action being
taken by any competent authority which restrains, prevents or imposes material
adverse conditions upon the Transaction. Additionally, there does not exist any
judgment, order or injunction prohibiting or imposing material adverse
conditions upon the Transaction or the occurrence of the making of the Loans or
the performance by the Borrower and its Subsidiaries and the Parent of their
obligations under the Documents and all applicable laws. The Transaction has
been consummated in accordance with the respective Documents and all applicable
laws.
4.10. Compliance with ERISA. (a) The Parent, the Borrower, Essex,
their respective Subsidiaries and their respective ERISA Affiliates are in
compliance with all applicable provisions of ERISA and the Code and the
published regulations and interpretations thereunder with respect to all
employee benefit plans (as defined in Section 3(3) of ERISA); no Reportable
Event has occurred with respect to a Plan; no Plan is insolvent or in
reorganization in excess of $3.0 million; the aggregate Unfunded Current
Liability of all Plans (excluding Plans without Unfunded Current Liabilities)
does not exceed $3,000,000; no Plan has an accumulated or waived funding
deficiency, has permitted decreases in its funding standard account or has
applied for a waiver of the minimum funding standard or an extension of any
amortization period within the meaning of Section 412 of the Code; all
contributions required to be made with respect to a Plan and a Non-U.S. Pension
Plan have been timely made; neither the Parent, the Borrower, Essex, any
Subsidiary of the Parent, the Borrower or Essex nor any ERISA Affiliate has
incurred any liability to or on account of a Plan pursuant to Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971, 4975 or 4980 of the Code or reasonably expects to
incur any liability (including any indirect, contingent or secondary liability)
under any of the foregoing Sections with respect to any Plan (other than
liabilities of any ERISA Affiliate which could not, by operation of law or
otherwise, become a liability of the Borrower or any of its Subsidiaries); no
proceedings have been instituted to terminate, or to appoint a trustee to
administer, any Plan; no condition exists which presents a material risk to the
Parent, the Borrower, Essex or any Subsidiary of the Parent, the Borrower or
Essex or any ERISA Affiliate of incurring a liability to or on account of a Plan
pursuant to the foregoing provisions of ERISA and the Code; using actuarial
assumptions and computation methods consistent with subpart 1 of subtitle E of
Title IV of ERISA, the aggregate liabilities of the Parent, the Borrower, Essex
and their respective Subsidiaries and their respective ERISA Affiliates to all
Multiemployer Plans in the event of a complete withdrawal therefrom, as of the
close of the most recent fiscal year of each such Plan ended prior to the
Borrowing Date, would not, singly or in the aggregate, result in a Material
Adverse Effect; no lien imposed under the Code or ERISA on the assets of the
Parent, the Borrower, Essex or any Subsidiary of the Parent, the Borrower or
Essex or any ERISA Affiliate exists or is reasonably likely to arise on account
of any Plan; and the Parent, the Borrower, Essex and
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their respective Subsidiaries do not maintain or contribute to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) which provides
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or any employee pension benefit plan (as defined in
Section 3(2) of ERISA) the obligations with respect to which could reasonably be
expected, singly or in the aggregate, to have a Material Adverse Effect.
(b) Each Non-U.S. Pension Plan has been maintained in compliance
with its terms and with the requirements of any and all applicable laws,
statutes, rules, regulations and orders and has been maintained, where required,
in good standing with applicable regulatory authorities. Neither the Parent, the
Borrower, Essex nor any of their respective Subsidiaries has incurred any
obligation in connection with the termination of or withdrawal from any Non-U.S.
Pension Plan. The present value of the accrued benefit liabilities (whether or
not vested) under each Non-U.S. Pension Plan which is funded, determined as of
the end of the most recently ended fiscal year of the Parent, the Borrower or
Essex on the basis of actuarial assumptions, each of which is reasonable, did
not exceed the current value of the assets of such Non-U.S. Pension Plan, and
for each Non-U.S. Pension Plan which is not funded, the obligations of such
Non-U.S. Pension Plan are properly accrued.
(c) Notwithstanding the foregoing, the representations, warranties
and agreements contained in this Section 4.10 are qualified such that a breach
or failure thereof shall not be treated as such unless the circumstances of such
breach or failure have resulted in or are reasonably expected to result in
either (i) a Material Adverse Effect or (ii) the imposition of a lien on the
assets of the Parent, the Borrower, Essex or any of their respective
Subsidiaries.
4.11. Subsidiaries. On and as of the Borrowing Date and after giving
effect to the consummation of the Transaction, (i) the Borrower has no
Subsidiaries other than those Subsidiaries listed on Schedule IV, and (ii) the
Parent does not have any direct equity interest in any Person other than the
Borrower, DNE Systems and Superior Trust I. Schedule IV correctly sets forth, as
of the Borrowing Date and after giving effect to the Transaction, the percentage
ownership (direct and indirect) of the Borrower in each class of capital stock
of each of its Subsidiaries (including Essex and its Subsidiaries) and also
identifies the direct owner thereof. Prior to the Borrowing Date, the Parent
owned no significant assets other than the Capital Stock of Acquisition Co.,
Superior Telecommunications and DNE Systems, and as of the Borrowing Date, the
Parent owns no significant assets other than all of the outstanding Capital
Stock of the Borrower, DNE Systems and Superior Trust I (other than, in the case
of Superior Trust I, the Trust Preferred Securities).
4.12. Intellectual Property. The Parent, the Borrower, Essex and
each of their respective Subsidiaries owns or holds a valid license to use all
the material patents, trademarks, permits, service marks, trade names,
technology, know-how and formulas or
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other rights with respect to the foregoing, free from restrictions that are
materially adverse to the use thereof, that are used in the operation of the
business of the Parent, the Borrower, Essex and each of their respective
Subsidiaries as presently conducted.
4.13. Compliance with Statutes, etc. Each of the Parent, the
Borrower, Essex and their respective Subsidiaries is in compliance with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or non-U.S., in respect of the
conduct of its business and the ownership of its property (provided, however,
that this Section 4.13 does not apply to (i) compliance with respect to
Environmental Laws, as to which no representation is made in this Section 4.13,
but which is covered by Section 4.14 hereof, (ii) compliance with respect to
Taxes, as to which no representation is made in this Section 4.13, but which is
covered by Section 4.17 hereof, (iii) compliance with respect to ERISA, as to
which no representation is made in this Section 4.13, but which is covered by
Section 4.10 hereof, and (iv) compliance with respect to labor relations
matters, as to which no representation is made in this Section 4.13, but which
is covered by Section 4.16), except such noncompliance as is not likely to,
individually or in the aggregate, have a Material Adverse Effect.
4.14. Environmental Matters. Except as set forth in Schedule VII or
as could not reasonably be expected to have a Material Adverse Effect: (a) Each
of the Parent, the Borrower, Essex and their respective Subsidiaries, and their
respective businesses and Real Property, has complied with, and on the Borrowing
Date is in compliance with, all applicable Environmental Laws and the
requirements of any permits, licenses or other authorizations issued under such
Environmental Laws. There are no pending or past or, to the best knowledge of
the Parent, the Borrower, Essex and their respective Subsidiaries, threatened
Environmental Claims against the Parent, the Borrower, Essex or any of their
respective Subsidiaries or any Real Property currently or formerly owned or
operated by the Parent, the Borrower, Essex or any of their respective
Subsidiaries. There are no facts, circumstances, conditions or occurrences on
any Real Property currently or formerly owned or operated by the Parent, the
Borrower, Essex or any of their respective Subsidiaries or, to the best
knowledge of the Parent, the Borrower, Essex and their respective Subsidiaries,
on any property adjoining or in the vicinity of any such Real Property that
would reasonably be expected (i) to form the basis of an Environmental Claim
against the Parent, the Borrower, Essex or any of their respective Subsidiaries
or any such Real Property or (ii) to cause any such Real Property to be subject
to any restrictions on the ownership, occupancy, use or transferability of such
Real Property by the Parent, the Borrower, Essex or any of their respective
Subsidiaries under any applicable Environmental Law.
(b) Except as set forth in Schedule VII, Hazardous Materials have
not at any time been generated, used, treated or stored on, or transported to or
from, any Real Property currently or formerly owned or operated by the Parent,
the Borrower, Essex or
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any of their respective Subsidiaries where such generation, use, treatment or
storage has violated or could reasonably be expected to violate any
Environmental Law. Hazardous Materials have not at any time been Released on or
from any Real Property currently or formerly owned or operated by the Parent,
the Borrower, Essex or any of their respective Subsidiaries. There are not now
any underground storage tanks or related piping located on any Real Property
currently owned or operated by the Parent, the Borrower, Essex or any of their
respective Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section 4.14,
the representations and warranties made in this Section 4.14 shall only be
untrue if either the individual or aggregate effect of all conditions, failures,
noncompliances, Environmental Claims, Releases and presence of underground
storage tanks or related piping, in each case of the types described above,
could reasonably be expected to have a Material Adverse Effect.
4.15. Properties. All Real Property owned by the Parent, the
Borrower, Essex or any of their respective Subsidiaries and all material
Leaseholds of the Parent, the Borrower, Essex or any of their respective
Subsidiaries, in each case as of the Borrowing Date and after giving effect to
the Transaction, and the nature of the interest therein, is correctly set forth
in Schedule III. Each of the Parent, the Borrower, Essex and their respective
Subsidiaries has good and marketable title to, or a validly subsisting leasehold
interest in, all material properties owned or leased by it, including all Real
Property reflected in Schedule III or in the financial statements referred to in
Section 4.08(b), free and clear of all Liens, other than Liens which are
permitted by Section 6.05.
4.16. Labor Relations. Neither the Parent, the Borrower, Essex nor
any of their respective Subsidiaries is engaged in any unfair labor practice
that could reasonably be expected to have a Material Adverse Effect. There is
(i) no unfair labor practice complaint pending against the Parent, the Borrower,
Essex or any of their respective Subsidiaries or threatened against any of them
before the National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against the Parent, the Borrower, Essex or any of their respective
Subsidiaries or, to the best knowledge of the Parent, the Borrower, Essex or any
of their respective Subsidiaries, threatened against any of them, (ii) no
strike, labor dispute, slowdown or stoppage pending against the Parent, the
Borrower, Essex or any of their respective Subsidiaries or threatened against
the Parent, the Borrower, Essex or any of their respective Subsidiaries and
(iii) no union representation question existing with respect to the employees of
the Parent, the Borrower, Essex or any of their respective Subsidiaries and no
union organizing activities are taking place, except (with respect to any matter
specified in clause (i), (ii) or (iii) above, either individually or in the
aggregate) such as is not reasonably likely to have a Material Adverse Effect.
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4.17. Tax Returns and Payments. All Federal, material state and
other material returns, statements, forms and reports for taxes (the "Returns")
required to be filed by or with respect to the income, properties or operations
of the Parent, the Borrower, Essex and/or any of their respective Subsidiaries
have been timely filed with the appropriate taxing authority. The Returns
accurately reflect all liability for taxes of the Parent, the Borrower, Essex
and their respective Subsidiaries for the periods covered thereby. The Parent,
the Borrower, Essex and each of their respective Subsidiaries have paid all
taxes payable by them other than immaterial taxes and other taxes which are not
yet due and payable, and other than taxes contested in good faith and for which
adequate reserves have been established in accordance with GAAP. Except as
disclosed in the financial statements referred to in Section 4.08(b) or Schedule
IX, (a) there is no material action, suit, proceeding, investigation, audit or
claim now pending or threatened by any authority regarding any taxes relating to
the Parent, the Borrower, Essex or any of their respective Subsidiaries and (b)
neither the Parent, the Borrower, Essex nor any of their respective Subsidiaries
(nor any other person on their behalf or as part of a consolidated group) has
entered into an agreement or waiver or been requested to enter into an agreement
or waiver extending any statute of limitations relating to the payment or
collection of taxes of the Parent, the Borrower, Essex or any of their
respective Subsidiaries, or is aware of any circumstances that would cause the
taxable years or other taxable periods of the Parent, the Borrower, Essex or any
of their respective Subsidiaries not to be subject to the normally applicable
statute of limitations. Neither the Parent, the Borrower, Essex nor any of their
respective Subsidiaries (nor any other person on their behalf or as part of a
consolidated group) has provided, with respect to themselves or property held by
them, any consent under Section 341 of the Code. Neither the Parent, the
Borrower, Essex nor any of their respective Subsidiaries has incurred, or will
incur, any material tax liability in connection with the Transaction and the
other transactions contemplated hereby.
4.18. Year 2000. All Information Systems and Equipment are either
Year 2000 Compliant, or any reprogramming, remediation or any other corrective
action, including the internal testing of all such Information Systems and
Equipment, will be completed by September 30, 1999. Further, to the extent that
such reprogramming/remediation and testing action is required, the cost thereof,
as well as the cost of the reasonably foreseeable consequences of failure to
become Year 2000 Compliant, to the Parent, the Borrower, Essex and their
respective Subsidiaries (including, without limitation, reprogramming errors and
the failure of other systems or equipment) will not result in a Default or a
Material Adverse Effect.
5. AFFIRMATIVE COVENANTS.
The Borrower and the Parent hereby covenant and agree that on and
after the Closing Date and until the Loans, Notes, together with interest, fees
and all other Obliga-
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tions incurred hereunder and thereunder are paid in full (other than indemnity
and similar obligations that are not then due and payable):
5.01. Information Covenants. The Borrower and the Parent will
furnish to each Lender:
(a) Monthly Reports. Within 30 days after the end of each fiscal
month of the Parent commencing with the fiscal month in which the Borrowing Date
occurs (other than the end of a fiscal quarter or fiscal year), the consolidated
and consolidating balance sheet of the Parent and its Subsidiaries as at the end
of such fiscal month and the related consolidated and consolidating statements
of income and statements of cash flows for such fiscal month and for the elapsed
portion of the fiscal year ended with the last day of such fiscal month, in each
case setting forth comparative figures for the corresponding periods in the
prior fiscal year (sales to be broken down by the sales of the original
equipment manufacturer, communications and electrical business segments) and
comparable budgeted figures for the current fiscal month and year-to-date
results, all of which shall be certified by the chief financial officer or other
Authorized Officer of the Parent, subject to normal year-end audit adjustments
and the absence of footnotes.
(b) Quarterly Financial Statements. Within 45 days after the close
of each of the first three quarterly accounting periods in each fiscal year of
the Parent commencing with the fiscal quarter in which the Borrowing Date
occurs, the consolidated and consolidating balance sheet of the Parent and its
Subsidiaries as at the end of such quarterly accounting period and the related
consolidated and consolidating statements of income, statements of changes in
stockholders equity and statements of cash flows for such quarterly accounting
period and for the elapsed portion of the fiscal year ended with the last day of
such quarterly accounting period, in each case setting forth comparative figures
for the corresponding period in the prior fiscal year (sales to be broken down
by the sales of the original equipment manufacturer, communications and
electrical business segments), and comparative budgeted figures for the current
fiscal quarter and year-to-date results, all of which shall be in reasonable
detail and certified by the chief financial officer or other Authorized Officer
of the Parent that they fairly present in all material respects the financial
condition of the Parent and its Subsidiaries as of the dates indicated and the
results of their operations and changes in their cash flows for the periods
indicated, subject to normal year-end audit adjustments and the absence of
footnotes.
(c) Annual Financial Statements. Within 90 days after the close of
each fiscal year (or if the Parent changes its fiscal year end, the "stub"
period resulting therefrom) of the Parent commencing with the fiscal year in
which the Borrowing Date occurs, the consolidated and consolidating balance
sheet of the Parent and its Subsidiaries as at the end of such fiscal year and
the related consolidated and consolidating statements of income, statements of
changes in stockholders equity and statements of cash flows (sales to be bro-
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ken down by the sales of the original equipment manufacturer, communications and
electrical business segments) for such fiscal year and setting forth comparative
consolidated figures for the preceding fiscal year and comparable budgeted
figures for the current fiscal year and (except for such comparable budgeted
figures and the sales breakdown referred to above) certified (in the case of
consolidated information) by Arthur Andersen LLP or such other independent
certified public accountants of recognized national standing as shall be
reasonably acceptable to the Administrative Agent, in each case to the effect
that such statements fairly present in all material respects the financial
condition of the Parent and its Subsidiaries as of the dates indicated and the
results of their operations and cash flows, together with a certificate of such
accounting firm stating that in the course of its regular audit of the business
of the Parent and its Subsidiaries, which audit was conducted in accordance with
generally accepted auditing standards, no Default or Event of Default which has
occurred and is continuing has come to their attention insofar as such Default
or Event of Default relates to financial and accounting matters or, if such a
Default or an Event of Default has come to their attention a statement as to the
nature thereof.
(d) Budgets, etc. No more than 60 days after the commencement of
each fiscal year of the Parent, budgets of and for the Parent and its
Subsidiaries in reasonable detail for each of the four fiscal quarters of such
fiscal year and an annual budget for the immediately succeeding fiscal year, in
each case as customarily prepared by management for its internal use setting
forth, with appropriate discussion, the principal assumptions upon which such
budgets are based. Together with each delivery of financial statements pursuant
to Section 5.01(b) and (c), a comparison of the current year to date financial
results (other than in respect of the balance sheets included therein) against
the budgets required to be submitted pursuant to this clause (d) shall be
presented.
(e) Officers' Certificates. At the time of the delivery of the
financial statements provided for in Section 5.01(b) and (c), a certificate of
the chief financial officer or other Authorized Officer of the Parent and the
Borrower to the effect that no Default or Event of Default exists or, if any
Default or Event of Default does exist, specifying the nature and extent
thereof, which certificate shall (x) set forth the calculations required to
establish whether the Parent and the Borrower and its Subsidiaries were in
compliance with the provisions of Sections 2.02, 6.01, 6.02 and 6.03, as at the
end of such fiscal quarter or fiscal year, as the case may be.
(f) Notice of Default or Litigation. Promptly, and in any event
within five Business Days (or 10 Business Days in the case of clause (y) below)
after any executive or senior officer of the Parent or the Borrower obtains
actual knowledge thereof, notice of (x) the occurrence of any event which
constitutes a Default or an Event of Default, which notice shall specify the
nature thereof, the period of existence thereof and what action the Parent or
the Borrower proposes to take with respect thereto and (y) the com-
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mencement of, or threat of, any litigation or governmental proceeding pending
against the Parent or the Borrower or any of their respective Subsidiaries which
is reasonably likely to have a Material Adverse Effect, or a material adverse
effect on the ability of any Credit Party to perform its respective obligations
hereunder or under any other Credit Document.
(g) Auditors' Reports. Promptly upon receipt thereof, a copy of each
report or "management letter" submitted to the Parent or any of its Subsidiaries
by its independent accountants in connection with any annual, interim or special
audit made by them of the books of the Parent or any of its Subsidiaries.
(h) Other Information. Promptly upon transmission thereof, copies of
any filings and registrations with, and reports to, the SEC by the Parent or any
of its Subsidiaries and copies of all financial statements, proxy statements,
notices and reports as the Parent or any of its Subsidiaries shall send
generally to analysts or the holders of their capital stock in their capacity as
such holders (to the extent not theretofore delivered to the Lenders pursuant to
this Agreement) and, with reasonable promptness, such other information or
documents (financial or otherwise) as the Administrative Agent on its own behalf
or on behalf of the Required Lenders may reasonably request from time to time.
5.02. Books, Records and Inspections. The Parent will, and will
cause each of its Subsidiaries to, permit, upon notice to the chief financial
officer or other Authorized Officer of the Parent, officers and designated
representatives of the Administrative Agent or the Required Lenders to visit and
inspect any of the properties or assets of the Parent and any of its
Subsidiaries in whosesoever possession, and to examine the books of account of
the Parent and of any of its Subsidiaries and discuss the affairs, finances and
accounts of the Parent and of any of its Subsidiaries with, and be advised as to
the same by, their officers and independent accountants, all at such reasonable
times and intervals and to such reasonable extent as the Administrative Agent or
the Required Lenders may desire.
5.03. Insurance. The Parent will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance with
reputable and solvent insurance carriers in such amount, covering such risks and
liabilities and with such deductibles or self-insured retentions as are in
accordance with normal industry practice.
5.04. Payment of Taxes. The Parent will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which material
penalties attach thereto, and all lawful claims for sums that have become due
and payable which, if unpaid, might become a Lien not otherwise permitted under
Section 6.05 or charge upon any properties of the Parent or any of its
Subsidiaries; provided that neither the Parent nor any of its Subsidiaries shall
be required to pay any such tax, assessment, charge, levy or claim which is
being contested in
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good faith and by proper proceedings if it has maintained adequate reserves with
respect thereto in accordance with GAAP.
5.05. Compliance with Statutes, etc. The Parent will, and will cause
each of its Subsidiaries to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or non-U.S., in respect of the conduct of its business and the
ownership of its property except for such noncompliance as would not, singly or
in the aggregate, have a Material Adverse Effect or a material adverse effect on
the ability of any Credit Party to perform its obligations under any Credit
Document to which it is a party.
5.06. Corporate Franchises. The Parent will, and will cause each of
its Subsidiaries to, do or cause to be done all things necessary to preserve and
keep in full force and effect its existence and its rights, franchises, licenses
and patents, except as could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect; provided, however, that the
Parent and the Borrower shall not be required to preserve, with respect to
themselves, any right or franchise, and with respect to any of their respective
Subsidiaries, any such existence, right or franchise, if the Board of Directors
of the Parent, the Borrower or such Subsidiary, as the case may be, shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Parent and its Subsidiaries taken as a whole or the Borrower
and its Subsidiaries taken as a whole, as applicable. Nothing in this Section
5.06 shall prevent (a) sales of assets and other transactions by the Borrower or
any of its Subsidiaries in accordance with Section 6.03 or (b) the withdrawal by
the Parent, the Borrower or any of their respective Subsidiaries of its
qualification as a foreign corporation in any jurisdiction where such withdrawal
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
5.07. Good Repair. The Parent will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used in its
business are kept in good repair, working order and condition, normal wear and
tear and damage by casualty excepted, and that from time to time there are made
to such properties and equipment all needful and proper repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto, to
the extent and in the manner useful or customary for companies in similar
businesses.
