EXHIBIT 10(V)
AMENDMENT NUMBER ONE dated as of December 10, 1999 ("Amendment No.
1"), to the Senior Subordinated Credit Agreement dated as of May 26, 1999 (the
"Credit Agreement"), among SUPERIOR/ESSEX CORP., a Delaware corporation (the
"Borrower"), SUPERIOR TELECOM INC., a Delaware corporation (the "Parent"), each
of the Subsidiary Guarantors party thereto (the "Guarantors"), the lending
institutions from time to time party thereto (each a "Lender" and collectively,
the "Lenders") FLEET CORPORATE FINANCE, INC., as Syndication Agent and Bankers
Trust Company, as Administrative Agent (the "Agents"). Capitalized terms used
and not otherwise defined herein shall have the meanings assigned to them in the
Credit Agreement.
WHEREAS, the Borrower intends to merge with Superior
Telecommunications Inc., a Subsidiary Guarantor (the "Borrower Merger"), with
the Borrower as survivor; and
WHEREAS, after the Borrower Merger, the Borrower intends to change
its name to Superior Telecommunications Inc.; and
WHEREAS, the Borrower intends to issue a subordinated promissory
note to the Parent; and
WHEREAS, the Borrower intends to pay the Parent a one time fee for
guaranteeing the Borrower's Obligations under the Credit Agreement; and
WHEREAS, in connection with the foregoing the Borrower has requested
that the Agents and the Lenders amend certain provisions of the Credit
Agreement; and
WHEREAS, the Agents and the Lenders have considered and agreed to
the Borrower's requests, upon the terms and conditions set forth in this
Amendment No. 1; and
WHEREAS, the consent of the Required Lenders is necessary to effect
this Amendment No. 1;
NOW, THEREFORE, in consideration of the foregoing, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
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SECTION ONE - Amendment
The Credit Agreement is amended as hereinafter provided in this
Section One, effective as of December 10, 1999 (the "Amendment Effective Date").
1.1. Amendments to Section 6 (Negative Covenants) of the Credit Agreement.
(a) Section 6.01 shall be amended by inserting the following at clause
(xv) of such Section:
"(xv) the Intercompany Subordinated Loan;"
(b) Section 6.02(a) shall be amended by deleting the text thereof in its
entirety and replacing it with the following:
"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,
(c) make any Investment (other than Permitted Investments) or (d) make any
payments with respect to the Intercompany Subordinated Loan (each of the
foregoing actions set forth in clauses (a), (b), (c) and (d) being
referred to as a "Restricted Payment"), if at the time of such Restricted
Payment or immediately after giving effect thereto, (i) a Default shall
have occurred and be continuing or (ii) the Borrower is not able to incur
at least $1.00 of additional Indebtedness pursuant to paragraph (xvii) of
Section 6.01 or (iii) the aggregate amount of Restricted Payments
(including such proposed Restricted Payment but excluding Restricted
Payments pursuant to clause (2), (3), (5), (6), (7), (8), (9), (10), (11),
(12), (13) or (14) of the next paragraph) made subsequent to the January
1, 1999 shall exceed the sum (the "Basket") of (without duplication): (v)
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 January 1, 1999 and on or prior to the date
the Restricted Payment occurs (the
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"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)(w) 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; and 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."
Section 6.02 shall be further amended by: (x) by deleting the words
"dividends" and "dividend payment" in clause (10) and replacing such deleted
words with "Restricted Payments" and "Restricted Payment," respectively, (y)
deleting clause (11) in its entirety and (z) deleting the reference to
"6.08(b)(v)" in clause (12).
