Exhibit 10(bb)
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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
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Dated as of November 27, 1998
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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..............................................................................13
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.....................................................................16
3.04. Opinions of Counsel.......................................................................16
3.05. Corporate Proceedings.....................................................................16
3.06. Adverse Change, etc.......................................................................16
3.07. Litigation................................................................................17
3.08. Approvals.................................................................................17
3.09. Consummation of the Transaction...........................................................17
3.10. Essex Credit Agreement....................................................................18
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
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3.15. Representations and Warranties in Senior Secured Credit Agreement.........................20
3.16. Creation of the Borrower..................................................................20
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS..........................................................20
4.01. Corporate Status..........................................................................20
4.02. Corporate Power and Authority.............................................................21
4.03. No Violation..............................................................................21
4.04. Use of Proceeds...........................................................................21
4.05. Governmental Approvals....................................................................22
4.06. Investment Company Act; Public Utility Holding Company Act................................22
4.07. True and Complete Disclosure..............................................................22
4.08. Financial Condition; Financial Statements.................................................22
4.09. Transaction...............................................................................24
4.10. Compliance with ERISA.....................................................................24
4.11. Subsidiaries..............................................................................26
4.12. Intellectual Property.....................................................................26
4.13. Compliance with Statutes, etc.............................................................26
4.14. Environmental Matters.....................................................................27
4.15. Properties................................................................................28
4.16. Labor Relations...........................................................................28
4.17. Tax Returns and Payments..................................................................28
4.18. Year 2000.....................................................................................29
5. AFFIRMATIVE COVENANTS...............................................................................29
5.01. Information Covenants.....................................................................29
5.02. Books, Records and Inspections............................................................32
5.03. Insurance.................................................................................32
5.04. Payment of Taxes..........................................................................32
5.05. Compliance with Statutes, etc.............................................................32
5.06. Corporate Franchises......................................................................33
5.07. Good Repair...............................................................................33
5.08. Year 2000.................................................................................33
6. NEGATIVE COVENANTS..................................................................................34
6.01. Indebtedness..............................................................................34
6.02. Restricted Payments.......................................................................37
6.03. Asset Sales...............................................................................40
6.04. Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries..............41
6.05. Liens.....................................................................................42
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6.06. Senior Subordinated Debt..................................................................42
6.07. ▇▇▇▇▇▇, Consolidation and Sale of Assets..................................................42
6.08. Transactions with Affiliates..............................................................44
6.09. Additional Guarantees.....................................................................45
6.10. Designation of Unrestricted Subsidiaries..................................................46
6.11. Conduct of Business.......................................................................47
6.12. Limitation of Activities of Parent........................................................47
7. EVENTS OF DEFAULT...................................................................................47
7.01. Failure to Make Payments When Due.........................................................47
7.02. Representations, etc......................................................................47
7.03. Breach of Covenants.......................................................................47
7.04. Default Under Other Agreements............................................................48
7.05. Judgments.................................................................................48
7.06. Bankruptcy................................................................................48
7.07. Merger....................................................................................49
7.08. Guarantees................................................................................49
7.09. Remedies..................................................................................49
8. SUBORDINATION.......................................................................................51
8.01. Obligations Subordinated to Senior Indebtedness...........................................51
8.02. Suspension of Payment When Senior Indebtedness Is in Default..............................51
8.03. Loans Subordinated to Prior Payment of All Senior Indebtedness on Dissolution,
Liquidation or Reorganization of Borrower..............................................52
8.04. Lenders to Be Subrogated to Rights of Holders of Senior Indebtedness......................54
8.05. Obligations of the Borrower Unconditional.................................................55
8.06. Administrative Agent Entitled to Assume Payments Not Prohibited in Absence of
Notice.................................................................................55
8.07. Application by Administrative Agent of Assets Deposited with It...........................56
8.08. No Waiver of Subordination Provisions.....................................................56
8.09. Lenders Authorize Administrative Agent to Effectuate Subordination of Loans...............57
8.10. Right of Administrative Agent and Lenders to Hold Senior Indebtedness.....................57
8.11. This Section 8 Not to Prevent Events of Default...........................................57
8.12. No Fiduciary Duty of Administrative Agent to Holders of Senior Indebtedness...............58
8.13. Effect on Senior Indebtedness.............................................................58
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9. DEFINITIONS AND ACCOUNTING TERMS....................................................................58
9.01. Defined Terms.............................................................................58
10. THE AGENTS..........................................................................................90
10.01. Appointment...............................................................................90
10.02. Delegation of Duties......................................................................90
10.03. Exculpatory Provisions....................................................................91
10.04. Reliance by Agent.........................................................................91
10.05. Notice of Default.........................................................................92
10.06. Nonreliance on Agent and Other Lenders....................................................92
10.07. Indemnification...........................................................................93
10.08. Agent in Its Individual Capacity..........................................................93
10.09. Holders...................................................................................93
10.10. Resignation of the Administrative Agent; Successor Administrative Agent...................93
11. MISCELLANEOUS.......................................................................................94
11.01. Payment of Expenses, etc..................................................................94
11.02. Right of Setoff...........................................................................95
11.03. Notices...................................................................................95
11.04. Benefit of Agreement......................................................................95
11.05. No Waiver; Remedies Cumulative............................................................97
11.06. Payments Pro Rata.........................................................................97
11.07. Calculations; Computations................................................................98
11.08. Governing Law; Submission to Jurisdiction; Venue..........................................98
11.09. Counterparts..............................................................................99
11.10. Effectiveness.............................................................................99
11.11. Headings Descriptive.....................................................................100
11.12. Amendment or Waiver; etc.................................................................100
11.13. Survival.................................................................................101
11.14. Domicile of Loans........................................................................101
11.15. Register.................................................................................101
11.16. Confidentiality..........................................................................102