5.08. Year 2000. The Parent and the Borrower will ensure that each
of their Information Systems and Equipment are at all times after September 30,
1999 Year 2000 Compliant, except insofar as the failure to do so will not result
in a Material Adverse Effect, and shall notify the Administrative Agent and any
Lender promptly upon detecting any material failure of the Information Systems
and Equipment to be Year 2000 Compliant. In addition, the Parent and the
Borrower shall provide the Administrative Agent and any Lender with such
information about its year 2000 computer readiness (including, without
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limitation, information as to contingency plans, budgets and testing results) as
the Administrative Agent or such Lender shall reasonably request.
6. NEGATIVE COVENANTS.
The Borrower hereby covenants and agrees that until the satisfaction
in full of the Loans and the Notes and all other Obligations (other than
indemnity and similar obligations that are not then due and payable) due under
this Agreement it will fully and timely perform all covenants in this Section 6:
6.01. Indebtedness. The Borrower will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, incur any
Indebtedness, except for the following ("Permitted Indebtedness"):
(i) Indebtedness under the Loans and the Guarantees pursuant to this
Agreement, and Permitted Refinancings thereof;
(ii) Indebtedness incurred pursuant to the Senior Secured Credit
Agreement in an aggregate principal amount at any time outstanding not to
exceed $1,150 million, (A) less the amount of all mandatory principal
payments actually made in respect of the term loan facilities under the
Senior Secured Credit Agreement (excluding any such repayment to the
extent refinanced and replaced at the time of payment) and (B) reduced by
any required permanent repayments actually made (which are accompanied by
a corresponding permanent commitment reduction in the case of the
revolving credit facility under the Senior Secured Credit Agreement) in
respect of the Senior Secured Credit Agreement (excluding any such
repayments and commitment reductions to the extent refinanced and replaced
at the time of payment) in each case pursuant to this clause (B) actually
effected in satisfaction of the requirement to make a Net Proceeds Offer
pursuant to Section 2.02(a);
(iii) 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 Indebtedness thereunder, does not at any time exceed $225.0
million;
(iv) 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
Borrower or the Lenders than with respect to the Indebtedness being so
refinanced;
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(v) Indebtedness incurred pursuant to the Essex Capital Lease
Facility, provided that the principal amount thereof at any time does not
exceed $18.0 million, 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 Borrower or the Lenders than with respect to the
Indebtedness being so refinanced;
(vi) letters of credit existing as of the date hereof as set forth
on Schedule V, 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 Borrower or the Lenders than with respect to the
Indebtedness being so refinanced;
(vii) (x) Existing Indebtedness outstanding on the Borrowing Date
and listed on Schedule V, and any Permitted Refinancings thereof, and (y)
Permitted Refinancings of Indebtedness permitted to be incurred pursuant
to clause (xvii) of this Section 6.01;
(viii) Indebtedness incurred pursuant to (x) Interest Rate
Protection Agreements entered into to protect the Borrower against
fluctuations in interest rates in respect of any Indebtedness permitted to
be incurred under this Agreement 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 Borrower and its Restricted 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
Borrower and its Restricted Subsidiaries transact business; provided that
such agreements 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;
(ix) Indebtedness represented by (a) Capitalized Lease Obligations
and Purchase Money Indebtedness; provided that 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 shall not exceed $20.0 million, and (b)
Capitalized Lease Obligations referred to on Schedule V;
(x) Indebtedness of a Restricted Subsidiary that is a Guarantor to
the Borrower or to a Restricted Subsidiary that is a Guarantor for so long
as such Indebtedness is held by the Borrower, a Restricted Subsidiary that
is a Guarantor or the lenders or collateral agent under the Senior Secured
Credit Agreement, in each case subject to no Lien held by a Person other
than the Borrower, a Restricted Subsidiary
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that is a Guarantor or the lenders or collateral agent under the Senior
Secured Credit Agreement; provided that if as of any date any Person other
than the Borrower, a Restricted Subsidiary that is a Guarantor or the
lenders or collateral agent under the Senior Secured Credit Agreement owns
or holds any such Indebtedness or holds a Lien in respect of such
Indebtedness, such date shall be deemed the incurrence of Indebtedness not
constituting Permitted Indebtedness by the issuer of such Indebtedness
pursuant to this clause (x);
(xi) Indebtedness of the Borrower to a Restricted Subsidiary that is
a Guarantor for so long as such Indebtedness is held by a Restricted
Subsidiary that is a Guarantor or the lenders or collateral agent under
the Senior Secured Credit Agreement, in each case subject to no Lien other
than in favor of the lenders or collateral agent under the Senior Secured
Credit Agreement; provided that if as of any date any Person other than a
Restricted Subsidiary that is a Guarantor or the lenders or collateral
agent under the Senior Secured Credit Agreement owns or holds any such
Indebtedness or any Person holds a Lien in respect of such Indebtedness,
such date shall be deemed the incurrence of Indebtedness not constituting
Indebtedness permitted by this clause (xi);
(xii) Indebtedness of Foreign Subsidiaries to the Borrower or any of
its Domestic Subsidiaries as a result of any Investment permitted to be
made pursuant to Section 6.02(b);
(xiii) Indebtedness consisting of guarantees (x) by the Borrower of
Indebtedness, leases and other contractual obligations permitted to be
incurred by Restricted Subsidiaries of the Borrower that are Guarantors
and (y) by Foreign Subsidiaries of Indebtedness, leases and other
contractual obligations permitted to be incurred by the Borrower and its
Restricted Subsidiaries;
(xiv) Indebtedness of the Mexican Subsidiaries as contemplated by
and in accordance with the terms of Section 6.02(b)(8) to fund the
development of certain manufacturing facilities in Mexico;
(xv) Indebtedness consisting of a guarantee by the Borrower or any
Guarantor of Indebtedness of the Israeli Subsidiaries to purchase the
Cvalim Assets; provided that (x) the portion of the Indebtedness
guaranteed by the Borrower or any Guarantor shall not exceed $15.0 million
and (y) such guarantee is otherwise permitted to be made pursuant to
Section 6.02(b)(14);
(xvi) additional Indebtedness of the Borrower and its Restricted
Subsidiaries not otherwise permitted hereunder not exceeding $30.0 million
in aggregate principal amount at any time outstanding; provided, however,
that no more than
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$10.0 million of such amount may be secured Indebtedness unless it is
incurred under the Senior Secured Credit Agreement; and
(xvii) so long as no Default shall have occurred and be continuing
at the time of or as a consequence of the incurrence of any such
Indebtedness, the Borrower and any Restricted Subsidiary that is a
Guarantor may incur Indebtedness (including, without limitation, Acquired
Indebtedness) after the end of the first full fiscal quarter ending after
the Borrowing Date if on the date of the incurrence of such Indebtedness,
after giving effect to the incurrence thereof, the Consolidated Fixed
Charge Coverage Ratio of the Borrower is greater than 2.0 to 1.0.
6.02. Restricted Payments. (a) The Borrower will not, and will not
cause or permit any Restricted Subsidiary to, directly or indirectly, (a)
declare or pay any dividend or make any distribution (other than dividends or
distributions payable in Qualified Capital Stock of the Borrower) on or in
respect of shares of the Borrower's Qualified Capital Stock to holders of such
Capital Stock, (b) redeem any Capital Stock of the Borrower or any warrants,
rights or options to purchase or acquire shares of any class of such Capital
Stock or (c) make any Investment (other than Permitted Investments) (each of the
foregoing actions set forth in clauses (a), (b) and (c) being referred to as a
"Restricted Payment"), if at the time of such Restricted Payment or immediately
after giving effect thereto, (i) a Default shall have occurred and be continuing
or (ii) the Borrower is not able to incur at least $1.00 of additional
Indebtedness pursuant to paragraph (xvii) of Section 6.01 or (iii) the aggregate
amount of Restricted Payments (including such proposed Restricted Payment but
excluding Restricted Payments pursuant to clause (2), (5), (6), (7), (8), (9),
(10), (11), (12) or (13) of the next paragraph) made subsequent to the Borrowing
Date shall exceed the sum (the "Basket") of (without duplication): (w) 50% of
the cumulative Consolidated Net Income (or if cumulative Consolidated Net Income
shall be a loss, minus 100% of such loss) of the Borrower earned subsequent to
the end of the first fiscal quarter ended after the Borrowing Date and on or
prior to the date the Restricted Payment occurs (the "Reference Date") (treating
such period as a single accounting period); plus (x) 100% of the aggregate net
cash proceeds received by the Borrower from any Person (other than a Subsidiary
of the Borrower) from the issuance and sale subsequent to the Borrowing Date and
on or prior to the Reference Date of Qualified Capital Stock of the Borrower;
plus (y) without duplication of any amounts included in clause (iii)(x) above,
100% of the aggregate net cash proceeds of any equity contribution (other than
from a Subsidiary of the Borrower) received by the Borrower from a holder of the
Borrower's Capital Stock; plus (z) without duplication of any amounts included
in the calculation of Consolidated Net Income, the sum of (1) to the extent any
Investment (other than a Permitted Investment) that was made after the Borrowing
Date is sold for cash or otherwise liquidated or repaid for cash, the lesser of
(A) the cash received with respect to such sale, liquidation or repayment of
such Investment (less the cost of any such sale, liquidation or repayment, if
any) and (B) the initial amount of
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such Investment included as a Restricted Payment and (2) upon redesignation of
an Unrestricted Subsidiary as a Restricted Subsidiary (other than a Subsidiary
that is an Unrestricted Subsidiary on the Borrowing Date), the lesser of (A) the
fair market value of the net assets of such Subsidiary upon its redesignation as
a Restricted Subsidiary and (B) the Investment made in such Subsidiary that is
treated as a Restricted Payment.
(b) Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of such dividend if the dividend would have been permitted on
the date of declaration;
(2) the acquisition of any shares of Capital Stock of the Borrower,
either (i) solely in exchange for shares of Qualified Capital Stock of the
Borrower or (ii) through the application of net proceeds of a
substantially concurrent sale for cash (other than to a Subsidiary of the
Borrower) of shares of Qualified Capital Stock of the Borrower; provided,
however, that no transaction pursuant to this clause (2) shall increase
the Basket;
(3) the repurchase of shares of Superior Preferred Stock, provided
that the only consideration to be paid in connection therewith shall be
shares of (x) Parent Common Stock and/or (y) preferred stock of the Parent
having terms identical, in all material respects, to the Superior
Preferred Stock (including as to dividend rate and liquidation
preferences) except that the issuer thereof shall be the Parent;
(4) so long as no Default or Event of Default shall have occurred
and be continuing or would result therefrom, dividends paid by the
Borrower 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 Parent Common Stock; provided, however, that the Borrower is
permitted to pay such dividend to the Parent under the Senior Secured
Credit Agreement (as in effect on the Borrowing Date);
(5) Investments in Foreign Subsidiaries by other Foreign
Subsidiaries (other than the Israeli Subsidiaries);
(6) Investments by the Borrower or any Restricted Subsidiary that is
a Guarantor constituting an intercompany loan by the Borrower or such
Restricted Subsidiary that is a Guarantor to the Israeli Subsidiaries to
purchase the Cvalim Assets in principal amount outstanding not to exceed
$90.0 million at any time; provided that (i) such intercompany loan is
secured, on terms acceptable to the Administrative Agent, with
substantially all of the assets of the Israeli Subsidiaries
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(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 $90.0 million
amount shall be reduced to the extent that the Borrower or any of the
Guarantors shall have guaranteed Indebtedness of the Israeli Subsidiaries
as permitted by Section 6.01(xv);
(7) Investments by the Borrower or any Restricted Subsidiary that is
a Guarantor constituting vendor financing provided to support the local
operations of the Israeli Subsidiaries in amount not to exceed $60.0
million outstanding at any time;
(8) Investments in the Mexican Subsidiaries to fund their
development of certain manufacturing facilities in Mexico in an aggregate
amount not to exceed $80.0 million; provided that until January 31, 2001,
the amount of such Investments shall not exceed $40.0 million in the
aggregate; and provided, further, that such amount will either be funded
(A) through Indebtedness incurred by the Mexican Subsidiaries or (B)
through intercompany loans made by the Borrower, on terms satisfactory to
the Administrative Agent, provided that (i) such intercompany loans shall
be secured, on terms reasonably acceptable to the Administrative Agent, by
all of the assets of the Mexican Subsidiaries, including those
contemplated to be built or constructed, and (ii) the Mexican Subsidiaries
shall become Guarantors (it being understood that the Guarantee of the
Mexican Subsidiaries shall be subject to release pursuant to Section
12.08) or (C) through the investment of up to $16.0 million of equity or
other similar contributions or (D) through a combination of (A), (B) and
(C);
(9) Investments in Cables of Zion constituting the outstanding
equity interests of Cables of Zion that are not held by the Borrower or
any Subsidiary on the Borrowing Date; provided that the aggregate
consideration therefor does not exceed $25.0 million;
(10) so long as no Default or Event of Default shall have occurred
or be continuing or would result therefrom, dividends paid by the Borrower
to the Parent not earlier than the second Business Day prior to the due
date of any scheduled interest payment on the Debentures 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 Debentures;
(11) dividends paid by the Borrower to the Parent (x) so long as the
proceeds thereof are used at the time of such dividend payment by the
Parent to pay expenses for administrative, legal and accounting services
provided by third parties that are reasonable and customary and incurred
in the ordinary course of business by
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a publicly traded company for such professional services or to pay
franchise and similar costs and (y) in an amount not to exceed the
"additional amount" for any four consecutive fiscal quarters provided that
such amount is used at the time of such dividend payment to pay actual
expenses of the Parent (including employment expenses) and the "additional
amount" is otherwise treated as an operating expense of the Borrower for
purposes of determining compliance with the financial covenants contained
herein; "additional amount" for any such period shall mean an amount not
to exceed the sum of (i) $2.5 million and (ii) that portion of the fee
permitted to be paid by Section 6.08(b)(vi) in such period that is not
actually paid;
(12) dividends paid by the Borrower to the Parent so long as the
proceeds thereof are used at the time of such dividend payment by the
Parent to make the payments permitted to be made by the Borrower pursuant
to and in accordance with Sections 6.08(b)(vi), (vii) and (viii);
(13) the performance by the Borrower and the Restricted Subsidiaries
of their obligations under the Essex Funding Agreement or similar
obligations under a Receivables Financing Agreement; and
(14) so long as no Default shall have occurred or be continuing or
would result therefrom, the Borrower and its Restricted Subsidiaries that
are Guarantors may make new or additional cash Investments (including,
without limitation, the Investments contemplated by Section 6.01(xv)) in
an amount not to exceed $25.0 million 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).
(c) Not later than 50 days after the end of any fiscal quarter (100
days in the case of the last fiscal quarter of the fiscal year) during which any
Restricted Payment in excess of $10.0 million is made, the Borrower shall
deliver to the Administrative Agent an Officers' Certificate stating that all
Restricted Payments made during such fiscal quarter were permitted and setting
forth the basis upon which the calculations required by this covenant were
computed, together with a copy of any opinion or appraisal required by this
Agreement.
6.03. Asset Sales. The Borrower will not, and will not permit any of
its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the Borrower
or the applicable Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets sold or otherwise disposed of (as determined in good faith
by the Borrower's Board of Directors); (ii) at least 80% of the consideration
received by the Borrower or such Restricted Subsidiary, as the case may be, from
such Asset Sale shall be cash or Cash Equivalents and is received at the time of
such
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disposition; provided that the amount of (x) any liabilities (as shown on the
Borrower's or such Restricted Subsidiary's most recent balance sheet or in the
notes thereto) of the Borrower or such Restricted Subsidiary (other than
liabilities that are by their terms subordinated to the Loans) that are assumed
by the transferee of any such assets and from which the Borrower and its
Restricted Subsidiaries are unconditionally released and (y) any notes or other
obligations received by the Borrower or such Restricted Subsidiary from such
transferee that are promptly, but in no event more than 30 days after receipt,
converted by the Borrower or such Restricted Subsidiary into cash or Cash
Equivalents (to the extent of the cash or Cash Equivalents received) shall be
deemed to be cash for purposes of this provision; and (iii) the Borrower shall
apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds in
accordance with Section 2.02(a), provided, however, that if at any time any
non-cash consideration received by the Borrower or any Restricted Subsidiary of
the Borrower, as the case may be, in connection with any Asset Sale is converted
into or sold or otherwise disposed of for cash (other than interest received
with respect to any such non-cash consideration), then such conversion or
disposition shall be deemed to constitute an Asset Sale hereunder and the Net
Cash Proceeds thereof shall be applied in accordance with Section 2.02(a).
Notwithstanding clause (ii) of the immediately preceding paragraph,
the Borrower and its Restricted Subsidiaries will be permitted to consummate an
Asset Sale without complying with clause (ii) of such paragraph to the extent
that at least 80% of the consideration from such Asset Sale constitutes
Replacement Assets and the remainder constitutes cash or Cash Equivalents;
provided that any consideration not constituting Replacement Assets received by
the Borrower or any of its Restricted Subsidiaries in connection with any Asset
Sale permitted to be consummated under this paragraph shall constitute Net Cash
Proceeds subject to the provisions of the immediately preceding paragraph.
6.04. Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries. The Borrower will not, and will not cause or permit any
of its Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or permit to exist or become effective any encumbrance or restriction on
the ability of any Restricted Subsidiary to (a) pay dividends or make any other
distributions on or in respect of its Capital Stock; (b) make loans or advances
or to pay any Indebtedness or other obligation owed to the Borrower or any other
Restricted Subsidiary; or (c) transfer any of its property or assets to the
Borrower or any other Restricted Subsidiary, except for such encumbrances or
restrictions existing under or by reason of: (1) applicable law; (2) this
Agreement; (3) customary non-assignment provisions of any contract or any lease
governing a leasehold interest of any Restricted Subsidiary; (4) any instrument
governing Acquired Indebtedness, which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person or the properties or assets of the Person so acquired as such
instrument is in effect on the date of the acquisition; (5) the Senior Secured
Credit Docu-
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ments; (6) agreements existing on the Borrowing Date to the extent and in the
manner such agreements are in effect on the Borrowing Date; (7) restrictions on
the transfer of assets subject to any Lien permitted under this Agreement
imposed by the holder of such Lien; (8) restrictions imposed by any agreement to
sell assets permitted under this Agreement to any Person pending the closing of
such sale; (9) an agreement or instrument governing Indebtedness incurred to
refinance the Indebtedness incurred pursuant to an agreement referred to in
clause (2), (4), (5) or (6) above; provided, however, that the provisions
relating to such encumbrance or restriction contained in any such refinancing
Indebtedness are not materially more restrictive, taken as a whole, than the
provisions relating to such encumbrance or restriction contained in agreements
referred to in such clause (2), (4), (5) or (6); (10) customary provisions
restricting assignment of any licensing agreement entered into by the Borrower
or a Restricted Subsidiary of the Borrower in the ordinary course of business;
(11) any agreement or instrument governing Capital Stock of any Person that is
assumed in connection with the acquisition thereof and not entered into in
contemplation of such acquisition; and (12) other Indebtedness permitted to be
incurred subsequent to the Borrowing Date pursuant to the provisions of Section
6.01; provided that (x) any such restrictions are ordinary and customary with
respect to the type of Indebtedness being incurred (under the relevant
circumstances) and (y) in no event shall such restrictions be more restrictive
in any respect than those contained in the Senior Secured Credit Agreement as in
effect on the Borrowing Date.
6.05. Liens. The Borrower shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, create, incur, assume or
suffer to exist any Lien (other than Permitted Liens) that secures any (i) trade
payables or (ii) Indebtedness of the Borrower or any Guarantor which is
expressly by its terms subordinated in right of payment to any other
Indebtedness of the Borrower or such Guarantor, unless in the case of clause
(ii) the Loans or the Guarantee of such Guarantor, as the case may be, are
secured by a Lien on such asset or property that is (x) pari passu with such
other Indebtedness if such other Indebtedness is pari passu with the Loans or
the Guarantee of such Guarantor, as the case may be, or (y) if such other
indebtedness is subordinated to the Loans or the Guarantee of such Guarantor, as
the case may be, senior in priority to the Lien securing such other
Indebtedness, in each case, until such time as such obligations are no longer
secured by a Lien.
6.06. Senior Subordinated Debt. Neither the Borrower nor any
Guarantor will incur or suffer to exist Indebtedness that is senior in right of
payment to the Loans or the Guarantee of such Guarantor, as applicable, and
expressly subordinate in right of payment to any other Indebtedness of the
Borrower or such Guarantor, as applicable.
6.07. Merger, Consolidation and Sale of Assets. (a) The Borrower
will not, in a single transaction or series of related transactions, consolidate
or merge with or
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into any Person, or sell, assign, transfer, lease, convey or otherwise dispose
of (or cause or permit any Restricted Subsidiary to sell, assign, transfer,
lease, convey or otherwise dispose of) all or substantially all of the
Borrower's assets (determined on a consolidated basis for the Borrower and the
Borrower's Restricted Subsidiaries) whether as an entirety or substantially as
an entirety to any Person unless: (i) either (1) the Borrower shall be the
surviving or continuing corporation or (2) the Person (if other than the
Borrower) formed by such consolidation or into which the Borrower is merged or
the Person which acquires by sale, assignment, transfer, lease, conveyance or
other disposition the properties and assets of the Borrower and of the
Borrower's Restricted Subsidiaries substantially as an entirety (the "Surviving
Entity") (x) shall be a corporation organized and validly existing under the
laws of the United States or any State thereof or the District of Columbia and
(y) shall expressly assume, by an amended subordinated credit agreement (in form
and substance reasonably satisfactory to the Administrative Agent), executed and
delivered to the Administrative Agent, the due and punctual payment of the
principal of, and premium, if any, and interest on all of the Loans and any
other Obligations hereunder and the performance of every covenant in this
Agreement on the part of the Borrower to be performed or observed; (ii)
immediately before and immediately after giving effect to such transaction and
the assumption contemplated by clause (i)(2)(y) above (including, without
limitation, giving effect to any Indebtedness incurred or anticipated to be
incurred and any Lien granted or anticipated to be granted in connection with or
in respect of the transaction), no Default shall have occurred and be
continuing; (iii) immediately before and immediately after giving effect to such
transaction and the assumption contemplated by clause (i)(2)(y) above
(including, without limitation, giving effect to any Indebtedness incurred or
anticipated to be incurred and any Lien granted or anticipated to be granted in
connection with or in respect of the transaction), the Borrower would be able to
incur $1.00 of additional Indebtedness under Section 6.01(xvii); and (iv) the
Borrower or the Surviving Entity shall have delivered to the Administrative
Agent an Officer's Certificate and an opinion of counsel, each stating that such
consolidation, merger, sale, assignment, transfer, lease, conveyance or other
disposition and, if a subordinated amended credit agreement is required in
connection with such transaction, such amended credit agreement comply with the
applicable provisions of this Agreement and that all conditions precedent in
this Agreement relating to such transaction have been satisfied.
(b) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Restricted Subsidiaries of the Borrower the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Borrower, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Borrower.
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(c) Upon any consolidation, combination or merger or any transfer of
all or substantially all of the assets of the Borrower in accordance with the
foregoing, in which the Borrower is not the continuing corporation, the
successor Person formed by such consolidation or into which the Borrower is
merged or to which such conveyance, lease or transfer is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Borrower
under this Agreement and the Loans with the same effect as if such surviving
entity had been named as such. When a successor assumes all of the obligations
of its predecessor under this Agreement, the predecessor shall be released from
those obligations.
(d) Each Guarantor (other than any Guarantor whose Guarantee is to
be released in accordance with the terms of this Agreement or in connection with
any transaction complying with the provisions of Section 6.03) will not, and the
Borrower will not cause or permit any Guarantor to, consolidate with or merge
with or into any Person other than the Borrower or any other Guarantor unless:
(i) the entity formed by or surviving any such consolidation or merger (if other
than the Guarantor) or to which such sale, lease, conveyance or other
disposition shall have been made is a corporation organized and existing under
the laws of the United States or any State thereof or the District of Columbia;
(ii) such entity assumes by an amended subordinated credit agreement (in form
and substance reasonably satisfactory to the Administrative Agent) all of the
obligations of the Guarantor under its Guarantee and this Agreement and the
performance of every covenant in this Agreement on the part of the Guarantor to
be performed or observed; and (iii) the conditions in clauses (ii) and (iii) in
paragraph (a) (with references therein to clause (i)(2)(y) being deemed to be
references to clause (ii) of this paragraph) shall have been satisfied. Any
merger or consolidation of a Guarantor with and into the Borrower (with the
Borrower being the surviving entity) or another Guarantor that is a Wholly Owned
Restricted Subsidiary and the merger of Acquisition Co with and into Essex
pursuant to the terms of the Merger Agreement and the merger of Essex with and
into Superior Telecommunications need only comply with clause (iv) of the first
paragraph of this covenant.
6.08. Transactions with Affiliates. (a) The Borrower will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly,
enter into or permit to exist any transaction or series of related transactions
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with, or for the benefit of, any of
its Affiliates (each an "Affiliate Transaction"), other than (x) Affiliate
Transactions permitted under paragraph (b) below and (y) Affiliate Transactions
on terms that are no less favorable than those that might reasonably have been
obtained in a comparable transaction at such time on an arm's-length basis from
a Person that is not an Affiliate of the Borrower or such Restricted Subsidiary.
All Affiliate Transactions (and each series of related Affiliate Transactions
which are similar or part of a common plan) involving aggregate consideration in
excess of $5.0 million shall be approved by the Board of Directors
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of the Borrower or such Restricted Subsidiary, as the case may be, such approval
to be evidenced by a Board Resolution stating that such Board of Directors has
determined that such transaction complies with the foregoing provisions. If the
Borrower or any Restricted Subsidiary enters into an Affiliate Transaction (or a
series of related Affiliate Transactions which are similar or part of a common
plan) that involves an aggregate consideration of more than $20.0 million, the
Borrower or such Restricted Subsidiary, as the case may be, shall, prior to the
consummation thereof, also obtain a written opinion of an Independent Financial
Advisor to the effect that such transaction is fair to the Borrower or such
Restricted Subsidiary, as the case may be, from a financial point of view.
(b) The restrictions set forth in paragraph (a) above shall not
apply to (i) reasonable fees and compensation paid to and indemnity provided on
behalf of, officers, directors, employees or consultants of the Borrower or any
Restricted Subsidiary as determined in good faith by the Borrower's Board of
Directors or senior management; (ii) transactions exclusively between or among
the Borrower and any of its Restricted Subsidiaries or exclusively between or
among such Restricted Subsidiaries, provided such transactions are not otherwise
prohibited by this Agreement and, in the case of transactions with a Restricted
Subsidiary that is not a Guarantor, such transactions comply with clause (y) of
the first sentence of paragraph (a) of this Section 6.08; (iii) any agreement as
in effect as of the Borrowing Date or any amendment thereto or replacement
thereof or any transaction contemplated thereby (including pursuant to any
amendment thereto or replacement thereof) so long as any such amendment or
replacement is not more disadvantageous to the Lenders in any material respect
than the agreement as in effect on the Borrowing Date; (iv) Restricted Payments
and Permitted Investments permitted by this Agreement; (v) the Transaction
substantially in accordance with the terms of the Documents; (vi) the
performance of the Services Agreement and payments thereunder, provided that (x)
such payments may not exceed $5.0 million 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 clause (y) of
paragraph (a) of this Section 6.08; (vii) (x) the Parent Tax Allocation
Agreement and the Borrower and its Domestic Subsidiaries may make payments
thereunder and (y) the Alpine Tax Allocation Agreement and the Borrower and its
Domestic Subsidiaries may make payments thereunder; and (viii) upon consummation
of the Tender Offer, the Borrower may pay to Alpine a transaction fee in the
amount of $10.0 million.
6.09. Additional Guarantees. If (x) the Borrower acquires or creates
any Restricted Subsidiary (including by merger) or designates any Unrestricted
Subsidiary as a Restricted Subsidiary, and such Restricted Subsidiary is not a
Foreign Subsidiary or a Receivables Subsidiary or (y) any Restricted Subsidiary
guarantees or becomes an obligor under the Senior Secured Credit Agreement, the
Borrower shall cause such Restricted Subsidiary to (i) execute and deliver to
the Administrative Agent an amendment to this Agree-
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ment in form reasonably satisfactory to the Administrative Agent pursuant to
which such Restricted Subsidiary shall unconditionally guarantee all of the
Borrower's obligations under the Loans and this Agreement on the terms set forth
in this Agreement and (ii) deliver to the Administrative Agent an opinion of
counsel, subject to customary exceptions to the effect that such amendment has
been duly authorized, executed and delivered by such Restricted Subsidiary and
constitutes a legal, valid, binding and enforceable obligation of such
Restricted Subsidiary; provided that no such action will be required by any new
Restricted Subsidiary (that is not a Wholly Owned Restricted Subsidiary) to the
extent such new Restricted Subsidiary is a party to a preexisting agreement
which prohibits such new Restricted Subsidiary from becoming a Subsidiary
Guarantor hereunder; provided, further, such preexisting agreement was not
entered into for the purpose of avoiding the requirements of this Section 6.09
and the restrictions contained therein are no more adverse to the Borrower and
its Subsidiaries than to the other equity owners in such new Restricted
Subsidiary. In addition, each new Restricted 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
3 as such new Restricted Subsidiary would have had to deliver if such new
Restricted Subsidiary were a Credit Party on the Borrowing Date. Thereafter,
such Restricted Subsidiary shall be a Subsidiary Guarantor for all purposes of
this Agreement.
6.10. Designation of Unrestricted Subsidiaries. (a) The Board of
Directors may designate any Subsidiary (including any newly acquired or newly
formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary owns
any Capital Stock of, or owns or holds any Lien on any property of, the Borrower
or any other Restricted Subsidiary of the Borrower that is not a Subsidiary of
the Subsidiary to be so designated; provided that (x) the Borrower certifies to
the Administrative Agent that such designation complies with the provisions of
Section 6.02 of this Agreement, (y) each Subsidiary to be so designated and each
of its Subsidiaries has not at the time of designation, and does not thereafter,
create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable with respect to any Indebtedness pursuant to which the lender
has recourse to any of the assets of the Borrower or any of its Restricted
Subsidiaries and (z) immediately before and after giving effect to such
designation, no Default or Event of Default shall have occurred and be
continuing.
(b) The Board of Directors may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary only if (x) immediately after giving effect to
such designation, the Borrower is able to incur at least $1.00 of additional
Indebtedness in compliance with Section 6.01(xvii) and (y) immediately before
and immediately after giving effect to such designation, no Default or Event of
Default shall have occurred and be continuing.
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(c) Any such designation in paragraph (a) or (b) above by the Board
of Directors shall be evidenced to the Administrative Agent by promptly filing
with the Administrative Agent a copy of the Board Resolution giving effect to
such designation and an officers' certificate certifying that such designation
complied with the foregoing provisions.
6.11. Conduct of Business. The Borrower and its Restricted
Subsidiaries will not engage in any business other than the businesses in which
the Borrower and its Restricted Subsidiaries are engaged in as of the Borrowing
Date and activities incidental thereto, and similar or related businesses.
6.12. Limitation of Activities of Parent. The Parent shall not (i)
hold or acquire any assets (other than the Capital Stock of the Borrower,
Superior Trust I and DNE Systems and its Subsidiaries and insignificant assets),
(ii) incur any Indebtedness (other than the Trust Preferred Securities, its
Guarantee, its guarantee under the Senior Secured Credit Agreement 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, activities
reasonably related thereto and those consistent with its status as a publicly
traded company.
7. EVENTS OF DEFAULT.
Upon the occurrence of any of the following specified events (each
an "Event of Default"):
7.01. Failure to Make Payments When Due. Failure to pay interest on
the Loans or fees when the same becomes due and payable and the default
continues for a period of 30 days (whether or not such payment shall be
prohibited by the subordination provisions of this Agreement); and failure to
pay the principal on the Loans, when such principal becomes due and payable, at
maturity, upon mandatory prepayment or otherwise (including the failure to make
a payment to purchase Loans tendered pursuant to a Change of Control Offer or a
Net Proceeds Offer) (whether or not such payment shall be prohibited by the
subordination provisions of this Agreement);
7.02. Breach of Representations, etc. Any representation, warranty
or statement made by any Credit Party in any Credit Document or in any statement
or certificate delivered pursuant thereto shall prove to be untrue in any
material respect on the date as of which made or deemed made;
7.03. Breach of Covenants. Default in the observance or performance
of any other covenant or agreement contained in this Agreement which default
continues for a period of 45 days after the Borrower receives written notice
specifying the default (and demanding that such default be remedied) from the
Administrative Agent or the Lenders
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holding at least 25% of the outstanding principal amount of the Loans (except in
the case of a default with respect to Section 6.07 or Section 6.12, which will
constitute an Event of Default with such notice requirement but without such
passage of time requirement);
7.04. Default Under Other Agreements. Default under any mortgage,
indenture or other instrument or agreement under which there may be issued, or
by which there may be secured or evidenced, Indebtedness of the Parent, the
Borrower or any Restricted Subsidiary, whether such Indebtedness now exists or
is incurred after the Closing Date, which default (a) is caused by a failure to
pay such Indebtedness at its express final maturity within the applicable
express grace period (and such failure continues for a period of 30 days or
more) or (b) results in the acceleration of such Indebtedness prior to its
express final maturity (which acceleration is not rescinded, annulled or
otherwise cured within 30 days of receipt by the Parent, the Borrower or such
Restricted Subsidiary of such notice of acceleration) and, in each case, the
principal amount of such Indebtedness, together with any other Indebtedness with
respect to which an event described in clause (a) or (b) has occurred and is
continuing, aggregates $25.0 million or more;
7.05. Judgments. One or more judgments in an aggregate amount in
excess of $15.0 million shall have been rendered against the Parent, the
Borrower or any Restricted Subsidiary and such judgments remain undischarged,
unpaid or unstayed for a period of 60 days after such judgment or judgments
become final and non-appealable;
7.06. Bankruptcy. The Parent, the Borrower or any Significant
Subsidiary shall commence a voluntary case concerning itself under Title 11 of
the United States Code entitled "Bankruptcy," as now or hereafter in effect, or
any successor thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against the Parent, the Borrower or any Significant Subsidiary and the
petition is not controverted within 30 days, or is not dismissed within 60 days,
after commencement of the case; or a custodian (as defined in the Bankruptcy
Code) is appointed for, or takes charge of, all or substantially all of the
property of the Parent, the Borrower or any Significant Subsidiary; or the
Parent, the Borrower or any Significant Subsidiary commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Parent, the
Borrower or any Significant Subsidiary; or there is commenced against the
Parent, the Borrower or any Significant Subsidiary any such proceeding which
remains undismissed for a period of 60 days; or the Parent, the Borrower or any
Significant Subsidiary is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding is entered; or the
Parent, the Borrower or any Significant Subsidiary suffers any appointment of
any custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 days; or the Parent, the
Borrower or any Significant Subsidiary makes a general assignment for the
benefit of creditors; or any cor-
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porate action is taken by the Parent, the Borrower or any Significant Subsidiary
for the purpose of effecting any of the foregoing;
7.07. Merger. The Merger Agreement shall terminate pursuant to its
terms or the Merger shall not be consummated by October 31, 1999; and
7.08. Guarantees. Any of the Guarantees ceases to be in full force
and effect or any of the Guarantees is declared to be null and void and
unenforceable or any of the Guarantees is found to be invalid or any of the
Guarantors denies its liability under its Guarantee (other than in each case by
reason of release of a Subsidiary Guarantor in accordance with the terms of this
Agreement and the Guarantees); provided, however, that if any such Guarantee is
the Guarantee of a Subsidiary Guarantor that is not a Significant Subsidiary,
then such event shall only result in an Event of Default under this Section 7.08
if such event , together with similar events involving Subsidiary Guarantors
that are not Significant Subsidiaries, would have a Material Adverse Effect.
7.09. Remedies. If an Event of Default (other than an Event of
Default specified in Section 7.06 above with respect to the Borrower) shall
occur and be continuing, the Administrative Agent or the Lenders holding at
least 25% in principal amount of outstanding Loans may declare the principal of
and accrued interest on all the Loans to be due and payable by notice in writing
to the Borrower and the Administrative Agent specifying the respective Event of
Default and that it is a "notice of acceleration" (the "Acceleration Notice"),
and the same (i) shall become immediately due and payable or (ii) if there are
any amounts outstanding under the Senior Secured Credit Agreement, shall become
immediately due and payable upon the first to occur of an acceleration under the
Senior Secured Credit Agreement or 5 Business Days after receipt by the Borrower
and the Representative under the Senior Secured Credit Agreement of such
Acceleration Notice but only if such Event of Default is then continuing. If an
Event of Default specified in Section 7.06 above with respect to the Borrower
occurs and is continuing, then all unpaid principal of, and premium, if any, and
accrued and unpaid interest on all of the outstanding Loans shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Administrative Agent or any Lender.
In the event of a declaration of acceleration because an Event of
Default set forth in Section 7.04 above has occurred and is continuing, such
declaration of acceleration shall be automatically rescinded and annulled if
either (x) the holders of the Indebtedness which is the subject of such Event of
Default have waived such failure to pay at maturity or have rescinded the
acceleration in respect of such Indebtedness within 60 days of such maturity or
declaration of acceleration, as the case may be, and no other Event of Default
has occurred during such 60-day period which has not been cured or waived or (y)
such Indebtedness shall have been discharged or the maturity thereof shall have
been extended such that it is not then due and payable, or the underlying
default has been cured (and any accel-
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eration based thereon of such other Indebtedness has been rescinded), within 60
days of such maturity or declaration of acceleration, as the case by be.
At any time after a declaration of acceleration with respect to the
Loans as described in the preceding paragraph, the Required Lenders may rescind
and cancel such declaration and its consequences (i) if the rescission would not
conflict with any judgment or decree, (ii) if all existing Events of Default
have been cured or waived except nonpayment of principal or interest that has
become due solely because of the acceleration, (iii) to the extent the payment
of such interest is lawful, interest on overdue installments of interest and
overdue principal, which has become due otherwise than by such declaration of
acceleration, has been paid, (iv) if the Borrower has paid the Administrative
Agent its reasonable compensation and reimbursed the Administrative Agent for
its expenses, disbursements and advances and (v) in the event of the cure or
waiver of an Event of Default of the type described in Section 7.06, the
Administrative Agent shall have received an officers' certificate and an opinion
of counsel that such Event of Default has been cured or waived. No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.
The Required Lenders may waive any existing Default or Event of
Default under this Agreement, and its consequences, except a default in the
payment of the principal of or interest on any Loans or Notes.
The Lenders may not enforce this Agreement or the Loans except as
provided in this Agreement. Subject to the provisions of this Agreement relating
to the duties of the Administrative Agent, the Administrative Agent is under no
obligation to exercise any of its rights or powers under this Agreement at the
request, order or direction of any of the Lenders, unless such Lenders have
offered to the Administrative Agent reasonable indemnity. Subject to all
provisions of this Agreement and applicable law, the Required Lenders have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Administrative Agent or exercising any trust or power
conferred on the Administrative Agent.
The Borrower shall provide an Officers' Certificate to the
Administrative Agent promptly upon any such officer obtaining knowledge of any
Default or Event of Default (provided that such officers shall provide such
certification at least annually whether or not they know of any Default or Event
of Default) that has occurred and, if applicable, describe such Default or Event
of Default and the status thereof.
8. SUBORDINATION.
8.01. Obligations Subordinated to Senior Indebtedness. Each of the
Borrower and each Guarantor covenants and agrees, and each Lender, by its
acceptance thereof, likewise covenants and agrees, that payment of all
Obligations in respect of the
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Loans, Notes and Guarantees shall be subject to the provisions of this Section
8, and each Lender (including any assignee or participant thereof) accepts and
agrees that the payment of all Obligations on the Loans, the Notes and
Guarantees by the Borrower and the Guarantors shall, to the extent and in the
manner herein set forth, be subordinated and junior in right of payment to the
prior payment in full in cash or Cash Equivalents of all Obligations in respect
of Senior Indebtedness, including, without limitation, the Borrower's and the
Guarantors' obligations under the Senior Secured Credit Agreement, that the
subordination is for the benefit of, and shall be enforceable directly by, the
holders of Senior Indebtedness, and that each holder of Senior Indebtedness
whether now outstanding or hereafter created, incurred, assumed or guaranteed
shall be deemed to have acquired Senior Indebtedness in reliance upon the
covenants and provisions contained in this Agreement and the Notes.
8.02. Suspension of Payment When Senior Indebtedness Is in Default.
(a) If any default occurs and is continuing in the payment when due, whether at
maturity, upon any redemption, by declaration or otherwise, of any principal of,
interest on, unpaid drawings for letters of credit issued in respect of, or
regularly accruing fees with respect to, any Senior Indebtedness, no payment of
any kind or character shall be made by or on behalf of the Borrower, any
Guarantor or any other Person on their behalf with respect to any Obligations on
the Loans, the Guarantees or the Notes or to acquire any of the Loans, the
Guarantees or the Notes for cash or property or otherwise. In addition, if any
other event of default occurs and is continuing with respect to any Senior
Indebtedness, as such event of default is defined in the instrument creating or
evidencing such Senior Indebtedness, permitting the holders of such Senior
Indebtedness then outstanding to accelerate the maturity thereof and if the
Representative for the respective issue of Senior Indebtedness gives notice of
the event of default to the Administrative Agent (a "Default Notice"), then,
unless and until such event of default have been cured or waived or have ceased
to exist or the Administrative Agent receives notice thereof from the
Representative for the respective issue of Senior Indebtedness terminating the
Blockage Period (as defined below) or all Obligations on Senior Indebtedness
have been repaid in full in cash or Cash Equivalents, during the 180 days after
the delivery of such Default Notice (the "Blockage Period"), neither the
Borrower, nor any Guarantor nor any other Person on their behalf shall (x) make
any payment of any kind or character with respect to any Obligations on the
Loans, the Guarantees or the Notes or (y) acquire any of the Loans, the
Guarantees or the Notes for cash or property or otherwise.
(b) Notwithstanding anything herein to the contrary, in no event
will a Blockage Period extend beyond 180 days from the date any payment on the
Loans was due and only one such Blockage Period may be commenced within any 360
consecutive days. No event of default which existed or was continuing on the
date of the commencement of any Blockage Period with respect to the Senior
Indebtedness shall be, or be made, the basis
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for commencement of a second Blockage Period by the Representative of such
Senior Indebtedness whether or not within a period of 360 consecutive days,
unless such event of default shall have been cured or waived for a period of not
less than 90 consecutive days (it being acknowledged that any subsequent action,
or any breach of any financial covenants for a period commencing after the date
of commencement of such Blockage Period that, in either case, would give rise to
an event of default pursuant to any provisions under which an event of default
previously existed or was continuing shall constitute a new event of default for
this purpose).
(c) In the event that, notwithstanding the foregoing, any payment
shall be received by the Administrative Agent or any Lender when such payment is
prohibited by Section 8.02(a) or (b), such payment shall be held in trust for
the benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness (pro rata to such holders on the basis of the respective amount of
Senior Indebtedness held by such holders) or their respective Representatives,
as their respective interests may appear. The Administrative Agent shall be
entitled to rely on information regarding amounts then due and owing on the
Senior Indebtedness, if any, received from the holders of Senior Indebtedness
(or their Representatives) or, if such information is not received from such
holders or their Representatives, from the Borrower or the Guarantors and only
amounts included in the information provided to the Administrative Agent shall
be paid to the holders of Senior Indebtedness.
(d) Nothing contained in this Section 8 shall limit the right of the
Administrative Agent or the Lenders to take any action to accelerate the
maturity of the Loans and the Notes or to pursue any rights or remedies
hereunder; provided that all Senior Indebtedness thereafter due or declared to
be due shall first be paid in full in cash or Cash Equivalents before the
Lenders are entitled to receive any payment of any kind or character with
respect to Obligations on the Loans, the Guarantees or the Notes.
8.03. Loans Subordinated to Prior Payment of All Senior Indebtedness
on Dissolution, Liquidation or Reorganization of Borrower. (a) Upon any payment
or distribution of assets of the Borrower or any Guarantor of any kind or
character, whether in cash, property or securities, to creditors upon any total
or partial liquidation, dissolution, winding-up, reorganization, assignment for
the benefit of creditors or marshaling of assets of the Borrower or such
Guarantor, as the case may be, or in a bankruptcy, reorganization, insolvency,
receivership or other similar proceeding relating to the Borrower or such
Guarantor, as the case may be, or its or their property, whether voluntary or
involuntary, all Obligations due or to become due upon all Senior Indebtedness
of the Borrower or such Guarantor, as the case may be, shall first be paid in
full in cash or Cash Equivalents, or such payment shall be duly provided for to
the satisfaction of the holders of such Senior Indebtedness, before any payment
or distribution of any kind or character is made on account of any Obligations
in respect of the Loans or the Notes, or the Guarantees of such
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Guarantor, as the case may be, or for the acquisition of any of the Loans or the
Notes for cash or property or otherwise. Upon any such dissolution, winding-up,
liquidation, reorganization, receivership or similar proceeding, any payment or
distribution of assets of the Borrower or any Guarantor of any kind or
character, whether in cash, property or securities, to which the Lenders or the
Administrative Agent under this Agreement would be entitled, except for the
provisions hereof, shall be paid by the Borrower or such Guarantor, as the case
may be, or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, or by the Lenders or by the
Administrative Agent under this Agreement if received by them, directly to the
holders of Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of Senior
Indebtedness remaining unpaid until all such Senior Indebtedness has been paid
in full in cash or Cash Equivalents after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of Senior
Indebtedness.
(b) To the extent any payment of Senior Indebtedness (whether by or
on behalf of the Borrower or any Guarantor, as proceeds of security or
enforcement of any right of setoff or otherwise) is declared to be fraudulent or
preferential, set aside or required to be paid to any receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person under any
bankruptcy, insolvency, receivership, fraudulent conveyance or similar law,
then, if such payment is recovered by, or paid over to, such receiver, trustee
in bankruptcy, liquidating trustee, agent or other similar Person, the Senior
Indebtedness or part thereof originally intended to be satisfied shall be deemed
to be reinstated and outstanding as if such payment had not occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Borrower or any Guarantor of any kind or
character, whether in cash, property or securities, shall be received by the
Administrative Agent or any Lender when such payment or distribution is
prohibited by Section 8.03(a), such payment or distribution shall be held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness of Borrower or such Guarantor, as the case may be (pro rata
to such holders on the basis of the respective amount of Senior Indebtedness
held by such holders), or their respective Representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear, for application
to the payment of such Senior Indebtedness remaining unpaid until all such
Senior Indebtedness has been paid in full in cash or Cash Equivalents, after
giving effect to any concurrent payment, distribution or provision therefor to
or for the holders of such Senior Indebtedness.
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(d) The consolidation of the Borrower or any Guarantor with, or the
merger of the Borrower or any Guarantor with or into, another corporation or the
liquidation or dissolution of the Borrower following the conveyance or transfer
of all or substantially all of its assets to another corporation upon the terms
and conditions provided in Section 6.07 hereof and as long as permitted under
the terms of the Senior Indebtedness shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 8.03
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, assume the Borrower's or such Guarantor's obligations,
as the case may be, hereunder in accordance with Section 6.07 hereof.
8.04. Lenders to Be Subrogated to Rights of Holders of Senior
Indebtedness. Subject to the payment in full in cash or Cash Equivalents of all
Senior Indebtedness, the Lenders shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Borrower or the applicable Guarantor, as the case
may be, applicable to the Senior Indebtedness until the Loans shall be paid in
full; and, for the purposes of such subrogation, no such payments or
distributions to the holders of the Senior Indebtedness by or on behalf of the
Borrower or any Guarantor or by or on behalf of the Lenders by virtue of this
Section 8 which otherwise would have been made to the Lenders shall, as between
the Borrower or the applicable Guarantor, as the case may be, and the Lenders,
be deemed to be a payment by the Borrower or the applicable Guarantor, as the
case may be, to or on account of the Senior Indebtedness, it being understood
that the provisions of this Section 8 are and are intended solely for the
purpose of defining the relative rights of the Lenders, on the one hand, and the
holders of the Senior Indebtedness, on the other hand.
8.05. Obligations of the Borrower Unconditional. Nothing contained
in this Section 8 or elsewhere in this Agreement or in the Notes is intended to
or shall impair, as between the Borrower and the Lenders, the obligation of the
Borrower, which is absolute and unconditional, to pay to the Lenders the
principal of and interest on the Loans as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Lenders and creditors of the Borrower other than the
holders of the Senior Indebtedness, nor shall anything herein or therein prevent
the Administrative Agent or any Lender from exercising all remedies otherwise
permitted by applicable law upon default under this Agreement, subject to the
rights, if any, under this Section 8 of the holders of Senior Indebtedness in
respect of cash, property or securities of the Borrower received upon the
exercise of any such remedy. Upon any payment or distribution of assets or
securities of the Borrower referred to in this Section 8, the Administrative
Agent and the Lenders shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which any liquidation, dissolution,
winding-up or reorganization proceedings are pending, or a certificate of the
receiver, trustee in bankruptcy, liquidating trustee or agent or other Person
making any payment or distribution to the Ad-
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ministrative Agent or to the Lenders for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of Senior
Indebtedness and other Indebtedness of the Borrower, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Section 8. Nothing in this Section 8 shall
apply to the claims of, or payments to, the Administrative Agent, in its
capacity as such. The Administrative Agent shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself or itself to
be a holder of any Senior Indebtedness (or a trustee on behalf of, or other
representative of, such holder) to establish that such notice has been given by
a holder of such Senior Indebtedness or a trustee or representative on behalf of
any such holder.
In the event that the Administrative Agent determines in good faith
that any evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Section 8, the Administrative Agent may request such Person to
furnish evidence to the reasonable satisfaction of the Administrative Agent as
to the amount of Senior Indebtedness held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such Person under this Section 8, and if
such evidence is not furnished, the Administrative Agent may defer any payment
to such Person pending judicial determination as to the right of such Person to
receive such payment.
8.06. Administrative Agent Entitled to Assume Payments Not
Prohibited in Absence of Notice. The Borrower shall give prompt written notice
to the Administrative Agent of any fact known to the Borrower which would
prohibit the making of any payment to or by the Administrative Agent in respect
of the Loans, the Guarantees or the Notes pursuant to the provisions of this
Section 8. Regardless of anything to the contrary contained in this Section 8 or
elsewhere in this Agreement, the Administrative Agent shall not be charged with
knowledge of the existence of any default or event of default with respect to
any Senior Indebtedness or of any other facts which would prohibit the making of
any payment to or by the Administrative Agent unless and until the
Administrative Agent shall have received notice in writing from the Borrower or
any Guarantor, or from a holder of Senior Indebtedness or a Representative
therefor, together with proof satisfactory to the Administrative Agent of such
holding of Senior Indebtedness or of the authority of such Representative, and,
prior to the receipt of any such written notice, the Administrative Agent shall
be entitled to assume that no such facts exist.
8.07. Application by Administrative Agent of Assets Deposited with
It. Any deposit of assets or securities by or on behalf of the Borrower or any
Guarantor with the Administrative Agent (whether or not in trust) for the
payment of principal of or interest on any Loans, the Guarantees or Notes shall
be subject to the provisions of this Section 8; provided, however, that if prior
to the second Business Day preceding the date on which by
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the terms of this Agreement any such assets may become distributable for any
purpose (including, without limitation, the payment of either principal of or
interest on any Loan or Note) the Administrative Agent shall not have received
with respect to such assets the notice provided for in Section 8.06, then the
Administrative Agent shall have full power and authority to receive such assets
and to apply the same to the purpose for which they were received, and shall not
be affected by any notice to the contrary received by it on or after such date.
Nothing contained in this Section 8.07 shall limit the right of the holders of
Senior Indebtedness to recover payments as contemplated by this Section 8.
8.08. No Waiver of Subordination Provisions. (a) No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Borrower or any Guarantor or by any act
or failure to act by any such holder, or by any non-compliance by the Borrower
or any Guarantor with the terms, provisions and covenants of this Agreement,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
(b) Without limiting the generality of subsection (a) of this
Section 8.08, the holders of Senior Indebtedness may, at any time and from time
to time, without the consent of or notice to the Administrative Agent or the
Lenders, without incurring responsibility to the Administrative Agent or the
Lenders and without impairing or releasing the subordination provided in this
Section 8 or the obligations hereunder of the Lenders to the holders of Senior
Indebtedness, do any one or more of the following: (1) change the manner, place,
terms or time of payment of, or renew or alter, Senior Indebtedness or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (2) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (3) release any
Person liable in any manner for the collection or payment of Senior
Indebtedness; and (4) exercise or refrain from exercising any rights against the
Borrower and any other Person.
8.09. Lenders Authorize Administrative Agent to Effectuate
Subordination of Loans. Each Lender authorizes and expressly directs the
Administrative Agent on such Lender's behalf to take such action as may be
necessary or appropriate to effect the subordination provisions contained in
this Section 8, and appoints the Administrative Agent such Lender's
attorney-in-fact for such purpose, including, in the event of any liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of creditors
or marshaling of assets of the Borrower or any Guarantor tending towards
liquidation or reorganization of the business and assets of the Borrower or any
Guarantor, the immediate filing of a claim for the unpaid balance of such
Lender's Loans in the form required in said proceedings and cause said claim to
be approved. If the Administrative Agent does not file a proper claim or proof
of debt in the form required in such proceeding prior to 30 days before the
expira-
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tion of the time to file such claim or claims, then any of the holders of the
Senior Indebtedness or their Representative is hereby authorized to file an
appropriate claim for and on behalf of the Lenders. Nothing herein contained
shall be deemed to authorize the Administrative Agent or the holders of Senior
Indebtedness or their Representative to authorize or consent to or accept or
adopt on behalf of any Lender any plan of reorganization, arrangement,
adjustment or composition affecting the Loans or the rights of any Lender, or to
authorize the Administrative Agent or the holders of Senior Indebtedness or
their Representative to vote in respect of the claim of any Lender in any such
proceeding.
8.10. Right of Administrative Agent and Lenders to Hold Senior
Indebtedness. The Administrative Agent and each Lender shall be entitled to all
the rights set forth in this Section 8 with respect to any Senior Indebtedness
which may at any time be held by it in its individual or any other capacity to
the same extent as any other holder of Senior Indebtedness and nothing in this
Agreement shall deprive the Administrative Agent or any Lender or any such agent
of any of its rights as such holder.
8.11. This Section 8 Not to Prevent Events of Default. The failure
to make a payment on account of principal of or interest on the Loans by reason
of any provision of this Section 8 will not be construed as preventing the
occurrence of an Event of Default.
Nothing contained in this Section 8 shall limit the right of the
Administrative Agent or the Lenders to take any action to accelerate the
maturity of the Loans pursuant to Section 7 or to pursue any rights or remedies
hereunder or under applicable law, subject to the rights, if any, under this
Section 8 of the holders, from time to time, of Senior Indebtedness.
8.12. No Fiduciary Duty of Administrative Agent to Holders of Senior
Indebtedness. The Administrative Agent shall not be deemed to owe any fiduciary
duty to the holders of Senior Indebtedness, and it undertakes to perform or
observe such of its covenants and obligations as are specifically set forth in
this Section 8, and no implied covenants or obligations with respect to the
Senior Indebtedness shall be read into this Agreement against the Administrative
Agent. The Administrative Agent shall not be liable to any such holders if it
shall pay over or deliver to the Lenders or the Borrower or any other Person
money or assets in compliance with the terms of this Agreement. Nothing in this
Section 8.12 shall affect the obligation of any Person other than the
Administrative Agent and the Lenders to hold such payment for the benefit of,
and to pay such payment over to, the holders of Senior Indebtedness or their
Representative.
8.13. Effect on Senior Indebtedness. No amendment of this Agreement
shall adversely affect the rights of any holder of Senior Indebtedness under
this Section 8 of this Agreement, without the consent of such holder.
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9. DEFINITIONS AND ACCOUNTING TERMS.
9.01. Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Acquired Indebtedness" shall mean Indebtedness of a Person or any
of its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary or at the time it merges or consolidates with the Borrower or any of
its Restricted Subsidiaries or assumed in connection with the acquisition of
assets from such Person and in each case not incurred by such Person in
connection with, or in anticipation or contemplation of, such Person becoming a
Restricted Subsidiary or such acquisition, merger or consolidation.
"Acquisition" shall mean the acquisition by the Parent (through its
ownership of the Borrower) of 100% of the outstanding shares of capital stock of
Essex International Inc. pursuant to the Acquisition Documents.
"Acquisition Co" shall mean the single purpose, newly formed wholly
owned subsidiary of the Borrower party to the Merger Agreement.
"Acquisition Documents" shall mean each of the Tender Offer
Documents and the Merger Agreement.
"Adjusted Maximum Amount" shall have the meaning provided in Section
12.01(c) of this Agreement.
"Administrative Agent" shall mean BTCo, and shall include any
successor appointed pursuant to Section 10.10.
"Affiliate" shall mean, with respect to any specified Person, any
other Person who directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such specified
Person. The term "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative of the foregoing. 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 Borrower and
its Subsidiaries so long as the Service Agreement is in place.
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"Agent" shall mean the Administrative Agent and the Syndication
Agent, collectively.
"Aggregate Payments" shall have the meaning provided in Section
12.01(c) of this Agreement.
"Agreement" shall mean this Senior Subordinated Credit Agreement, as
modified, supplemented, amended, restated (including any amendment and
restatement hereof), extended, renewed, refinanced or replaced from time to
time.
"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 respective Affiliates dated
as of October 2, 1996, effective as of May 1, 1996.
"Alternate Base Rate" shall mean, at any time, the higher of (i) the
Prime Lending Rate and (ii) 1/2 of 1% in excess of the Federal Funds Rate.
"Alternate Base Rate Loan" shall mean a Loan for which the Interest
Rate on such Loan is the Alternate Base Rate.
"amend" shall mean amend, modify, supplement, restate or amend and
restate, including successively; and "amending" and "amended" have correlative
meanings.
"Approved Lender" shall have the meaning provided in the definition
of "Cash Equivalents."
"Asset Acquisition" shall mean (a) an Investment by the Borrower or
any Restricted Subsidiary in any other Person pursuant to which such Person
shall become a Restricted Subsidiary of the Borrower or of any Restricted
Subsidiary of the Borrower, or shall be merged with or into the Borrower or any
Restricted Subsidiary, or (b) the acquisition by the Borrower or any Restricted
Subsidiary of the assets of any Person (other than a Restricted Subsidiary)
which constitute all or substantially all of the assets of such Person or
comprises any division or line of business of such Person or any other
properties or assets of such Person other than in the ordinary course of
business.
"Asset Sale" shall mean any direct or indirect sale, issuance,
conveyance, transfer, assignment or other transfer for value by the Borrower or
any of its Restricted Subsidiaries (including any sale and leaseback
transaction) to any Person other than the Borrower or a Wholly Owned Restricted
Subsidiary that is a Guarantor of (a) any Capital Stock of any Subsidiary (other
than an Unrestricted Subsidiary (excluding the Israeli Sub-
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sidiaries)); or (b) any other property or assets of the Borrower or any
Restricted Subsidiary other than in the ordinary course of business; provided,
however, that Asset Sales shall not include (i) a transaction or series of
related transactions involving aggregate consideration of less than $500,000 in
any fiscal year of the Borrower; (ii) the sale, lease, conveyance, disposition
or other transfer of all or substantially all of the assets of the Borrower as
permitted by Section 6.07; (iii) a transaction or series of related transactions
pursuant to any foreclosure of assets or other remedy provided by applicable law
to a creditor of the Borrower or any Subsidiary with a Lien on such assets,
which Lien is permitted under this Agreement; provided that such foreclosure or
other remedy is conducted in a commercially reasonable manner or in accordance
with any Bankruptcy Law; (iv) a transaction or series of related transactions
involving only Cash Equivalents or inventory in the ordinary course of business
or obsolete, worn-out or outmoded equipment in the ordinary course of business
of the Borrower; (v) a transaction or series of related transactions involving
only the lease or sublease of any real or personal property in the ordinary
course of business or transfers for security purposes only; (vi) a transaction
or series of related transactions resulting from (a) the designation of any
Restricted Subsidiary as an Unrestricted Subsidiary, or the contribution to the
capital of any Unrestricted Subsidiary, in accordance with and pursuant to the
applicable provisions of this Agreement or (b) the sale of Capital Stock of any
Unrestricted Subsidiary (other than the Israeli Subsidiaries) or the sale of all
or substantially all of the assets of any Unrestricted Subsidiary (other than
the Israeli Subsidiaries); (vii) the sale or discount, in each case without
recourse (other than recourse for a breach of a representation or warranty), of
accounts receivable arising in the ordinary course of business, but only in
connection with the compromise or collection thereof in the ordinary course of
business and not as part of a financing transaction; and (viii) the sale or
discount or other financing of accounts receivable pursuant to the Receivables
Financing Agreement.
"Assignment and Assumption Agreement" shall mean an Assignment and
Assumption Agreement substantially in the form of Exhibit F (appropriately
completed).
"Authorized Officer" shall mean any senior officer of the Borrower,
the Parent or Essex, as the case may be, designated as such in writing to the
Administrative Agent by the Borrower, the Parent or Essex to the extent
reasonably acceptable to the Administrative Agent.
"Bankruptcy Code" shall have the meaning provided in Section 7.06.
"Bankruptcy Law" shall mean Title 11, U.S. Code or any similar
Federal, state or foreign law for relief of debtors.
"Basket" shall have the meaning provided in Section 6.02(a).
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"Board of Directors" shall mean as to any Person, the board of
directors of such Person or any duly authorized committee thereof.
"Board Resolution" shall mean with respect to any Person, a copy of
a resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Administrative Agent.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement, and shall include any successor as provided in Section 6.07.
"Borrowing" shall mean the borrowing of the Loans from all the
Lenders having Commitments on the Closing Date.
"Borrowing Amount" shall mean in a maximum aggregate principal
amount of $200,000,000 available in a single borrowing on the Borrowing Date.
"Borrowing Date" shall mean the Closing Date.
"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, LIBOR 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 in the LIBOR market.
"Cables of Zion" shall mean Cables of Zion United Works Ltd., a
company organized under the laws of Israel.
"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.
"Capital Stock" shall mean (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of Common Stock and Preferred Stock of such Person and (ii) with
respect to any Person that is not a corporation, any and all partnership or
other equity interests of such Person, and in each case any options, warrants or
other rights to purchase or acquire such stocks, shares and interests.
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"Capitalized Lease Obligations" shall mean, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined 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 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 Moody's,
as the case may be, 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 Moody's, (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.
"Change of Control" shall mean (a) the Borrower 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 Borrower); 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 have (A) 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
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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 Borrower's directors; (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 Borrower.
"Closing Date" shall have the meaning provided in Section 11.10.
"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 this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Commitment" shall mean, for each Lender, the amount set forth
opposite such Lender's name in Schedule I directly below the column entitled
"Senior Subordinated Term Loan Commitment."
"Common Stock" of any Person shall mean any and all shares,
interests or other participations in, and other equivalents (however designated
and whether voting or non-voting) of such Person's common stock, whether
outstanding on the Closing Date or issued after the Closing Date, and includes,
without limitation, all series and classes of such common stock.
"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 Borrower and its Restricted 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 deducted in determining
Consolidated EBIT for such period.
"Consolidated Fixed Charge Coverage Ratio" shall mean the ratio of
Consolidated EBITDA of such Person during the four full fiscal quarters (the
"Four Quarter Period") ending on or prior to the date of the transaction giving
rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio (the
"Transaction Date") to Consolidated Fixed Charges of such Person for the Four
Quarter Period. Notwithstanding the foregoing, for any calculation of the
Consolidated Fixed Charge Coverage Ratio occurring on or prior to the first
anniversary of the Borrowing Date, "Consolidated Fixed Charge Coverage Ra-
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tio" shall mean the ratio of Consolidated EBITDA of such Person during the
number of full fiscal quarters ending after the Borrowing Date to Consolidated
Fixed Charges of such Person (calculated after giving effect on a pro forma
basis to the issuance of the Trust Preferred Securities as if such issuance
occurred on the Borrowing Date) for such period (with references in the next
succeeding sentence to "Four Quarter Period" being deemed to be references to
the number of full fiscal quarters ending after the Borrowing Date). In addition
to and without limitation of the foregoing, for purposes of this definition,
"Consolidated EBITDA" and "Consolidated Fixed Charges" shall be calculated after
giving effect on a pro forma basis for the period of such calculation to (i) the
incurrence or repayment of any Indebtedness of such Person or any of its
Restricted Subsidiaries (and the application of the proceeds thereof) giving
rise to the need to make such calculation and any incurrence or repayment of
other Indebtedness (and the application of the proceeds thereof), other than the
incurrence or repayment of Indebtedness in the ordinary course of business for
working capital purposes pursuant to working capital or revolving credit
facilities, occurring during the Four Quarter Period or at any time subsequent
to the last day of the Four Quarter Period and on or prior to the Transaction
Date, as if such incurrence or repayment, as the case may be (and the
application of the proceeds thereof), occurred on the first day of the Four
Quarter Period and (ii) any Asset Sales or Asset Acquisitions (including,
without limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Restricted Subsidiaries
(including any Person who becomes a Restricted Subsidiary as a result of the
Asset Acquisition) incurring, Acquired Indebtedness and also including any
Consolidated EBITDA attributable to the assets which are the subject of the
Asset Acquisition or Asset Sale during the Four Quarter Period) occurring during
the Four Quarter Period or at any time subsequent to the last day of the Four
Quarter Period and on or prior to the Transaction Date, as if such Asset Sale or
Asset Acquisition (including the incurrence, assumption or liability for any
such Acquired Indebtedness) occurred on the first day of the Four Quarter
Period; provided, however, that pro forma effect shall not be given to the
Transactions in calculating "Consolidated EBITDA" and "Consolidated Interest
Expense." If such Person or any of its Restricted Subsidiaries directly or
indirectly guarantees or proposes to guarantee Indebtedness of a third Person
(other than a Restricted Subsidiary), the preceding sentence shall give effect
to the incurrence of such guaranteed Indebtedness as if such Person or any
Restricted Subsidiary of such Person had directly incurred or otherwise assumed
such guaranteed Indebtedness. Furthermore, in calculating "Consolidated Fixed
Charges" for purposes of determining the denominator (but not the numerator) of
this "Consolidated Fixed Charge Coverage Ratio," (1) interest on outstanding
Indebtedness determined on a fluctuating basis as of the Transaction Date and
which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the Transaction Date; (2) if interest on any
Indebtedness actually incurred on the Transaction Date may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the interest rate
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in effect on the Transaction Date will be deemed to have been in effect during
the Four Quarter Period; (3) notwithstanding clause (1) above, interest on
Indebtedness determined on a fluctuating basis, to the extent such interest is
covered by agreements relating to Interest Rate Protection Agreements, shall be
deemed to accrue at the rate per annum resulting after giving effect to the
operation of such agreements; and (4) to the extent pro forma effect is being
given to interest expense attributable to Indebtedness denominated in a currency
other than Dollars which was not outstanding for the entire Four Quarter Period,
pro forma effect shall be given based on the relevant exchange rates applicable
on the date of any determination of the Consolidated Fixed Charge Coverage Ratio
is being made.
"Consolidated Fixed Charges" shall mean, with respect to any Person
for any period, the sum, without duplication, of (i) Consolidated Interest
Expense for such period, plus (ii) the product of (x) the amount of all dividend
payments on any series of Disqualified Capital Stock of the Borrower and all
Preferred Stock of the Restricted Subsidiaries (other than dividends paid in
Qualified Capital Stock and dividends to the extent payable to the Borrower or
any Wholly Owned Restricted Subsidiary) paid, accrued or scheduled to be paid or
accrued during such period times (y) a fraction, the numerator of which is one
and the denominator of which is one minus the then current effective
consolidated federal, state and local income tax rate of such Person, expressed
as a decimal.
"Consolidated Interest Expense" shall mean, with respect to any
Person for any period, the sum of, without duplication: (i) the aggregate of the
interest expense of such Person and its Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, including without
limitation, (a) any amortization of debt discount, but excluding any
amortization or write-off of deferred financing costs, (b) the net costs under
Interest Swap Obligations, (c) all capitalized interest and (d) the interest
portion of any deferred payment obligation, calculated in accordance with the
effective interest method; and (ii) the interest component of Capitalized Lease
Obligations paid, accrued and/or scheduled to be paid or accrued by such Person
and its Restricted Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP. Consolidated Interest Expense of the
Borrower and its Restricted Subsidiaries shall include interest accrued by the
Parent on the Debentures.
"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 Borrower and its Restricted
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 (or loss for purposes of determining Consolidated EBIT only) of
any other Person (other
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than a consolidated Restricted Subsidiary) in which the Borrower or any
consolidated Restricted Subsidiary has an ownership interest, except to the
extent such net earnings shall have actually been received by the Borrower or
such consolidated Restricted Subsidiary in the form of cash distributions; (c)
any portion of the net earnings of any consolidated Restricted Subsidiary which
is unavailable for payment of dividends to the Borrower or any other
consolidated Restricted Subsidiary by reason of the provisions of any agreement
or applicable law or regulation (including, without limitation, those agreements
referred to in the exceptions set forth in Section 6.04); (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 Restricted Subsidiary
of such Person or is merged into or consolidated with such Person or any of its
Restricted Subsidiaries or that Person's assets are acquired by such Person or
any of its Restricted 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.
"Continuing Directors" shall mean the directors of the Parent on the
Borrowing Date and each other director if such director's nomination for the
election to the Board of Directors of the Parent is recommended by a majority of
the then Continuing Directors.
"Credit Documents" shall mean this Agreement and, after the
execution and delivery thereof pursuant to the terms of this Agreement, each
Note and the Guarantees.
"Credit Party" shall mean the Borrower and each Guarantor.
"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
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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.
"Debentures" shall have the meaning provided in the definition of
Trust Preferred Securities.
"Default" shall mean an event or condition the occurrence of which
is, or with the lapse of time or the giving of notice or both would be, an Event
of Default.
"Disqualified Capital Stock" shall mean with respect to any Person,
any Capital Stock of such Person or its Subsidiaries that, by its terms, by the
terms of any agreement related thereto or by the terms of any security into
which it is convertible, puttable or exchangeable, is, or upon the happening of
any event or the passage of time would be, required to be redeemed or
repurchased by such Person or its Subsidiaries, including at the option of the
holder thereof, in whole or in part, or has, or upon the happening of an event
or passage of time would have, a redemption or similar payment due on or prior
to the Maturity Date, or any other Capital Stock of such Person or its
subsidiaries designated as Disqualified Capital Stock by such Person at the time
of issuance; provided, however, that if such Capital Stock is issued to
employees of the Borrower or the Subsidiaries or to any plan for the benefit of
such employees, such Capital Stock shall not constitute Disqualified Capital
Stock unless so designated.
"DNE Systems" shall mean DNE Systems, Inc., a Delaware corporation.
"Documents" shall mean the Credit Documents, the Senior Secured
Credit Documents and the Acquisition Documents.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Domestic Subsidiary" shall mean each Restricted Subsidiary of the
Borrower incorporated or organized in the United States or any State or
territory thereof.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or any other "accredited investor" (as defined in
Regulation D of the Securities Act).
"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
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violation or liability (or alleged violation or liability) by the Parent, the
Borrower, Essex or any of their respective Subsidiaries under any Environmental
Law (hereafter "Claims") or any permit, license or other authorization issued to
the Parent, the Borrower, Essex 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 references to ERISA are to ERISA as in effect
at the date of this 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 Borrower 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, 1998, between Essex Canada 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.
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"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 and a wholly owned subsidiary of Essex.
"Essex Funding Agreement" shall mean (i) the Loan and Security
Agreement, dated as of April 29, 1998, between Essex Funding and Three Rivers
Funding Corporation and (ii) the related Sales and Servicing Agreement dated as
of April 29, 1998.
"Essex International" shall mean Essex International Inc., a
Delaware corporation.
"Event of Default" shall have the meaning provided in Section 7.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.
"Existing Indebtedness" shall mean Indebtedness of the Borrower and
its Subsidiaries as of the 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 and the loans being made under the Senior Secured Credit
Agreement on the Borrowing Date, all as set forth on Schedule V, and other
Indebtedness which in the aggregate does not exceed $100,000.
"Existing Superior Credit Agreement" shall mean the Revolving Credit
Agreement dated as of October 2, 1996, as the same may have previously been
amended, modified or supplemented, among the Parent, the Subsidiary Guarantors
named therein, the lending institutions listed therein, Bankers Trust Company,
as Administrative Agent, and Bank of Boston Connecticut, as Documentation Agent.
"fair market value" shall mean, with respect to any asset or
property, the price which could be negotiated in an arm's-length, free market
transaction, for cash, between a willing seller and a willing and able buyer,
neither of whom is under undue pressure or compulsion to complete the
transaction. Fair market value shall be determined by the Board of Directors of
the Borrower acting reasonably and in good faith and shall be evidenced by a
Board Resolution of the Board of Directors of the Borrower delivered to the
Administrative Agent.
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"Fair Share Shortfall" shall have the meaning provided in Section
12.01(c) of this Agreement.
"Fair Share" shall have the meaning provided in Section 12.01(c) of
this 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.
"Foreign Subsidiary" shall mean a Restricted Subsidiary that is not
a Domestic Subsidiary.
"Four Quarter Period" shall have the meaning provided in the
definition of "Consolidated Fixed Charge Coverage Ratio."
"Funding Guarantor" shall have the meaning provided in Section
12.01(c) of this 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 Sections 2.02
and 6, including defined terms as used therein, are subject (to the extent
provided therein) to Section 11.07(a).
"Guaranteed Creditors" shall mean and include each of the
Administrative Agent and the Lenders.
"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 Borrower to each Lender, and
Loans made under this Agreement, 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 Borrower or any
Guarantor to such Lender and the Administrative 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 Borrower.
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"Guarantee" shall mean the Guarantee provided in Section 12.
"Guarantor" shall mean each of the Parent and the Subsidiary
Guarantors.
"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.
"incur" shall mean, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (including by conversion,
exchange or otherwise), assume, guarantee or otherwise become liable in respect
of such Indebtedness or other obligation or the recording, as required pursuant
to GAAP or otherwise, of any such Indebtedness or other obligation on the
balance sheet of such Person (and "incurrence," "incurred" and "incurring" shall
have meanings correlative to the foregoing). Indebtedness of a Person existing
at the time such Person becomes a Restricted Subsidiary or is merged or
consolidated with or into the Borrower or any Restricted Subsidiary shall be
deemed to be incurred at such time. The accrual of interest or the accretion of
original issue discount shall not be deemed to be an incurrence.
"Indebtedness" shall mean, with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed money, (ii) all
indebtedness of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all Capitalized Lease Obligations of such Person,
(iv) all indebtedness of such Person issued or assumed as the deferred purchase
price of property or services (but excluding trade accounts payable, other
accrued liabilities arising and payable in the ordinary course of business and
deferred rent as determined in accordance with GAAP), (v) all indebtedness for
the reimbursement of any obligor on any banker's acceptance or similar credit
transaction, (vi) the face amount of all letters of credit issued for the
account of such Person and, without duplication, all drafts drawn thereunder,
(vii) guarantees and other contingent obligations in respect of indebtedness
referred to in clauses (i) through (vi) above and clause (ix) below, (viii) all
indebtedness of any other Person of the type referred to in clauses (i) through
(vii) which are secured by any lien on any property or asset of such Person, the
amount of such indebtedness being deemed to be the lesser of the fair market
value of such property or asset or the amount of the indebtedness so secured,
(ix) all indebtedness under Interest Rate Protection Agreements and Other
Hedging Agreements of such Person and (x) all Disqualified Capital
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Stock issued by such Person with the amount of indebtedness represented by such
Disqualified Capital Stock being equal to the greater of its voluntary or
involuntary liquidation preference and its maximum fixed repurchase price, but
excluding accrued dividends, if any, and all Preferred Stock of Restricted
Subsidiaries. For purposes hereof, the "maximum fixed repurchase price" of any
Disqualified Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock as if
such Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Agreement, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the Board of Directors of the issuer of such Disqualified Capital
Stock. The Trust Preferred Securities shall constitute Indebtedness of the
Parent.
"Independent Financial Advisor" means a firm which, in the judgment
of the Board of Directors of the Borrower, is independent and qualified to
perform the task for which it is to be engaged.
"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
Borrower, Essex 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, the Borrower, Essex or any of
their respective Subsidiaries' conduct of their business.
"Interest Determination Date" shall mean, with respect to an
Interest Period, the second Business Day preceding the first day of such
Interest Period.
"Interest Payment Date" shall mean May 31, August 30, November 30
and February 28 of each year, commencing May 31, 1999.
"Interest Period" shall mean the period commencing on and including
the immediately preceding Interest Payment Date (or in the case of the first
Interest Period, commencing on the Closing Date) and ending on and including the
second succeeding Interest Payment Date; provided, however, that (i) if any
Interest Period relating to a LIBOR Loan begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period, such Interest Period shall end on the last Business Day of such calendar
month; (ii) if any Interest Period would otherwise expire on a day which is not
a Business Day, such Interest Period shall expire on the next succeeding
Business Day; provided that if any Interest Period for a LIBOR Loan would
otherwise expire on a day which is not a Business Day but is a day of the month
after which no further Business Day occurs in such month, such Interest Period
shall expire on the next preceding Business
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Day; and (iii) no Interest Period in respect of any LIBOR Loan shall extend
beyond the Maturity Date; provided, further that the Interest Period for all
Loans from the Borrowing Date until the earlier of (x) the 60th day after the
Borrowing Date or (y) the determination by the Administrative Agent that the
Syndication Date has occurred shall be seven days.
"Interest Rate" shall mean, for the first six (6) months after the
Borrowing Date, LIBOR plus 4.25%, and if LIBOR rate loans are not available (as
provided in Section 1.07 hereof), the Alternate Base Rate plus 3.25%. Upon the
six (6) month anniversary of the Borrowing Date, the Interest Rate shall
increase by 0.25% so that the Interest Rate shall be LIBOR plus 4.50% and if
LIBOR rate loans are not available (as provided in Section 1.07 hereof), the
Alternate Base Rate plus 3.50%. Upon the twelve (12) month anniversary of the
Borrowing Date, the Interest Rate shall increase by 0.50% so that the Interest
Rate shall be LIBOR plus 5.00% and if LIBOR rate loans are not available (as
provided in Section 1.07 hereof), the Alternate Base Rate plus 4.00%. After the
Interest Rate increase on the twelve (12) month anniversary of the Borrowing
Date, the Interest Rate will increase at the end of each three-month period
thereafter by 0.25%, but the maximum Interest Rate shall be LIBOR plus 5.50% and
if LIBOR rate loans are not available (as provided in Section 1.07 hereof), the
Alternate Base Rate plus 4.50%.
"Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, interest cap agreement, interest rate collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.
"Investments" shall mean, with respect to any Person, any direct or
indirect loan or other extension of credit (including, without limitation, a
guarantee) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any Person. "Investment" shall exclude (i) extensions of trade credit
by the Borrower and its Restricted Subsidiaries in the ordinary course of
business and (ii) loans and advances to employees and officers of the Borrower
and its Restricted Subsidiaries in the ordinary course of business for bona fide
business purposes (it being understood that the purchase of Capital Stock shall
not be deemed to occur in the ordinary course of business for purposes of this
clause). For the purposes of Section 6.02, (i) "Investment" shall include and be
valued at the fair market value of the net assets of any Restricted Subsidiary
at the time that such Restricted Subsidiary is designated an Unrestricted
Subsidiary and (ii) the amount of any Investment shall be the original cost of
such Investment plus the cost of all additional Investments by the Borrower or
any of its Restricted Subsidiaries, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment, reduced by the payment of dividends or distributions in connection
with such Investment or any other amounts received in respect of
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such Investment; provided that no such payment of dividends or distributions or
receipt of any such other amounts (i) shall reduce the amount of any Investment
to the extent that payment of dividends or distributions or receipt of any such
amounts would be included in the Basket or (ii) shall reduce the amount of any
Investment below the initial amount of such Investment included as a Restricted
Payment. If the Borrower or any Restricted Subsidiary sells or otherwise
disposes of any Common Stock of any direct or indirect Wholly Owned Restricted
Subsidiary that is a Guarantor such that, after giving effect to any such sale
or disposition, such Restricted Subsidiary is no longer a Wholly Owned
Restricted Subsidiary that is a Guarantor, the Borrower shall be deemed to have
made an Investment on the date of any such sale or disposition equal to the fair
market value of the Common Stock of such Restricted Subsidiary not sold or
disposed of.
"Israeli Subsidiaries" shall mean Superior Cable Israel Ltd., Cables
of Zion and their respective Subsidiaries.
"Leaseholds" of any Person shall mean all 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 mean each financial institution listed on Schedule I,
as well as any Person which becomes a "Lender" hereunder pursuant to Section
11.04(b).
"LIBOR" shall mean, with respect to an Interest Period, (i) the rate
(expressed as a percentage per annum) for deposits in United States dollars for
a six-month period (if such Interest Period is for six months) or a seven-day
period (if such Interest Period is for seven days), as applicable, beginning on
the second London Banking Day after the Interest Determination Date that appears
on Telerate Page 3750 as of 11:00 a.m., London time, on the Interest
Determination Date; if Telerate Page 3750 does not include such a rate or is
unavailable on an Interest Determination Date, LIBOR for the Interest Period
shall be the arithmetic mean of the rates (expressed as a percentage per annum)
for deposits in a Representative Amount in United States dollars for a six-month
period (if such Interest Period is for six months) or a seven-day period (if
such Interest Period is for seven days), as applicable, beginning on the second
London Banking Day after the Interest Determination Date that appears on Reuters
Screen LIBO Page (as defined) as of 11:00 a.m., London time, on the Interest
Determination Date; if Reuters Screen LIBO Page does not include two or more
rates or is unavailable on an Interest Determination Date, the Administrative
Agent will request the principal London office of each of four major banks in
the London interbank market, as selected by the Administrative Agent, to provide
such bank's offered quotation (expressed as a percentage per annum), as of
approximately 11:00 a.m., London time, on such Interest Determination Date, to
prime banks in the London interbank market for deposits in a Representative
Amount in United States dollars for a six-month period (if such Interest Period
is for six months) or a seven-day period (if such Interest Period is for
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seven days), as applicable, beginning on the second London Banking Day after the
Interest Determination Date; if at least two such offered quotations are so
provided, LIBOR for the Interest Period will be the arithmetic mean of such
quotations; if fewer than two such quotations are so provided, the
Administrative Agent will request each of three major banks in New York City, as
selected by the Administrative Agent, to provide such bank's rate (expressed as
a percentage per annum), as of approximately 11:00 a.m., New York City time, on
such Interest Determination Date, for loans in a Representative Amount in United
States dollars to leading European banks for a six-month period (if such
Interest Period is for six months) or a seven-day period (if such Interest
Period is for seven days), as applicable, beginning on the second London Banking
Day after the Interest Determination Date; if at least two such rates are so
provided, LIBOR for the Interest Period will be the arithmetic mean of such
rates; if fewer than two such rates are so provided, then LIBOR for the Interest
Period will be LIBOR in effect with respect to the immediately preceding
Interest Period, in each case 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).
"LIBOR Loan" shall mean a Loan for which the Interest Rate on such
Loan is based on LIBOR.
"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 the senior subordinated term loans made on the
Borrowing Date pursuant to this Agreement. All references to "Loan" or "Loans"
shall mean Loans and both Types of Loans, i.e. the LIBOR Loan and the Alternate
Base Rate Loan.
"London Banking Day" shall mean any day in which dealings in United
States dollars are transacted or, with respect to any future date, are expected
to be transacted in the London interbank market.
"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 Borrowing Date, of the Bor-
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rower and its Subsidiaries, the Parent 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 Borrower 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 them hereunder or under any other Credit Document.
"Maturity Date" shall mean November 27, 2006.
"Maximum Number" shall have the meaning provided in the definition
of "Tender Offer."
"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 International are accepted in the
Tender Offer, any of the Tender Offer Cash Consideration not paid.
"Merger Agreement" shall mean the Agreement and Plan of Merger,
dated as of October 21, 1998 among the Parent, Acquisition Co and Essex
International pursuant to which the Parent will acquire 100% of the equity
securities of Essex International.
"Mexican Subsidiaries" shall mean any Wholly Owned Restricted
Subsidiary of the Borrower, Essex or any of their respective Subsidiaries
organized under the laws of Mexico in order to make the investments contemplated
by Section 6.02(b)(7).
"Minimum Condition" shall have the meaning provided in the
definition of "Tender Offer."
"Moody's" shall mean Moody's Investors Service, Inc.
"Net Cash Proceeds" shall mean, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when actually received in the form of cash or
Cash Equivalents (other than the portion of any such deferred payment
constituting interest) received by the Borrower or any of its Restricted
Subsidiaries from such Asset Sale net of (a) reasonable out-of-pocket expenses
and fees relating to such Asset Sale (including, without limitation, legal,
accounting and investment banking fees and sales commissions), (b) taxes paid or
payable after taking into account any reduction in consolidated tax liability
due to available tax credits or deductions and any tax sharing arrangements, (c)
repayment of Indebtedness that is required to be repaid in connection with such
Asset Sale and (d) appropriate amounts to
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be provided by the Borrower or any Restricted Subsidiary, as the case may be, as
a reserve, in accordance with GAAP, against any liabilities associated with such
Asset Sale and retained by the Borrower or any Restricted Subsidiary, as the
case may be, after such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale; provided, however, that any amounts remaining after
adjustments, revaluations or liquidations of such reserves shall constitute Net
Cash Proceeds.
"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 Borrower, Essex or any one or more of their respective Subsidiaries
primarily for the benefit of employees of the Parent, the Borrower, 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 Borrower,
Essex or any of their respective Subsidiaries may have any liability.
"Note" shall have the meaning provided in Section 1.04.
"Notice of Voluntary Prepayment" shall have the meaning provided in
Section 2.01(a).
"Notice Office" shall mean the office of the Administrative Agent
located at One Bankers Trust Plaza, New York, New York 10006, or such other
office as the Administrative Agent may hereafter designate in writing as such to
the other parties hereto.
"Obligations" shall mean all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness.
"Offer to Purchase" shall mean the offer to purchase for cash up to
22,562,135 shares of common stock of Essex International at $32.00 net per share
by Acquisition Co dated as of October 28, 1998.
"Officers' Certificate" shall mean a certificate, signed by the
chairman, a vice chairman, the president, or any vice president of a Credit
Party, and attested to by the secretary or any assistant secretary of such
Credit Party.
"Other Hedging Agreements" shall mean (x) any foreign exchange
contracts, currency swap agreements or other similar agreements or arrangements
designed to protect
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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.
"Parent" shall have the meaning provided in the first paragraph to
this Agreement.
"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 Borrower and its Subsidiaries dated as of October 2,
1996, effective as of May 1, 1996.
"Payment Office" shall mean the office of the Administrative Agent
located at One Bankers Trust Plaza, New York, New York 10006, or such other
office as the Agent may hereafter designate in writing as such to the other
parties hereto.
"PBGC" shall mean the Pension Benefit Guarantee Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" shall mean a fraction (expressed as a percentage), the
numerator of which is the Commitment of such Lender and the denominator of which
is the Borrowing Amount.
"Permitted Investments" shall mean (i) Investments by the Borrower
or any Restricted Subsidiary in any Person that is or will become immediately
after such Investment a Wholly Owned Restricted Subsidiary that is a Guarantor
or that will merge or consolidate into the Borrower or a Wholly Owned Restricted
Subsidiary that is a Guarantor; (ii) Investments in the Borrower or any
Guarantor by any Restricted Subsidiary; (iii) Investments by the Borrower or any
Restricted Subsidiary in any Guarantor; (iv) Investments in cash and Cash
Equivalents; provided that any such Investments (including in cash) (other than
Investments denominated in Dollars) shall only be made to the extent necessary
to fund the local operations of the Foreign Subsidiaries; (v) Interest Rate
Protection Agreements and Other Hedging Agreements entered into in the ordinary
course of the Borrower's or its Restricted Subsidiaries' businesses and
otherwise in compliance with this Agreement; (vi) Investments in securities of
trade creditors or customers received pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of such trade creditors or
customers or in good faith settlement or delinquent obligations and disputes
with trade creditors or customers; (vii) Investments made by the Borrower or its
Restricted Subsidiaries as a result of consideration received in connection with
an Asset Sale made in compliance with Section 6.03; (viii) guarantees of
Indebtedness
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and other obligations otherwise permitted under this Agreement; and (ix)
Investments identified in Schedule VIII existing on the Closing Date.
"Permitted Liens" shall mean (i) statutory Liens of landlords and
carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or other
like Liens arising in the ordinary course of business, deposits made to obtain
the release of such Liens, and with respect to amounts not yet delinquent for a
period of more than 60 days or being contested in good faith by an appropriate
process of law, and for which a reserve or other appropriate provision, if any,
as shall be required by GAAP shall have been made; (ii) Liens incurred or
pledges or deposits made in the ordinary course of business to secure
obligations under workers' compensation, unemployment insurance and other types
of social security or similar legislation; (iii) Liens incurred or deposits made
to secure the performance of tenders, bids, leases, statutory obligations,
surety and appeal bonds, governmental contracts, performance and return of money
bonds and other obligations of a like nature incurred in the ordinary course of
business (exclusive of obligations for the payment of borrowed money); (iv)
Liens upon specific items of inventory or other goods and proceeds of any Person
securing such Person's obligations in respect of bankers' acceptances issued or
created for the account of such Person to facilitate the purchase, shipment or
storage of such inventory or other goods in the ordinary course of business; (v)
Liens securing reimbursement obligations with respect to letters of credit which
encumber documents and other property relating to such letters of credit and the
products and proceeds thereof; (vi) Liens encumbering customary initial deposits
and margin deposits, and other Liens incurred in the ordinary course of business
that are within the general parameters customary in the industry, in each case
securing Indebtedness under Interest Rate Protection Agreements and forward
contracts, option futures contracts, futures options or similar agreements or
arrangements designed to protect the Borrower or any Restricted Subsidiary from
fluctuations in the price of commodities; (vii) Liens encumbering deposits made
in the ordinary course of business to secure nondelinquent obligations arising
from statutory, regulatory, contractual or warranty requirements of the Borrower
or the Restricted Subsidiaries for which a reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made; (viii)
Liens arising out of consignment or similar arrangements for the sale of goods
entered into by the Borrower or any Restricted Subsidiary in the ordinary course
of business in accordance with past practices; (ix) any interest or title of a
lessor in the property subject to any lease, whether characterized as
capitalized or operating other than any such interest or title resulting from or
arising out of a default by the Borrower or any Restricted Subsidiary of its
obligations under such lease; (x) Liens arising from filing UCC financing
statements for precautionary purposes in connection with true leases of personal
property that are otherwise permitted under this Agreement and under which the
Borrower or any Restricted Subsidiary is lessee; (xi) Liens securing Purchase
Money Obligations incurred pursuant to Section 6.01(ix) and other purchase money
or similar liens incurred in the ordinary course of business and consistent with
past practice; (xii) Liens in favor of the Administrative
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Agent; (xiii) Liens on the receivables subject to the Receivables Financing
Agreement and Receivables Related Assets, in each case securing the Receivables
Financing Agreement; (xiv) Liens set forth on Schedule X securing Indebtedness
of Essex or any of its Subsidiaries pursuant to the Essex Capital Lease
Facility; (xv) Liens on assets of Essex Canada securing the Essex Canadian
Facility and any permitted refinancing thereof; and (xvi) Liens on the assets of
the Mexican Subsidiaries to secure Indebtedness permitted under Section
6.01(xiv).
"Permitted Refinancing" shall mean with respect to any Person,
Indebtedness of such Person issued in exchange for, or the proceeds from the
issuance and sale or disbursement of which are used to substantially
concurrently repay, redeem, refund, refinance, discharge or otherwise retire for
value, in whole or in part (collectively, "repay"), or constituting an
amendment, modification or supplement to, or a deferral or renewal of
(collectively, an "amendment"), any Indebtedness of such Person incurred in
accordance with this Agreement (a) in a principal amount (or, if such Permitted
Refinancing provides for an amount less than the principal amount thereof to be
due and payable upon the acceleration thereof, with an original issue price) not
in excess of (without duplication) (i) the principal amount or the original
issue price, as the case may be, of the Indebtedness so refinanced (or, if such
Permitted Refinancing refinances Indebtedness under a revolving credit facility
or other agreement providing a commitment for subsequent borrowings, with a
maximum commitment not to exceed the maximum commitment under such revolving
credit facility or other agreement) plus (ii) unpaid accrued interest on such
Indebtedness plus (iii) premiums, penalties, fees and expenses actually incurred
by such Person in connection with the repayment or amendment thereof and (b)
with respect to Permitted Refinancing that repays or constitutes an amendment to
Subordinated Indebtedness, such Refinancing Indebtedness (x) shall not have any
fixed mandatory redemption or sinking fund requirement in an amount greater than
or at a time prior to the amounts and times specified in such repaid or amended
Subordinated Indebtedness, except to the extent that any such requirement
applies on a date after the Maturity Date and (y) shall contain subordination
and default provisions no less favorable in any material respect to the Lenders
than those contained in such repaid or amended Subordinated Indebtedness.
"Person" shall mean an individual, partnership, limited liability
corporation, corporation, unincorporated organization, trust or joint venture,
or a governmental agency or political subdivision 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 Borrower, any of its
Subsidiaries or any ERISA Affiliate and each such plan for the five calendar
year period immediately following the latest date on which the Borrower, any of
its Subsidiaries or any ERISA Affiliate maintained, contrib-
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uted to or had an obligation to contribute to such plan or any such plan as to
which the Borrower, any of its Subsidiaries or any ERISA Affiliate may have any
liability; provided, however, the term "Plan" shall not include any Non-U.S.
Pension Plan.
"Preferred Stock" of any Person shall mean any Capital Stock of such
Person that has preferential rights to any other Capital Stock of such Person
with respect to dividends or redemptions or upon liquidation.
"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.
"Projections" shall mean the financial projections dated November
10, 1998 which include the projected consolidated and consolidating results of
the Parent and its Subsidiaries (including Essex) for at least the five fiscal
years ended after the Borrowing Date.
"Purchase Money Indebtedness" shall mean Indebtedness of the
Borrower and its Restricted Subsidiaries incurred in the normal course of
business for the purpose of financing all or any part of the purchase price, or
the cost of installation, construction or improvement, of property or equipment;
provided, however, (A) the Indebtedness shall not exceed the cost of such
property or assets and shall not be secured by any property or assets of the
Borrower or any Restricted Subsidiary other than the property and assets so
acquired or constructed and (B) any Lien securing such Indebtedness shall be
created within 360 days of such acquisition or construction or, in the case of a
refinancing of any Purchase Money Indebtedness, within 360 days of such
refinancing.
"Qualified Capital Stock" shall mean any Capital Stock that is not
Disqualified Capital Stock.
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, buildings, improvements and fixtures,
including Leaseholds.
"Receivables Financing Agreement" shall mean (i) the Essex Funding
Agreement and any amendments or refinancings thereof; 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
advance rates, discounts and other pricing terms shall be no more adverse to the
Borrower and its Subsidiaries than those governing similar facilities for
similar credits, but in no case shall such in the aggregate result in proceeds
therefrom being less than 75% of the book value (or, if greater, the fair market
value)
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of such receivables and Receivables Related Assets, (y) neither the Borrower 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 and (z)
in the case of amendments and refinancings of the Essex Funding Agreement, the
terms thereof are no more adverse to the Borrower and its Subsidiaries than the
terms of such Agreement, as in effect on the Initial Borrowing Date, except as
specifically permitted by clause (x) of this proviso.
"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 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 Restricted Subsidiary of the
Borrower (a) that is designated (as set forth below) as a "Receivables
Subsidiary" by the Board of Directors of the Borrower, (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) of which under such Receivables Financing Agreement
(i) is guaranteed by the Borrower or any other Restricted Subsidiary of the
Borrower, (ii) is recourse to or obligates the Borrower or any other Restricted
Subsidiary of the Borrower 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 Borrower or any other Restricted
Subsidiary of the Borrower, 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 with such a Receivables Financing Agreement, (d) with which neither
the Borrower nor any other Restricted Subsidiary of the Borrower has any
material contract, agreement, arrangement or understanding and (e) with respect
to which neither the Borrower nor any other Restricted Subsidiary of the
Borrower 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 Borrower shall be
evidenced by filing with the Administrative Agent a certified copy of the
resolutions of the Board of Directors of the Borrower giving effect to such
designation and a certificate of the chief financial officer of the Borrower or
other Authorized Officer of the Borrower certifying that such designation
complied with the foregoing conditions.
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"redeem" means redeem, repurchase, defease or otherwise acquire or
retire for value; and "redemption" and "redeemed" have correlative meanings.
"refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "refinanced" and "refinancing"
shall have correlative meanings.
"Refinancing" shall mean, at the closing of the Acquisition, (i) the
refinancing of the Existing Superior Credit Agreement by the Parent and (ii) the
refinancing of all obligations (not to exceed $280,000,000) outstanding under
the Essex Credit Agreements by Essex.
"Register" shall have the meaning provided in Section 11.15.
"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 Reserve System as from time to time in effect and any successor to
all or a 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 a 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 a 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 1.10.
"Replacement Assets" shall have the meaning provided in Section
2.02(a).
"Replacement Lender" shall have the meaning provided in Section
1.10.
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"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.
"Representative" means the indenture trustee or other trustee, agent
or representative in respect of any Senior Indebtedness; provided that if, and
for so long as, any Senior Indebtedness lacks such a representative, then the
Representative for such Senior Indebtedness shall at all times constitute the
holders of a majority in outstanding principal amount of such Senior
Indebtedness in respect of any Senior Indebtedness.
"Representative Amount" shall mean a principal amount of not less
than U.S. $1,000,000 for a single transaction in the relevant market at the
relevant time.
"Required Lenders" shall mean Lenders the sum of whose outstanding
Loans (or, if prior to the Borrowing Date, Commitments) represent an amount
greater than 50% of the sum of all outstanding Loans (or, if prior to the
Borrowing Date, the Total Commitment).
"Restricted Payment" shall have the meaning provided in Section
6.02(a).
"Restricted Subsidiary" shall mean any Subsidiary of the Borrower
which at the time of determination is not an Unrestricted Subsidiary.
"Reuters Screen LIBO Page" shall mean the display designated as page
"LIBO" on the Reuters Monitor Money Rates Service (or such other page as may
replace the LIBO page on that service).
"S&P" shall mean Standard & Poor's Ratings Services.
"SEC" shall mean the Securities and Exchange Commission and any
successor thereto.
"Section 2.06(b)(ii) Certificate" shall have the meaning provided in
Section 2.06(b)(ii).
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
"Senior Indebtedness" shall mean, with respect to the Borrower or
any Guarantor, the principal of, premium, if any, and interest (including any
interest accruing subse-
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quent to the filing of a petition of bankruptcy at the rate provided for in the
documentation with respect thereto, whether or not such interest is an allowed
claim under applicable law) on any Indebtedness (including guarantees) of the
Borrower or such Guarantor, whether outstanding on the Borrowing Date or
thereafter created, incurred or assumed, in each case as permitted hereunder
pursuant to clause (ii) or subclause (x) of clause (viii) (only to the extent
relating to Indebtedness incurred under the Senior Secured Credit Agreement) or
clause (xvi) (so long as such additional Indebtedness is incurred under the
Senior Secured Credit Agreement) of Section 6.01, unless, in the case of any
particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Loans or the
Guarantee of such Guarantor. Notwithstanding the foregoing, "Senior
Indebtedness" shall not include (i) any Indebtedness of the Borrower or such
Guarantor to a Restricted Subsidiary of the Borrower, (ii) Indebtedness to, or
guaranteed on behalf of, any employee of the Borrower or such Guarantor or any
Subsidiary of the Borrower or such Guarantor (including, without limitation,
amounts owed for compensation), (iii) obligations for goods, materials or
services purchased in the ordinary course of business or obligations consisting
of trade payables, (iv) Indebtedness represented by Disqualified Capital Stock,
(v) any liability for federal, state, local or other taxes owed or owing by the
Borrower or such Guarantor, (vi) that portion of any Indebtedness to the extent
incurred in violation of the provisions set forth under Section 6.01 (but, as to
any such obligation, no such violation shall be deemed to exist for purposes of
this clause (vi) if the holder(s) of such obligation or their representative and
the Administrative Agent shall have received an Officers' Certificate of the
Borrower to the effect that the incurrence of such Indebtedness does not (or, in
the case of revolving credit Indebtedness, that the incurrence of the entire
committed amount thereof at the date on which the initial borrowing thereunder
is made would not) violate such provisions of this Agreement), (vii)
Indebtedness which, when incurred and without respect to any election under
Section 1111(b) of Title 11, United States Code, is without recourse to the
Borrower, (viii) any Indebtedness which is, by its express terms, subordinated
in right of payment to any other Indebtedness of the Borrower or such Guarantor
and (ix) Indebtedness incurred to repurchase capital stock of the Borrower from
employees or former employees.
"Senior Secured Credit Agreement" means the Amended and Restated
Credit Agreement dated as of November 27, 1998, among the Borrower, Essex Group,
Inc., the guarantors named therein, the lenders party thereto in their
capacities as lenders thereunder, Bankers Trust Company, as administrative
agent, Merrill Lynch & Co., as documentation agent, and Fleet National Bank, as
syndication agent, together with the related documents thereto (including,
without limitation, any guarantee agreements and security documents), in each
case as such agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring
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(including increasing the amount of available borrowings thereunder or adding
Restricted Subsidiaries of the Borrower as additional borrowers or guarantors
thereunder to the extent permitted hereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders.
"Senior Secured Credit Documents" shall mean and include each of the
documents and other agreements (including, without limitation, the Senior
Secured Credit Agreement) governing or evidencing the Senior Secured Credit
Loans, as in effect on the Borrowing Date and as the same may be amended,
modified or supplemented from time to time pursuant to the terms thereof.
"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.
"Significant Subsidiary," with respect to any Person, means any
Restricted Subsidiary of such Person that satisfies the criteria for a
"significant subsidiary" set forth in Rule 1.02(w) of Regulation S-X under the
Securities Act.
"Subordinated Indebtedness" means Indebtedness of the Borrower or
any Restricted Subsidiary that is expressly subordinated in right of payment to
the Loans or the Guarantee of such Restricted Subsidiary.
"Subsidiary," with respect to any Person, means (i) any corporation
of which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person or (ii) any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person; in
the case of the Borrower, a Subsidiary of the Borrower shall include, at any
time after the consummation of the Tender Offer, Essex and its Subsidiaries.
Unless the context otherwise requires, references herein to a Subsidiary shall
refer to a Subsidiary of the Borrower.
"Subsidiary Guarantor" shall mean (i) each of the Borrower's
Domestic Subsidiaries existing on the Borrowing Date other than its Unrestricted
Subsidiaries, Essex Funding, any Receivables Subsidiary and Essex Canada, (ii)
DNE Systems and each of its Subsidiaries, (iii) each of the Borrower's Domestic
Subsidiaries that in the future executes an amendment to this Agreement in which
such Domestic Subsidiary agrees to be bound by the terms of this Agreement as a
Subsidiary Guarantor pursuant to Section 6.09 and (iv) any other Subsidiary
which guarantees the Senior Secured Credit Agreement; provided that any Person
constituting a Subsidiary Guarantor as described above shall cease to constitute
a
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Subsidiary Guarantor when its respective Subsidiary Guarantee is released in
accordance with the terms of this Agreement.
"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 Parent
preferred stock issued in exchange therefor pursuant to clause (b)(3) of Section
6.02).
"Superior Telecommunications" shall mean Superior Telecommunications
Inc., a Georgia corporation and a wholly owned Subsidiary of the Borrower.
"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.
"Syndication Agent" shall mean Fleet Corporate Finance, Inc., and
any successor corporation thereto by merger or otherwise.
"Syndication Date" shall mean that date upon which the
Administrative Agent determines (and notifies the Borrower and the Lenders) that
the primary syndication (and resultant addition of Persons as Lenders pursuant
to Section 11.04(b)) has been completed.
"Taxes" shall have the meaning provided in Section 2.06(a).
"Telerate Page 3750" shall mean the display designated as "Page
3750" on the Dow Jones Telerate Service (or such other page as may replace Page
3750 on that service).
"Tender Offer" shall mean the tender offer by Acquisition Co for no
less than a majority (the "Minimum Condition"), and no more than 22,562,135 (the
"Maximum Number") shares, of Essex International's outstanding common stock.
"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.
"Total Commitment" shall mean, at any time, the sum of the
Commitments of each of the Lenders.
"Transaction" shall mean, collectively, (i) the consummation of the
Acquisition, (ii) the incurrence of the loans under the Senior Secured Credit
Agreement, (iii) the
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consummation of the Refinancing, (iv) the entering into of the Credit Documents
and the incurrence of all Loans on the Borrowing Date, (v) the consummation of
the Merger and (vi) the payment of fees and expenses in connection with the
foregoing.
"Transaction Date" shall have the meaning provided in the definition
of "Consolidated Fixed Charge Coverage Ratio."
"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 Parent
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 "Debentures"); and (iii) shall include the
guarantee by the Parent of dividend, redemption and liquidation payments as in
effect on the Borrowing Date, all substantially in the form of Exhibit G hereto,
with such modifications consistent with the substantive provisions thereof, as
to which the Administrative Agent may agree, such agreement not to be
unreasonably withheld or delayed. The Guarantee of the Parent shall be pari
passu with the Debentures and the guarantee referred to in clause (iii) of the
preceding sentence.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a LIBOR
Loan.
"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.
"United States" and "U.S." shall each mean the United States of
America.
"Unrestricted Subsidiary" of any Person shall mean (i) any
Subsidiary of such Person that at the time of determination shall be or continue
to be designated an Unrestricted Subsidiary by the Board of Directors of such
Person in the manner provided in clause (iii) below; (ii) any Subsidiary of an
Unrestricted Subsidiary; and (iii) any Subsidiary of the Borrower designated as
such pursuant to Section 6.10. On the Borrowing Date, the Borrower shall have no
Unrestricted Subsidiaries other than the Israeli Subsidiaries.
"Weighted Average Life to Maturity" shall mean, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the prod-
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ucts obtained by multiplying (i) the amount of each then remaining installment,
sinking fund, serial maturity or other required payment of principal, including
payment at final maturity, in respect thereof, by (ii) the number of years
(calculated to the nearest one-twelfth) which will elapse between such date and
the making of such payment.
"Wholly Owned Restricted Subsidiary" of any Person shall mean any
Restricted Subsidiary of such Person of which all the outstanding voting
securities (other than in the case of a foreign Restricted Subsidiary,
directors' qualifying shares or an immaterial amount of shares required to be
owned by other Persons pursuant to applicable law) are owned by such Person or
any Wholly Owned Restricted Subsidiary of such Person.
"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.
10. THE AGENTS.
10.01. Appointment. Each Lender hereby irrevocably designates and
appoints BTCo as Administrative Agent of such Lender to act as specified herein
and in the other Credit Documents, and each such Lender hereby irrevocably
authorizes BTCo as the Administrative Agent to take such action on its behalf
under the provisions of the Credit Documents and to exercise such powers and
perform such duties as are expressly delegated to the Administrative Agent by
the terms of the Credit Documents, together with such other powers as are
reasonably incidental thereto. The Administrative Agent agrees to act as such
upon the express conditions contained in this Section 10. Notwithstanding any
provision to the contrary elsewhere in any Credit Document, no Agent shall have
any duties or responsibilities, except those expressly set forth in the Credit
Documents, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise (including by operation of law) to
exist against any Agent. The provisions of this Section 10 are solely for the
benefit of the Agents and the Lenders, and neither the Parent, the Borrower,
Essex nor any of their respective Subsidiaries or Affiliates shall have any
rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agents shall act
solely as agents of the Lenders and the Agents do not assume and shall not be
deemed to have assumed any obligation or relationship of agency or
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trust with or for the Parent, the Borrower or any of their respective
Subsidiaries (including Essex) or Affiliates.
10.02. Delegation of Duties. The Agents may execute any of their
duties under or any Credit Document by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Agents shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by them with reasonable
care except to the extent otherwise required by Section 10.03.
10.03. Exculpatory Provisions. No Agent or any of its Affiliates or
any of their officers, directors, employees, agents or attorneys-in-fact shall
be (i) liable for any action lawfully taken or omitted to be taken by it or such
Person in its capacity as an Agent under or in connection with any Credit
Document (except to the extent found to have resulted from such Person's own
gross negligence or willful misconduct) or (ii) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties made
by the Parent, the Borrower, Essex, any of their respective Subsidiaries or any
of their respective officers contained in any Credit Document, any other
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by any Agent under or in connection with, any
Document or for any failure of the Parent, the Borrower, Essex or any of their
respective Subsidiaries or any of their respective officers to perform its
obligations hereunder or thereunder. No Agent shall be under any obligation to
any Lender to ascertain or to inquire as to the observance or performance of any
of the agreements contained in, or condition of, any Document, or to inspect the
properties, books or records of the Parent, the Borrower, Essex or any of their
respective Subsidiaries. No Agent shall be responsible to any Lender for the
effectiveness, genuineness, validity, enforceability, collectability or
sufficiency of any Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statement or in
any financial or other statements, instruments, reports, certificates or any
other documents in connection herewith or therewith furnished or made by any
Agent to the Lenders or by or on behalf of the Parent, the Borrower, Essex or
any of their respective Subsidiaries to any Agent or any Lender or be required
to ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or of the existence or possible
existence of any Default or Event of Default.
10.04. Reliance by Agents. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, facsimile, telex
or teletype message, statement, order or other document or conversation
reasonably believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and
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statements of legal counsel (including, without limitation, counsel to the
Parent, the Borrower, Essex or any of their respective Subsidiaries),
independent accountants and other experts selected by the Agents. Each Agent
shall be fully justified in failing or refusing to take any action under any
Credit Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
Each Agent shall in all cases be fully protected in acting, or in refraining
from acting, under any of the Credit Documents in accordance with a request of
the Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.
10.05. Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default unless the Administrative Agent has actually received notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default." In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give prompt notice thereof to the Lenders. The Administrative Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Lenders; provided that, unless and until
the Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
10.06. Nonreliance on Agents and Other Lenders. Each Lender
expressly acknowledges that no Agent or any of its Affiliates nor any of their
respective officers, directors, employees, agents or attorneys-in-fact have made
any representations or warranties to it and that no act by any Agent hereinafter
taken, including any review of the affairs of the Parent, the Borrower, Essex or
any of their respective Subsidiaries, shall be deemed to constitute any
representation or warranty by such Agent or any such other Person to any Lender.
Each Lender represents to the Agents that it has, independently and without
reliance upon any Agent or any such other Person or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, assets, operations, property,
financial and other condition, prospects and creditworthiness of the Parent, the
Borrower, Essex and their respective Subsidiaries and made its own decision to
make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon any Agent or
any such other Person or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, assets, op-
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erations, property, financial and other condition, prospects and
creditworthiness of the Parent, the Borrower, Essex and their respective
Subsidiaries. No Agent shall have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
assets, property, financial and other condition, prospects or creditworthiness
of the Borrower, Essex or any of their respective Subsidiaries which may come
into the possession of any Agent or any of its Affiliates or any of their
officers, directors, employees, agents or attorneys-in-fact.
10.07. Indemnification. The Lenders agree to indemnify each Agent in
its capacity as such ratably according to their respective "percentages" as used
in determining the Required Lenders at such time, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, reasonable expenses or disbursements of any kind whatsoever which may at
any time (including, without limitation, at any time following the payment of
the Obligations) be imposed on, incurred by or asserted against such Agent in
its capacity as such in any way relating to or arising out of any Credit
Document, or any documents contemplated by or referred to herein or therein, or
the transactions contemplated hereby or thereby or any action taken or omitted
to be taken by the Agent under or in connection with any of the foregoing, but
only to the extent that any of the foregoing is not paid by the Parent, the
Borrower, Essex or any of their respective Subsidiaries; provided that no Lender
shall be liable to any Agent for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent found to have resulted solely from the
gross negligence or willful misconduct of such Agent. If any indemnity furnished
to any Agent for any purpose shall, in the opinion of such Agent be insufficient
or become impaired, such Agent may call for additional indemnity and cease, or
not commence, to do the acts indemnified against until such additional indemnity
is furnished. The agreements in this Section 10.07 shall survive the payment of
all Obligations.
10.08. Agents in their Individual Capacity. Each Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Parent, the Borrower, Essex and their respective
Subsidiaries and Affiliates as though such Agent were not an Agent hereunder.
With respect to the Loans made by it and all Obligations owing to it, each Agent
shall have the same rights and powers under this Agreement as any Lender and may
exercise the same as though it were not an Agent and the terms "Lender" and
"Lenders" shall include such Agent in its individual capacity.
10.09. Holders. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person or entity who, at the time of making such
request or giving such authority or consent, is the holder
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of any Note shall be conclusive and binding on any subsequent holder,
transferee, assignee or indorsee, as the case may be, of such Note or of any
Note or Notes issued in exchange therefor.
10.10. Resignation of the Administrative Agent; Successor
Administrative Agent. The Administrative Agent may resign as the Administrative
Agent upon 60 days' notice to the Lenders and the Borrower. Upon the resignation
of the Administrative Agent, the Required Lenders shall appoint from among the
Lenders a successor Administrative Agent which is a bank or a trust company for
the Lenders subject to prior approval by the Borrower (such approval not to be
unreasonably withheld; provided that such approval shall not be required if a
Default or an Event of Default then exists), whereupon such successor agent
shall succeed to the rights, powers and duties of the Administrative Agent, and
the term "Administrative Agent" shall include such successor agent effective
upon its appointment, and the resigning Administrative Agent's rights, powers
and duties as the Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement. After the resignation of the Administrative Agent
hereunder, the provisions of this Section 10 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement.
11. MISCELLANEOUS.
11.01. Payment of Expenses, etc. The Parent and the Borrower,
jointly and severally, agree to: (i) whether or not the transactions herein
contemplated are consummated, pay all out-of-pocket costs and expenses of the
Administrative Agent (including, without limitation, the reasonable fees and
disbursements of Cahill Gordon & Reindel) in connection with the negotiation,
preparation, execution and delivery of the Credit Documents and the documents
and instruments referred to therein and any amendment, waiver or consent
relating thereto and in connection with the Administrative Agent's syndication
efforts with respect to this Agreement; (ii) pay all out-of-pocket costs and
expenses of the Administrative Agent and each of the Lenders in connection with
the enforcement of the Credit Documents and the documents and instruments
referred to therein and, after a Default or an Event of Default shall have
occurred and be continuing, the protection of the rights of the Administrative
Agent and each of the Lenders thereunder (including, without limitation, the
fees and disbursements of counsel for the Administrative Agent and for each of
the Lenders); (iii) pay and hold each of the Lenders harmless from and against
any and all present and future stamp and other similar taxes with respect to the
foregoing matters and save each of the Lenders harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Lender) to pay such taxes; and (iv)
indemnify each Agent and each Lender and each of their Affiliates, and each of
their respective officers, directors, employees, representatives and
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agents from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a result of,
or arising out of, or in any way related to, or by reason of, any investigation,
litigation or other proceeding (whether or not any such Person is a party
thereto and whether or not any such investigation, litigation or other
proceeding is between or among any such Person, or any third Person or
otherwise) related to the entering into and/or performance of any Credit
Document or the use of the proceeds of any Loans hereunder or the consummation
of any other transactions contemplated in any Credit Document (but excluding any
such losses, liabilities, claims, damages or expenses to the extent found to
have been incurred by reason of the gross negligence or willful misconduct of
the Person to be indemnified), in each case, including, without limitation, the
reasonable fees and disbursements of counsel and independent consultants
incurred in connection with any such investigation, litigation or other
proceeding.
11.02. Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, the Administrative
Agent and each Lender are hereby authorized at any time or from time to time,
without presentment, demand, protest or any other notice of any kind to the
Borrower or any of its Subsidiaries or any Guarantor or any other Person, any
such notice, to the full extent permitted by applicable law, being hereby
expressly waived, to set off and to appropriate and apply any and all deposits
(general or special) and any other Indebtedness at any time held or owing by the
Administrative Agent or such Lender (including, without limitation, by branches
and agencies of the Administrative Agent and such Lender wherever located) to or
for the credit or the account of the Borrower or any Guarantor against and on
account of the Obligations of the Borrower or any Guarantor to the
Administrative Agent or such Lender under this Agreement or under any of the
other Credit Documents, including, without limitation, all interests in
Obligations of the Borrower or any Guarantor purchased by such Lender pursuant
to Section 11.06(b), and all other claims of any nature or description arising
out of or connected with any Credit Document, irrespective of whether or not the
Administrative Agent or such Lender shall have made any demand hereunder and
although said Obligations shall be contingent or unmatured.
11.03. Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to any Credit Party,
at the address specified for such Credit Party on Schedule XI; if to any Lender,
at the address specified for such Lender on Schedule II; or, at such other
address as shall be designated by any party in a written notice to the other
parties hereto. All such notices and communications shall be mailed,
telegraphed, telexed, telecopied or cabled or sent by overnight courier, and
shall be effective when received.
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11.04. Benefit of Agreement. (a) This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided, however, neither the Borrower nor
any Guarantor may assign or transfer any of its rights, obligations or interest
under any Credit Document without the prior written consent of the Lenders; and
provided, further, that, although any Lender may transfer, assign or grant
participations in its rights hereunder, such Lender shall remain a "Lender" for
all purposes hereunder (and may not transfer or assign all or any portion of its
Commitment hereunder except as provided in Section 11.04(b)) and the transferee,
assignee or participant, as the case may be, shall not constitute a "Lender"
hereunder; and provided, further, that no Lender shall transfer or grant any
participation under which the participant shall have rights to approve any
amendment to or waiver of any Credit Document except to the extent such
amendment or waiver would (i) extend the Maturity Date, or reduce the rate or
extend the time of payment of interest or fees on Loans in which such
participant is participating (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof (it being understood that any amendment or modification
to the financial definitions in this Agreement shall not constitute a reduction
in any rate of interest or fees for purposes of this clause (i), or increase the
amount of the participant's participation over the amount thereof, or increase
the amount of the participant's participation over the amount thereof then in
effect (it being understood that a waiver of any Default or Event of Default
shall not constitute a change in the terms of such participation, and that an
increase in any Commitment or Loan shall be permitted without the consent of any
participant if the participant's participation is not increased as a result
thereof) or (ii) consent to the assignment or transfer by the Borrower of its
rights and obligations under this Agreement. In the case of any such
participation, the participant shall not have any rights under any of the Credit
Documents (the participant's rights against such Lender in respect of such
participation to be those set forth in the agreement executed by such Lender in
favor of the participant relating thereto) and all amounts payable by the
Borrower hereunder shall be determined as if such Lender had not sold such
participation.
(b) Notwithstanding the foregoing, any Lender (or any Lender
together with one or more other Lenders) may (x) assign all or a portion of its
Commitment (and related outstanding Obligations hereunder) to any Affiliate of
such Lender which is at least 50% owned by such Lender or its parent company or
to one or more Lenders or (y) assign all, or if less than all, a portion equal
to at least $5,000,000 in the aggregate for the assigning Lender or assigning
Lenders, of such Commitment (and related outstanding Obligations hereunder) to
one or more Eligible Transferees, each of which assignees shall become a party
to this Agreement as a Lender by execution of an Assignment and Assumption
Agreement; provided that (i) at such time Schedule I shall be deemed modified to
reflect the Commitments of such new Lender and of the existing Lenders, (ii)
upon surrender of the old Notes, new Notes will be issued, at the Borrower's
expense, to such new Lender and to the assigning Lender, such new Notes to be in
conformity with the requirements of Sec-
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tion 1.04 (with appropriate modifications) to the extent needed to reflect the
revised Commitments, (iii) the consent of the Administrative Agent shall be
required in connection with any such assignment pursuant to clause (y) of this
Section 11.04(b) and (iv) the Administrative Agent shall receive at the time of
each such assignment, from the assigning or assignee Lender, the payment of a
non-refundable assignment fee of $3,500; and provided, further, that such
transfer or assignment will not be effective until recorded by the
Administrative Agent on the Register pursuant to Section 11.15. To the extent of
any assignment pursuant to this Section 11.04(b), the assigning Lender shall be
relieved of its obligations hereunder with respect to its assigned Commitment.
At the time of each assignment pursuant to this Section 11.04(b) to a Person
which is not already a Lender hereunder and which is not a United States person
(as such term is defined in Section 7701(a)(30) of the Code) for Federal income
tax purposes, the respective assignee Lender shall provide to the Borrower and
the Administrative Agent the appropriate Internal Revenue Service Forms (and, if
applicable, a Section 2.06(b)(ii) Certificate) described in Section 2.06(b).
(c) Nothing in this Agreement shall prevent or prohibit any Lender
from pledging its Loans and Notes hereunder to a Federal Reserve Bank in support
of borrowings made by such Lender from such Federal Reserve Bank.
11.05. No Waiver; Remedies Cumulative. No failure or delay on the
part of any party in exercising any right, power or privilege under any Credit
Document and no course of dealing between any Credit Party and the
Administrative Agent or any Lender shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege under any Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
herein expressly provided are cumulative and not exclusive of any rights or
remedies which any party would otherwise have. No notice to or demand on any
Credit Party in any case shall entitle any Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent or the Lenders to any other or further action
in any circumstances without notice or demand.
11.06. Payments Pro Rata. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of any Credit Party
in respect of any Obligations of such Credit Party, it shall, except as
otherwise provided in this Agreement, distribute such payment to the Lenders
(other than any Lender that has consented in writing to waive its pro rata share
of such payment) pro rata based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any
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right under the Credit Documents, or otherwise) which is applicable to the
payment of the principal of, or interest on, the Loans or fees, of a sum which
with respect to the related sum or sums received by other Lenders is in a
greater proportion than the total of such Obligation then owed and due to such
Lender bears to the total of such Obligation then owed and due to all of the
Lenders immediately prior to such receipt, determined in accordance with the
terms of this Agreement, then such Lender receiving such excess payment shall
purchase for cash without recourse or warranty from the other Lenders an
interest in the Obligations of the respective Credit Party to such Lenders in
such amount as shall result in a proportional participation by all of the
Lenders in such amount; provided that if all or any portion of such excess
amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
11.07. Calculations; Computations. (a) The financial statements to
be furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Lenders); provided that except as otherwise specifically
provided herein, all computations determining compliance with Sections 2.02 and
6, including definitions used therein, shall, in each case, utilize accounting
principles and policies in effect at the time of the preparation of, and in
conformity with those used to prepare, the financial statements delivered to the
Lenders pursuant to Section 4.08(b). For purposes of calculating Consolidated
Net Income and the Consolidated Fixed Charge Coverage Ratio, as of the Borrowing
Date, Essex International shall be treated as a Wholly Owned Restricted
Subsidiary of the Borrower for so long as the Merger Agreement remains in full
force and effect.
(b) All computations of interest and fees hereunder shall be based
on the actual number of days elapsed over a year of 360 days.
11.08. Governing Law; Submission to Jurisdiction; Venue. (a) THIS
AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Agreement or any other Credit Document may be brought in
the courts of the State of New York or of the United States for the Southern
District of New York, and, by execution and delivery of this Agreement, each
Credit Party hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Each Credit Party hereby further irrevocably waives any claim that any
such courts lack jurisdiction over such Credit Party, and agrees not to plead or
claim, in any legal action or proceeding with respect to any Credit Document
brought in any of the aforesaid
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courts, that any such court lacks jurisdiction over such Credit Party. Each
Credit Party irrevocably consents to the service of process in any such action
or proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to such Credit Party, at its address for notices pursuant to
Section 11.03, such service to become effective 30 days after such mailing. Each
Credit Party hereby irrevocably waives any objection to such service of process
and further irrevocably waives and agrees not to plead or claim in any action or
proceeding commenced under any Credit Document that service of process was in
any way invalid or ineffective. Nothing herein shall affect the right of the
Administrative Agent, any Lender or the holder of any Note to serve process in
any other manner permitted by applicable law or to commence legal proceedings or
otherwise proceed against any Credit Party in any other jurisdiction.
(b) Each Credit Party hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with any Credit Document
brought in the courts referred to in clause (a) above and hereby further
irrevocably waives and agrees not to plead or claim in any such court that any
such action or proceeding brought in any such court has been brought in an
inconvenient forum.
11.09. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts executed by all of the parties hereto shall be lodged with the
Borrower and the Administrative Agent.
11.10. Effectiveness. This Agreement shall become effective on the
date (the "Closing Date") on which the Borrower, each Guarantor, the
Administrative Agent, the Syndication Agent and each of the Lenders shall have
signed a counterpart hereof (whether the same or different counterparts) and
shall have delivered the same to the Administrative Agent at the Notice Office
or, in the case of the Lenders, shall have given to the Administrative Agent
telephonic (confirmed in writing), written, telex or facsimile notice (actually
received) at such office that the same has been signed and mailed to it. The
Administrative Agent will give the Borrower and each Lender prompt written
notice of the occurrence of the Closing Date.
11.11. Headings Descriptive. The headings of the several sections
and subsections of this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.
11.12. Amendment or Waiver; etc. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing
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signed by the respective Credit Parties party thereto and the Required Lenders;
provided that no such change, waiver, discharge or termination shall, without
the consent of each Lender (with Obligations being directly affected thereby in
the case of the following clause (i)), (i) extend any Maturity Date, or reduce
the rate or extend the time of payment of interest or fees on any Loan, or
reduce the principal amount thereof (it being understood that any amendment or
modification to the financial definitions in this Agreement shall not constitute
a reduction in any rate of interest or fees for purposes of this clause (i)),
(ii) amend, modify or waive any provision of this Section 11.12, (iii) reduce
the percentage specified in the definition of Required Lenders or (iv) consent
to the assignment or transfer by the Company of any of its rights and
obligations under this Agreement; provided, further, that no such change,
waiver, discharge or termination shall (x) increase the Commitment of any Lender
over the amount thereof then in effect without the consent of such Lender (it
being understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default shall not constitute an increase of the
Commitment of any Lender, and that an increase in the available portion of any
Commitment of any Lender shall not constitute an increase in the Commitment of
such Lender) or (y) without the consent of the Administrative Agent, amend,
modify or waive any provision of Section 10 as the same applies to the
Administrative Agent or any other provision as the same relates to the rights or
obligations of the Administrative Agent.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (iv), inclusive, of the first proviso to Section 11.12(a),
the consent of the Required Lenders is obtained but the consent of one or more
of such other Lenders whose consent is required is not obtained, then the
Borrower shall have the right, so long as all non-consenting Lenders whose
individual consent is required are treated as described in either clauses (A) or
(B) below, to either (A) replace each such non-consenting Lender or Lenders with
one or more Replacement Lenders pursuant to Section 1.10 so long as at the time
of such replacement, each such Replacement Lender consents to the proposed
change, waiver, discharge or termination or (B) repay outstanding Loans of such
Lender which gave rise to the need to obtain such Lender's consent, in
accordance with Section 2.01; provided that, unless the Loans repaid pursuant to
preceding clause (B) are immediately replaced in full at such time through the
addition of new Lenders or the increase of outstanding Loans of existing Lenders
(who in each case must specifically consent thereto), then in the case of any
action pursuant to preceding clause (B) the Required Lenders (determined before
giving effect to the proposed action) shall specifically consent thereto;
provided, further, that in any event the Borrower shall not have the right to
replace a Lender or repay its Loans solely as a result of the exercise of such
Lender's rights (and the withholding of any required consent by such Lender)
pursuant to the second proviso to Section 11.12(a).
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11.13. Survival. All indemnities set forth herein including, without
limitation, in Sections 1.07, 1.08, 2.06, 10.07 and 11.01 shall survive the
execution, delivery and termination of this Agreement and the Notes and the
making and repayment of the Loans.
11.14. Domicile of Loans. Each Lender may transfer and carry its
Loans at, to or for the account of any branch office, subsidiary or affiliate of
such Bank; provided that the Borrower shall not be responsible for costs arising
under Section 1.07, 1.08 or 2.06 resulting from any such transfer (other than a
transfer pursuant to Section 1.09) to the extent such costs would not otherwise
be applicable to such Lender in the absence of such transfer.
11.15. Register. The Borrower hereby designates the Administrative
Agent to serve as the Borrower's agent, solely for purposes of this Section
11.15, to maintain a register (the "Register") on which it will record the Loans
made by each of the Lenders and each repayment in respect of the principal
amount of the Loans of each Lender. Failure to make any such recordation, or any
error in such recordation, shall not affect the Borrower's obligations in
respect of such Loans. With respect to any Lender, the transfer of the rights to
the principal of, and interest on, any Loan shall not be effective until such
transfer is recorded on the Register maintained by the Administrative Agent with
respect to ownership of such Loans and prior to such recordation all amounts
owing to the transferor with respect to such Loans shall remain owing to the
transferor. The registration of assignment or transfer of all or part of any
Loans shall be recorded by the Administrative Agent on the Register only upon
the acceptance by the Administrative Agent of a properly executed and delivered
Assignment and Assumption Agreement pursuant to Section 11.04(b). Coincident
with the delivery of such an Assignment and Assumption Agreement to the
Administrative Agent for acceptance and registration of assignment or transfer
of all or part of a Loan, or as soon thereafter as practicable, the assigning or
transferor Lender shall surrender the Notes (if any) evidencing such Loans, and
thereupon one or more new Notes in the same aggregate principal amount shall be
issued to the assigning or transferor Lender and/or the new Lender upon their
request of same. The Parent and the Borrower, jointly and severally, agree to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this Section 11.15, except to the extent that any such losses, claims, damages
or liabilities are found to have resulted from the gross negligence or willful
misconduct of the Administrative Agent.
11.16. Confidentiality. Each of the Lenders agrees that it will use
its reasonable efforts not to disclose without the prior consent of the Borrower
(other than to Affiliates of such Lenders and their respective directors,
employees, auditors, counsel or other professional advisors) any confidential
information with respect to the Borrower or any of
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its Subsidiaries which is furnished pursuant to this Agreement; provided that
any Lender may disclose any such information (a) that is or has become generally
available to the public, (b) as may be required or appropriate (x) in any
report, statement or testimony submitted to any municipal, state or Federal or
other governmental regulatory body having or claiming to have jurisdiction over
such Lender or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or elsewhere)
or their successors or (y) in connection with any request or requirement of any
such regulatory body, (c) as may be required or appropriate in response to any
summons or subpoena or in connection with any litigation, (d) to comply with any
law, order, regulation or ruling applicable to such Lender, and (e) to any
prospective transferee in connection with any contemplated transfer of any of
the Notes or any interest therein by such Lender; provided that such prospective
transferee agrees to be bound by this Section 11.16 to the same extent as such
Lender.
11.17. Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
11.18. Margin Stock. Notwithstanding any other provision of this
Agreement or the other Credit Documents to the contrary, prior to the
consummation of the Merger, no provision of this Agreement, including Section
6.05, or any other Credit Document shall be deemed to create a direct or
indirect security interest in the outstanding Common Stock of Essex while it is
Margin Stock and Acquisition Co may hold such Margin Stock and sell the
outstanding Common Stock of Essex for the fair market value thereof in
accordance with Section 6.03.
11.19. DNE Systems. With respect to all provisions of this Agreement
and other Credit Documents, all of the Capital Stock of DNE Systems owned by the
Parent shall be treated as if it is all owned directly by the Borrower. As an
example of the foregoing, to the extent that provisions of this Agreement and
the other Credit Documents would allow DNE Systems, as a Restricted Subsidiary
of the Borrower, to pay dividends to its shareholders or make loans, advances or
distributions to its parent company or a subsidiary of its parent company, such
dividends, loans or advances shall only be permitted hereunder or under the
other Credit Documents to the extent that they are paid to the Borrower or a
Restricted Subsidiary of the Borrower that is a Guarantor (except to the extent
this Agreement or the Credit Documents specifically would otherwise allow a
Restricted Subsidiary of the Company to make such dividends or other payments to
the Parent). Without limiting the foregoing, all financial statements and all
financial tests contained herein shall be determined as if all the Capital Stock
of DNE Systems owned by the Parent is owned by
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the Borrower. Notwithstanding the other provisions of this Section 11.19, the
Borrower and its Restricted Subsidiaries may make Investments in DNE Systems or
its Subsidiaries only to the extent necessary to fund, in accordance with
existing business practice, DNE Systems' existing operations as of the Borrowing
Date; provided, however, that, notwithstanding the foregoing, the Borrower and
its Restricted Subsidiaries that are Guarantors may make Investments in DNE
Systems and its Subsidiaries to the extent that such Investments are permitted
by and are in accordance with the terms of Section 6.02(b)(14) (such Investments
decreasing the basket provided in such Section 6.02(b)(14)).
12. GUARANTEE.
12.01. The Guarantee. (a) In order to induce the Lenders to enter
into this Agreement and to extend credit hereunder and in recognition of the
direct and indirect benefits to be received by each Guarantor from the proceeds
of the Loans, each Guarantor hereby agrees with the Lenders as follows: Each
Guarantor hereby unconditionally and irrevocably, jointly and severally,
guarantees, as primary obligor and not merely as surety the full and prompt
payment when due, whether upon maturity, acceleration or otherwise, of any and
all of the Guaranteed Obligations of the Borrower to the Guaranteed Creditors.
If any or all of the Guaranteed Obligations of the Borrower to the Guaranteed
Creditors becomes due and payable hereunder, each Guarantor, jointly and
severally, and unconditionally promises to pay such indebtedness to the
Guaranteed Creditors, or order, on demand, together with any and all expenses
(including reasonable legal fees and expenses) which may be incurred by the
Guaranteed Creditors in collecting or enforcing any of the Guaranteed
Obligations. If claim is ever made upon any Guaranteed Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Borrower), then and in such event each
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon such Guarantor, notwithstanding any revocation of this
Guarantee or any other instrument evidencing any liability of the Borrower, and
each Guarantor shall be and remain jointly and severally liable to the aforesaid
payees hereunder for the amount so repaid or recovered to the same extent as if
such amount had never originally been received by any such payee. This is a
guarantee of payment and not of collection.
(b) Anything contained in this Guarantee to the contrary
notwithstanding, the obligations of each Subsidiary Guarantor hereunder shall be
limited to a maximum aggregate amount equal to the largest amount that would not
render its obligations hereunder subject to avoidance as a fraudulent transfer
or conveyance under Section 548 of the Bank-
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ruptcy Code or any applicable provisions of comparable state law (collectively,
the "Fraudulent Transfer Laws"), in each case after giving effect to all other
liabilities of such Subsidiary Guarantor, contingent or otherwise, that are
relevant under the Fraudulent Transfer Laws (specifically excluding, however,
any liabilities of such Subsidiary Guarantor in respect of intercompany
Indebtedness to the Borrower or other Affiliates of the Borrower to the extent
that such Indebtedness would be discharged in an amount equal to the amount paid
by such Subsidiary Guarantor hereunder, and after giving effect (x) to the
direct and indirect benefits received by such Subsidiary Guarantor as a result
of the Credit Documents and the Loans and (y) as assets to the value (as
determined under the applicable provisions of the Fraudulent Transfer Laws) of
any rights to subrogation, reimbursement, indemnification or contribution of
such Subsidiary Guarantor pursuant to applicable law or pursuant to the terms of
any agreement (including without limitation any such right of contribution under
Section 12.01(c)).
(c) The Subsidiary Guarantors under this Guarantee together desire
to allocate among themselves in a fair and equitable manner their obligations
arising under this Guarantee. Accordingly, in the event any payment or
distribution is made on any date by any Subsidiary Guarantor under this
Guarantee (a "Funding Guarantor") that exceeds its Fair Share (as defined below)
as of such date, that Funding Guarantor shall be entitled to a contribution from
each of the other Subsidiary Guarantors in the amount of such other Subsidiary
Guarantor's Fair Share Shortfall (as defined below) as of such date, with the
result that all such contributions will cause each Subsidiary Guarantor's
Aggregate Payments (as defined below) to equal its Fair Share as of such date.
"Fair Share" means, with respect to a Subsidiary Guarantor as of any date of
determination, an amount equal to (i) the ratio of (x) the Adjusted Maximum
Amount (as defined below) with respect to such Subsidiary Guarantor to (y) the
aggregate of the Adjusted Maximum Amounts with respect to all Subsidiary
Guarantors, multiplied by (ii) the aggregate amount paid or distributed on or
before such date by all Funding Guarantors under this Guarantee in respect of
the obligations guarantied. "Fair Share Shortfall" means, with respect to a
Subsidiary Guarantor as of any date of determination, the excess, if any, of the
Fair Share of such Subsidiary Guarantor over the Aggregate Payments of such
Subsidiary Guarantor. "Adjusted Maximum Amount" means, with respect to a
Subsidiary Guarantor as of any date of determination, the maximum aggregate
amount of the obligations of such Subsidiary Guarantor under this Guarantee,
determined as of such date in accordance with this Section 12.01; provided that,
solely for purposes of calculating the "Adjusted Maximum Amount" with respect to
any Subsidiary Guarantor for purposes of this Section 12.01(c), any assets or
liabilities of such Subsidiary Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder shall not be considered as assets or liabilities of such
Subsidiary Guarantor. "Aggregate Payments" means, with respect to a Subsidiary
Guarantor as of any date of determination, an amount equal to (i) the aggregate
amount of all payments and distributions made on or before such date by such
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<PAGE>
Subsidiary Guarantor in respect of this Guarantee (including, without
limitation, in respect of this Section 12.01(c)) minus (ii) the aggregate amount
of all payments received on or before such date by such Subsidiary Guarantor
from the other Subsidiary Guarantors as contributions under this Section
12.01(c). The amounts payable as contributions hereunder shall be determined as
of the date on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Subsidiary Guarantors of
their obligations as set forth in this Section 12.01(c) shall not be construed
in any way to limit the liability of any Subsidiary Guarantor hereunder.
12.02. Nature of Liability. The liability of each Guarantor
hereunder is joint and several and exclusive and independent of any security for
or other guarantee of the Guaranteed Obligations of the Borrower whether
executed by such Guarantor, any other Guarantor, any other guarantor or by any
other party, and the liability of each Guarantor hereunder is not affected or
impaired by (a) any direction as to application of payment by the Borrower or by
any other party, or (b) any other continuing or other guarantee, undertaking or
maximum liability of a guarantor or of any other party as to the Guaranteed
Obligations of the Borrower, or (c) any payment on or in reduction of any such
other guarantee or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by the Borrower, or (e) any payment made to the
Guaranteed Creditors on the Guaranteed Obligations which any such Guaranteed
Creditor repays to the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each Guarantor, to the extent permitted by applicable law, waives any right to
the deferral or modification of its obligations hereunder by reason of any such
proceeding.
12.03. Independent Obligation. The obligations of each Guarantor
hereunder are independent of the obligations of any other Guarantor, any other
guarantor, any other party or the Borrower, and a separate action or actions may
be brought and prosecuted against each Guarantor whether or not action is
brought against any other Guarantor, any other guarantor, any other party or the
Borrower and whether or not any other guarantor, any other party or the Borrower
is joined in any such action or actions. Each Guarantor waives, to the full
extent permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by the Borrower or
other circumstance which operates to toll any statute of limitations as to the
Borrower shall operate to toll the statute of limitations as to any Guarantor.
12.04. Authorization. Each Guarantor authorizes the Guaranteed
Creditors without notice or demand (except as shall be required by applicable
statute and cannot be waived), and without affecting or impairing its liability
hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew, increase, accelerate or alter,
any of the Guar-
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<PAGE>
anteed Obligations (including any increase or decrease in the rate of
interest thereon), any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the Guarantee herein made
shall apply to the Guaranteed Obligations as so changed, extended, renewed
or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset there against;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to its creditors other than
the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Guaranteed Creditors
regardless of what liability or liabilities of the Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement, any other Credit Document or any of the
instruments or agreements referred to herein or therein, or otherwise
amend, modify or supplement this Agreement, any other Credit Document or
any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
any Guarantor from its liabilities under this Guarantee.
12.05. Reliance. It is not necessary for the Guaranteed Creditors to
inquire into the capacity or powers of the Borrower or the officers, directors,
partners or agents acting or purporting to act on its behalf, and any Guaranteed
Obligations made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
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<PAGE>
12.06. Subordination. Any of the indebtedness of the Borrower now or
hereafter owing to any Guarantor is hereby subordinated to the Guaranteed
Obligations of the Borrower owing to the Guaranteed Creditors; and if the
Administrative Agent so requests at a time when an Event of Default exists, all
such indebtedness of the Borrower to any Guarantor shall be collected, enforced
and received by such Guarantor for the benefit of the Guaranteed Creditors and
be paid over to the Administrative Agent on behalf of the Guaranteed Creditors
on account of the Guaranteed Obligations of the Borrower to the Guaranteed
Creditors, but without affecting or impairing in any manner the liability of any
Guarantor under the other provisions of this Guarantee (other than the reduction
of any such liability attributable to such payment). Prior to the transfer by
any Guarantor of any note or negotiable instrument evidencing any of the
indebtedness of the Borrower to such Guarantor, such Guarantor shall mark such
note or negotiable instrument with a legend that the same is subject to this
subordination. Without limiting the generality of the foregoing, each Guarantor
hereby agrees with the Guaranteed Creditors that it will not exercise any right
of subrogation which it may at any time otherwise have as a result of this
Guarantee (whether contractual, under Section 509 of the Bankruptcy Code or
otherwise) until all Guaranteed Obligations have been irrevocably paid in full
in cash.
12.07. Waiver. (a) Each Guarantor waives any right (except as shall
be required by applicable statute and cannot be waived) to require any
Guaranteed Creditor to (i) proceed against the Borrower, any other Guarantor,
any other guarantor or any other party, (ii) proceed against or exhaust any
security held from the Borrower, any other Guarantor, any other guarantor or any
other party or (iii) pursue any other remedy in any Guaranteed Creditor's power
whatsoever. Each Guarantor waives any defense based on or arising out of any
defense of the Borrower, any other Guarantor, any other guarantor or any other
party, other than payment in full of the Guaranteed Obligations, based on or
arising out of the disability of the Borrower, any other Guarantor, any other
guarantor or any other party, or the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower other than payment in full of the Guaranteed
Obligations. The Guaranteed Creditors may, at their election, foreclose on any
security held by the Administrative Agent or any other Guaranteed Creditor by
one or more judicial or nonjudicial sales, whether or not every aspect of any
such sale is commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Guaranteed Creditors
may have against the Borrower or any other party, or any security, without
affecting or impairing in any way the liability of any Guarantor hereunder
except to the extent the Guaranteed Obligations have been paid. Each Guarantor
waives any defense arising out of any such election by the Guaranteed Creditors,
even though such election operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of such Guarantor against
the Borrower or any other party or any security.
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<PAGE>
(b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this
Guarantee, and notices of the existence, creation or incurring of new or
additional Guaranteed Obligations. Each Guarantor assumes all responsibility for
being and keeping itself informed of the Borrower's financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of the risks which
each Guarantor assumes and incurs hereunder, and agrees that the Guaranteed
Creditors shall have no duty to advise any Guarantor of information known to
them regarding such circumstances or risks.
12.08. Release of Guarantee. Upon the sale or disposition (whether
by merger, stock purchase, asset sale or otherwise) of a Subsidiary Guarantor
(or all or substantially all its assets) to an entity which is not a Subsidiary
of the Borrower and which sale or disposition is otherwise in compliance with
the terms of this Agreement or the designation of a Restricted Subsidiary that
is a Subsidiary Guarantor as an Unrestricted Subsidiary in compliance with the
terms of this Agreement, such Subsidiary Guarantor shall be deemed released from
all obligations under this Section 12 without any further action required on the
part of the Administrative Agent or any Lender; provided, however, that (x) no
Default or Event of Default shall have occurred and be continuing and (y) any
such termination shall occur only to the extent that all obligations of such
Subsidiary Guarantor with respect to the Senior Secured Credit Agreement shall
also terminate upon such release, sale or transfer. In addition, if the Mexican
Subsidiaries are required to become Guarantors, the Borrower may request the
Administrative Agent, on behalf of the Lenders, to consent, effective after the
completion of the Borrower's second full fiscal year after the Initial Borrowing
Date, to the release of the Guarantee of the Mexican Subsidiaries, which consent
may not be unreasonably withhold or delayed. The Administrative Agent shall
deliver an appropriate instrument evidencing such release upon receipt of a
request by the Borrower accompanied by an Officers' Certificate certifying as to
the compliance with this Section 12.08. Any Subsidiary Guarantor not so released
remains liable for the full amount of principal of and interest on the Loans as
provided in this Section 12.
[Signature Pages Follow]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
SUPERIOR/ESSEX CORP., as Borrower
By:
-------------------------------------
Name:
Title:
SUPERIOR TELECOM INC., as Guarantor
and as Guarantor
By:
-------------------------------------
Name:
Title:
SUPERIOR TELECOMMUNICATIONS, INC., as
Guarantor
By:
-------------------------------------
Name:
Title:
DNE SYSTEMS, INC.,
as Guarantor
By:
-------------------------------------
Name:
Title:
DNE MANUFACTURING & SERVICE COMPANY,
as Guarantor
By:
-------------------------------------
Name:
Title:
<PAGE>
DNE TECHNOLOGIES, INC.
as Guarantor
By:
-------------------------------------
Name:
Title:
TEXAS SUT INC.,
as Guarantor
By:
-------------------------------------
Name:
Title:
<PAGE>
ESSEX GROUP, INC., as Guarantor
By:
-------------------------------------
Name:
Title:
ESSEX INTERNATIONAL INC.,
as Guarantor
By:
-------------------------------------
Name:
Title:
ACTIVE INDUSTRIES, INC.,
as Guarantor
By:
-------------------------------------
Name:
Title:
DIAMOND WIRE & CABLE CO.,
as Guarantor
By:
-------------------------------------
Name:
Title:
ESSEX GROUP, INC.,
as Guarantor
By:
-------------------------------------
Name:
Title:
<PAGE>
ESSEX GROUP MEXICO INC.,
as Guarantor
By:
-------------------------------------
Name:
Title:
ESSEX MEXICO HOLDINGS, L.L.C.,
as Guarantor
By:
-------------------------------------
Name:
Title:
ESSEX SERVICES, INC.,
as Guarantor
By:
-------------------------------------
Name:
Title:
ESSEX TECHNOLOGY, INC.,
as Guarantor
By:
-------------------------------------
Name:
Title:
ESSEX WIRE CORPORATION,
as Guarantor
By:
-------------------------------------
Name:
Title:
<PAGE>
BANKERS TRUST COMPANY,
as Administrative Agent
By:
-------------------------------------
Name:
Title:
FLEET CORPORATE FINANCE, INC.,
as Syndicate Agent
By:
-------------------------------------
Name:
Title:
<PAGE>
FLEET CORPORATE FINANCE, INC.,
as Lender
By:
-------------------------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Lender
By:
-------------------------------------
Name:
Title:
<PAGE>
SCHEDULE I
LOAN COMMITMENTS
Senior Subordinated Term
Lender Loan Commitment
Bankers Trust Company $160,000,000
Fleet Corporate Finance, Inc. 40,000,000
---------------
TOTAL: $200,000,000.00
---------------
<PAGE>
SCHEDULE II
LENDER ADDRESSES
Lender Address
Bankers Trust Company One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Attention: Anthony LoGrippo
Telephone No.: (212) 250-4886
Facsimile No.: (212) 250-7218
Fleet Corporate Finance, Inc. One Federal Street
3rd Floor
Boston, Massachusetts 02110
Attention: Howard Diamond
Telephone No.: (617) 346-0042
Facsimile No.: (617) 346-5093
<PAGE>
Schedule XI
CREDIT PARTY ADDRESSES
Credit Party Address
- ------------ -------
Superior/Essex Corp. 150 Interstate North Parkway
Suite 300
Atlanta, Georgia 30334
Telephone No.: (770) 953-8338
Facsimile No.: (770) 984-3218
Superior Telecommunications Inc. 150 Interstate North Parkway
Suite 300
Atlanta, Georgia 30334
Telephone No.: (770) 953-8338
Facsimile No.: (770) 984-3218
Superior Telecom Inc. 150 Interstate North Parkway
Suite 300
Atlanta, Georgia 30334
Telephone No.: (770) 953-8338
Facsimile No.: (770) 984-3218
DNE Systems, Inc. 50 Barnes Park North
Wallingford, Connecticut 06492
Telephone No.: (203)
Facsimile No.: (203) 984-3218
DNE Technologies, Inc. 50 Barnes Park North
Wallingford, Connecticut 06492
Telephone No.: (203)
Facsimile No.: (203) 265-7801
Texas SUT Inc. 150 Interstate North Parkway
Suite 300
Atlanta, Georgia 30334
Telephone No.: (770) 953-8338
Facsimile No.: (770) 984-3218
Essex Group, Inc. 1601 Wall Street
Fort Wayne, Indiana 46802
Telephone No.: (219) 461-4000
Facsimile No.: (219) 461-4469
<PAGE>
Essex International Inc. 1601 Wall Street
Fort Wayne, Indiana 46802
Telephone No.: (219) 461-4000
Facsimile No.: (219) 461-4469
Active Industries, Inc. 1601 Wall Street
Fort Wayne, Indiana 46802
Telephone No.: (219) 461-4000
Facsimile No.: (219) 461-4469
Diamond Wire & Cable Co. 1601 Wall Street
Fort Wayne, Indiana 46802
Telephone No.: (219) 461-4000
Facsimile No.: (219) 461-4469
Essex Mexico Holdings, LLC 1601 Wall Street
Fort Wayne, Indiana 46802
Telephone No.: (219) 461-4000
Facsimile No.: (219) 461-4469
Essex Group Mexico Inc. 1601 Wall Street
Fort Wayne, Indiana 46802
Telephone No.: (219) 461-4000
Facsimile No.: (219) 461-4469
Essex Wire Corporation 1601 Wall Street
Fort Wayne, Indiana 46802
Telephone No.: (219) 461-4000
Facsimile No.: (219) 461-4469
Essex Technology Inc. 1601 Wall Street
Fort Wayne, Indiana 46802
Telephone No.: (219) 461-4000
Facsimile No.: (219) 461-4469
FOR IMMEDIATE RELEASE
Company Contact:
Suzanne D. Fernandez
Corporate Communications
212-757-3333
SUPERIOR TELECOM INC. COMPLETES TENDER OFFER FOR
ESSEX INTERNATIONAL INC.
New York, NY (November 27, 1998) -- Superior TeleCom Inc. (NYSE:SUT) today
announced that it had successfully completed its tender offer to purchase up to
22,562,135 shares of Essex International Inc. (NYSE:SXC) for $32.00 per share,
representing approximately 81% of the outstanding shares of Essex. The tender
offer expired at 12:00 midnight, New York City time, on Wednesday, November 25,
1998.
Based on a preliminary count, 24,956,426 shares of Essex were tendered,
together with in excess of 2,000,000 shares tendered subject to guaranteed
delivery procedures. Superior has accepted for purchase 22,562,135 shares on a
pro rata basis. The final results of proration are not expected to be announced
before December 4, 1998, after the precise number of shares validly tendered has
been calculated. Payment for shares accepted for purchase in the tender offer
will be made when the final results of proration are determined. The financing
for the offer was completed today.
As previously announced, Superior and Essex are parties to a merger
agreement. Superior expects to merge Essex with a subsidiary of Superior during
the first quarter of 1999. Following the merger, Essex will be a wholly owned
subsidiary of Superior.
Superior TeleCom Inc. is a leading manufacturer and supplier of
telecommunications cable and wire products to telephone companies, distributors
and system integrators. It also develops and manufactures voice and data
multiplexers and other electronics and signal processing components and systems.
Except for the historical information herein, the matters discussed in
this new release include forward-looking statements that may involve a number of
risks and uncertainties. Actual results may vary significantly based on a number
of factors, including, but not limited to, risks in product and technology
development, market acceptance of new products and continuing product demand,
the impact of competitive products and pricing, changing economic conditions,
including changes in short-term interest rates and foreign currency
fluctuations, and other risk factors detailed in Superior's most recent annual
report and other filings with the Securities and Exchange Commission.
EXHIBIT 99.10
AGREEMENT AS TO JOINT FILING OF AMENDMENT NO. 1 TO SCHEDULE 13D
Each of the undersigned hereby affirms that it is individually eligible to use
Schedule 13D and agrees that this Amendment No. 1 to Schedule 13D is filed on
its behalf.
Dated:December 4, 1998
SUT ACQUISITION CORP.
By: /s/ Steven S. Elbaum
-----------------------------------------
Name: Steven S. Elbaum
Title: Chairman of the Board, President
and Chief Executive Officer
SUPERIOR/ESSEX CORP.
By: /s/ Steven S. Elbaum
-----------------------------------------
Name: Steven S. Elbaum
Title: Chairman of the Board, President
and Chief Executive Officer
SUPERIOR TELECOM INC.
By: /s/ Steven S. Elbaum
-----------------------------------------
Name: Steven S. Elbaum
Title: Chairman of the Board, President
and Chief Executive Officer
THE ALPINE GROUP, INC.
By: /s/ Steven S. Elbaum
-----------------------------------------
Name: Steven S. Elbaum
Title: Chairman of the Board and Chief
Executive Officer