(c) Section 6.08(b) shall be amended by deleting "and" before clause (vi)
and by inserting the following at the end of such Section:
"(vii) amounts paid by the Borrower to the Parent as a supplemental
management fee so long as the proceeds thereof are used at the time of
such fee payment by the Parent (I) to make the payment permitted to be
made by the Parent pursuant to clause (v) of this Section 6.08(b) and (II)
(x) to pay expenses for ad-
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ministrative, legal and accounting services provided by third parties that
are reasonable and customary and incurred in the ordinary course of
business and other costs and expenses in connection with the Parent being
a publicly traded company for such professional services or to pay
franchise and similar costs 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 fee 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 (1) $2,500,000 and (2) that portion of the fee permitted to be
paid by clause (v) of this Section 6.08(b) in such period that is not
actually paid; and
(viii) the payment of a one time guaranty fee to the Parent in an amount
not to exceed $10,000,000 for the Parent's Guarantee; provided, such
payment shall be reduced by the amount of cash dividends paid to the
Parent with respect to the Trust Preferred Securities since November 27,
1998."
(d) Section 6.12 shall be amended by deleting clause (i) in its entirety
and replacing it with the following:
"(i) hold or acquire any assets (other than the capital stock of the
Borrower, Superior Trust I and DNE Systems and its Subsidiaries, the note
evidencing the Intercompany Subordinated Loan and insignificant assets)."
1.2. Amendments to Section 9 (Definitions and Accounting Terms) of the Credit
Agreement.
(a) Section 9 shall be amended by adding the following new definition in
appropriate alphabetical order:
"'Amendment No. 1' shall mean Amendment Number One dated as of
December 10, 1999 to this Agreement."
"'Borrower Merger' shall mean the merger of Superior Telecommunications
Inc. with and into Superior/Essex
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Corp. in which Superior/Essex Corp. shall be the surviving corporation."
"'Intercompany Subordinated Loan' shall mean the long-term subordinated
indebtedness (on terms satisfactory to the Administrative Agent) of the
Borrower to the Parent in an aggregate principal amount not to exceed
$167,000,000."
(b) Section 9 shall be further amended as follows:
"Senior Indebtedness" shall be amended by deleting "and" and inserting a
comma before clause (ix) in the second sentence thereof and inserting the
following after clause (ix) of the second sentence:
"and (x) the Intercompany Subordinated Loan."
"Superior Preferred Stock" shall be amended by deleting the definition
thereof and replacing it with the following:
"'Superior Preferred Stock' shall mean the 6% Cumulative Preferred
Stock, par value $1.00 per share, of the Borrower having an
aggregate liquidation preference of $20,000,000 (but shall include
any Parent preferred stock issued in exchange therefor pursuant to
clause (3)(y) of Section 6.02(b))."
"Superior Telecommunications" shall be amended by deleting the definition
thereof and replacing it with the following:
"'Superior Telecommunications' shall mean Superior
Telecommunications Inc., a Georgia corporation and Wholly-Owned
Subsidiary of the Borrower, and after the Borrower Merger shall mean
Superior Telecommunications Inc., a Delaware corporation."
SECTION TWO - REPRESENTATIONS AND WARRANTIES
Each of the Parent, Borrower and each Guarantor hereby confirms,
reaffirms and restates the representations and warranties made by it in Section
4 of the Credit Agreement and all such representations and warranties are true
and correct in all material respects as of the date hereof (it being under-
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stood and agreed that any representation or warranty which by its terms is made
as of a specified date shall be required to be true and correct only as of such
specified date), except such representations and warranties need not be true and
correct to the extent that changes in the facts and conditions on which such
representations and warranties are based are required or permitted under the
Credit Agreement or such changes arise out of events not prohibited by the
covenants set forth in Sections 5 and 6 of the Credit Agreement or otherwise
permitted by consents or waivers. Each Credit Party, as applicable, hereby
further represents and warrants (which representations and warranties shall
survive the execution and delivery hereof) to the Agents and each Lender that:
(a) Each Credit Party has the corporate power and authority to
execute, deliver and perform this Amendment No. 1 and has taken all
corporate actions necessary to authorize the execution, delivery and
performance of this Amendment No. 1;
(b) No consent of any person other than all of the Lenders and the
Agents parties hereto, and no consent, permit, approval or authorization
of, exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority is required in connection
with the execution, delivery, performance, validity or enforceability
against any Credit Party of this Amendment No. 1;
(c) This Amendment No. 1 has been duly executed and delivered on
behalf of each Credit Party by a duly authorized officer or
attorney-in-fact of such Credit Party, and constitutes a legal, valid and
binding obligation of each Credit Party enforceable against such Credit
Party in accordance with its terms, except as such enforceability may be
limited by (a) bankruptcy, insolvency, fraudulent conveyance, preferential
transfer, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights and
remedies generally, (b) general principles of equity (whether such
enforceability is considered in a proceeding in equity or at law), and by
the discretion of the court before which any proceeding therefor may be
brought, or (c) public policy considerations or court administrative,
regulatory or other governmental decisions that may limit rights to
indemnification or contribution or limit or affect any covenants or
agreements relating to competition or future employment; and
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(d) The execution, delivery and performance of this Amendment No. 1
will not violate (i) any provision of law applicable to any Credit Party
or (ii) any contractual obligation of any Credit Party, other than such
violations that would not reasonably be expected to result in, singly or
in the aggregate, a Material Adverse Effect.