11.17. Waiver of Jury Trial.....................................................................102
11.18. Margin Stock.............................................................................102
11.19. DNE Systems..............................................................................103
12. GUARANTEE..........................................................................................103
12.01. The Guarantee............................................................................103
12.02. Nature of Liability......................................................................105
12.03. Independent Obligation...................................................................105
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12.04. Authorization............................................................................106
12.05. Reliance.................................................................................107
12.06. Subordination............................................................................107
12.07. Waiver...................................................................................107
12.08. Release of Guarantee.....................................................................108
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
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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, ▇▇▇▇▇ 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
▇▇▇▇▇▇'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
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 ▇▇▇▇▇▇, 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 Loans
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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, order or request (such as,
for example, but not limited to, a change in official re-
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serve 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
(iii)), or (ii) if the affected LIBOR Loan is then outstanding, upon at least
two Business Days' notice
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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 ▇▇▇▇▇▇
(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 default 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
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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 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 11.15 and, if so requested by the Replacement Lender, of the
appropriate Note or
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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 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;
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(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).
(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
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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 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
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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:
(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");
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(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 ▇▇▇▇▇▇ 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.
(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 pre-
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payment 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 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
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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 ▇▇▇▇▇▇ and the Administrative Agent upon its written request, for
the amount of any Taxes so levied or imposed and paid by such ▇▇▇▇▇▇ 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 Administrative 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 ▇▇▇▇▇▇'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
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original signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such ▇▇▇▇▇▇'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 Section
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:
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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.
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
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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 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.
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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 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ 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 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.
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(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 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
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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).
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
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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 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.
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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 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
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 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.
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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 ▇▇▇▇▇
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
▇▇▇▇▇'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 fiscal years have been audited by and accompanied
by the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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
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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, 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 ▇▇▇▇▇. (a) The Parent, the Borrower,
Essex, their respective Subsidiaries and their respective ERISA Affiliates are
in compliance with all ap-
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plicable 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 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
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(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 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
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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 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.
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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.
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 agree-
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ment 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 Obligations 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
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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 broken
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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.
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(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 commencement
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
informa-
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tion 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 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 pre-
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serve, 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 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;
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(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;
(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;
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(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 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);
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(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 $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
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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 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;
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(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 (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
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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 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
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(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 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).
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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 Documents; (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
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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 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
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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.
(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 ref-
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erences 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 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;
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(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 Agreement
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
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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.
(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 (in-
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cluding 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 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 prop-
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erty 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
corporate 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
be-
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come 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 acceleration 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.
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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 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
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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 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
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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 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
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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.
(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
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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 Administrative
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.
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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
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. ▇▇▇▇▇▇▇ AUTHORIZE ADMINISTRATIVE AGENT TO EFFECTUATE
SUBORDINATION OF LOANS. Each Lender authorizes and expressly directs the
Administrative Agent on such ▇▇▇▇▇▇'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 ▇▇▇▇▇▇'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
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the business and assets of the Borrower or any Guarantor, the immediate filing
of a claim for the unpaid balance of such ▇▇▇▇▇▇'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 expiration 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.
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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.
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
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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.
"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.
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"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 Subsidiaries)); 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.
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"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).
"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.
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"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.
"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 ▇▇▇▇▇'▇,
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 ▇▇▇▇▇'▇, (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
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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 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 ▇▇▇▇▇▇'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 Pe-
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riod") 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 Ratio" 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
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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 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)
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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 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, ▇▇▇▇▇▇'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
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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.
"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,
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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 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.
"Fair Share Shortfall" shall have the meaning provided in
Section 12.01(c) of this Agreement.
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"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.
"Guarantee" shall mean the Guarantee provided in Section 12.
"Guarantor" shall mean each of the Parent and the Subsidiary
Guarantors.
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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.
"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 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 re-
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purchase 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 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.
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"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
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 Re-
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stricted 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 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,
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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 Borrower 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.
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"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 ▇▇▇▇▇'▇ 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 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.
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"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 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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 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.
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"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 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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 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
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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 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 consti-
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tuting 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, contributed 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.
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"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) 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.
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"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.
"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.
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"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.
"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).
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"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 subsequent 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 Guar-
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antor, (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, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & 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 (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.
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"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 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.
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"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 ▇▇▇▇▇ 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 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.
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"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 products 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.
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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 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,
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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 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.
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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, operations, 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 indem-
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nified 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 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇) in
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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 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
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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 ▇▇▇▇▇▇ 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.
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 ▇▇▇▇▇▇ in
favor of the participant relating thereto) and all amounts payable by the
Borrower hereunder shall be determined as if such ▇▇▇▇▇▇ had not sold such
participation.
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(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 (i) 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 (ii) in the case of any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and is managed
by the same investment advisor of such Lender or by an Affiliate of such
investment advisor 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 (treating any fund that invests in bank loans and any
other fund that invests in bank loans and is managed by the same investment
advisor of such fund or by an Affiliate of such fund as a single Eligible
Transferee), 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 Section 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
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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 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.
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(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 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
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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 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
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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 ▇▇▇▇▇▇'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
▇▇▇▇▇▇'s rights (and the withholding of any required consent by such Lender)
pursuant to the second proviso to Section 11.12(a).
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,
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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 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 ▇▇▇▇▇▇; 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
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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 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
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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 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
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
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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 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.
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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 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 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.
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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.
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,
-103-
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.
(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]
-104-
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:
DNE TECHNOLOGIES, INC.
as Guarantor
By:
-------------------------------------------
Name:
Title:
TEXAS SUT INC.,
as Guarantor
By:
-------------------------------------------
Name:
Title:
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:
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:
BANKERS TRUST COMPANY,
as Administrative Agent
By:
-------------------------------------------
Name:
Title:
FLEET CORPORATE FINANCE, INC.,
as Syndicate Agent
By:
-------------------------------------------
Name:
Title:
FLEET CORPORATE FINANCE, INC.,
as Lender
By:
-------------------------------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Lender
By:
-------------------------------------------
Name:
Title:
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
-------------------------
SCHEDULE II
▇▇▇▇▇▇ ADDRESSES
Lender Address
Bankers Trust Company One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fleet Corporate Finance, Inc. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE XI
CREDIT PARTY ADDRESSES
CREDIT PARTY ADDRESS
Superior/Essex Corp. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Superior Telecommunications Inc. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Superior Telecom Inc. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
DNE Systems, Inc. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (203)
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
DNE Technologies, Inc. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (203)
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Texas SUT Inc. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Essex Group, Inc. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Essex International Inc. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Active Industries, Inc. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Diamond Wire & Cable Co. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Essex Mexico Holdings, LLC ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Essex Group Mexico Inc. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Essex Wire Corporation ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Essex Technology Inc. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