(e) The transactions specifically permitted under this Amendment No.
1 are for a proper corporate purpose.
SECTION THREE - MISCELLANEOUS
(a) Except as herein expressly amended, the Credit Agreement and all
other agreements, documents, instruments and certificates executed in connection
therewith, except as otherwise provided herein, are ratified and confirmed in
all respects and shall remain in full force and effect in accordance with their
respective terms.
(b) This Amendment No. 1 may be executed by the parties hereto in
one or more counterparts, each of which shall be an original and all of which
shall constitute one and the same agreement.
(c) THIS AMENDMENT NO. 1 SHALL BE GOVERNED BY, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICT OF LAWS.
(d) This Amendment No. 1 shall not constitute a consent or waiver to
or modification of any provision, term or condition of the Credit Agreement,
other than such terms, provisions, or conditions that are required to consummate
the transactions contemplated by this Amendment. All terms, provisions,
covenants, representations, warranties, agreements and conditions contained in
the Credit Agreement, as amended hereby, shall remain in full force and effect.
Signature Pages to Amendment No. 1
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Amendment No. 1 as of the date
first above written.
SUPERIOR/ESSEX CORP., as Borrower
By:
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Name:
Title:
SUPERIOR TELECOM INC., as Guarantor
By:
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Name:
Title:
SUPERIOR TELECOMMUNICATIONS, INC., as
Guarantor
By:
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Name:
Title:
DNE SYSTEMS, INC.,
as Guarantor
By:
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Name:
Title:
DNE MANUFACTURING & SERVICE COMPANY,
as Guarantor
By:
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Name:
Title:
DNE TECHNOLOGIES, INC.,
as Guarantor
By:
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Name:
Title:
TEXAS SUT INC.,
as Guarantor
By:
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Name:
Title:
ESSEX GROUP, INC.,
as Guarantor
By:
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Name:
Title:
ESSEX INTERNATIONAL INC.,
as Guarantor
By:
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Name:
Title:
ACTIVE INDUSTRIES, INC.,
as Guarantor
By:
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Name:
Title:
DIAMOND WIRE & CABLE CO.,
as Guarantor
By:
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Name:
Title:
ESSEX GROUP MEXICO INC.,
as Guarantor
By:
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Name:
Title:
ESSEX MEXICO HOLDINGS, L.L.C.,
as Guarantor
By:
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Name:
Title:
ESSEX SERVICES, INC.,
as Guarantor
By:
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Name:
Title:
ESSEX TECHNOLOGY, INC.,
as Guarantor
By:
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Name:
Title:
ESSEX WIRE CORPORATION,
as Guarantor
By:
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Name:
Title:
BANKERS TRUST COMPANY,
as Administrative Agent
By:
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Name:
Title:
FLEET CORPORATE FINANCE, INC.,
as Syndication Agent
By:
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Name:
Title:
FLEET CORPORATE FINANCE, INC.,
as Lender
By:
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Name:
Title:
BANKERS TRUST COMPANY,
as Lender
By:
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Name:
Title: