THIRD AMENDMENT TO LEASE AGREEMENT
THIS THIRD AMENDMENT TO LEASE AGREEMENT (this "Amendment"), dated as
of October 2, 1996, between ALP (TX) QRS 11-28, INC., a Texas corporation
("Landlord"), and SUPERIOR TELECOMMUNICATIONS INC., a Georgia corporation f/k/a
Superior Teletec, Inc. and Superior TeleTec Transmission Products, Inc.
("Tenant").
W I T N E S S E T H
WHEREAS, Landlord and Tenant have entered into that certain Lease
Agreement, dated as of December 16, 1993, as amended by a First Amendment to
Lease Agreement, dated as of May 10, 1995, and a Second Amendment (the "Second
Amendment") to Lease Agreement, dated as of July 21, 1995 (as amended, the
"Lease");
WHEREAS, the parties hereto are entering into this Amendment
concurrently with the closing of the Revolving Credit Agreement by and among
Superior TeleCom Inc. ("TeleCom"), each subsidiary of TeleCom (including
Tenant), certain lending institutions and Bankers Trust Company dated as of
October 2, 1996 (as the same may be amended, the "BT Loan Agreement"); and
WHEREAS, the parties hereto have agreed to amend the Lease as
hereinafter set forth.
NOW, THEREFORE, intending to be legally bound and for good valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto covenant and agree as follows:
1. DEFINITIONS. (a) Capitalized terms used herein and in Annex A
hereto and not otherwise defined shall have the meanings assigned to them in the
Lease.
(b) The definition of "Guarantor" is hereby
amended by adding thereto "and Superior TeleCom Inc., jointly and severally,"
after the word "Corporation" in the second line thereof; and
(c) The definition of "Guaranty" is hereby amended
by adding the phrase "as the same may be amended from time to time" after the
work "Landlord" in the second line thereof.
2. WAIVER. Landlord hereby waives compliance by Tenant with
Financial Covenants contained in the Second Amendment in connection with the
occurrence of the transactions substantially as described on Annex A attached
hereto, including such other
transactions as may be incidental to, necessary, or desirable to give effect to
such transactions. such transactions.
3. FINANCIAL COVENANTS. The Lease is hereby amended by deleting the
Financial Covenants attached to the Second Amendment as Exhibit E and inserting
the Financial Covenants attached hereto as Exhibit E in lieu thereof.
4. EVENTS OF DEFAULT. The Lease is hereby amended by replacing the
words "Tenant shall breach any covenant" in clause (vii) of Paragraph 22(a) with
the words "Tenant shall breach any Covenant or Superior TeleCom Inc. shall
breach any covenant contained in the Guaranty."
5. REPRESENTATION. Tenant represents to Landlord that its leasehold
interest in the Premises is free and clear of any mortgage, lien, security
interest or encumbrance of any kind held by Nomura International Trust Company.
6. SUCCESSORS AND ASSIGNS. Except as specifically amended by this
Amendment, the terms and conditions of the Lease shall remain in full force and
effect and shall be binding upon Landlord and Tenant and their respective
successors and assigns.
7. GOVERNING LAW. This Amendment shall be governed by and construed
in accordance with the laws of the State of Texas.
8. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed shall be deemed an original, but all such counterparts
shall constitute but one and the same instrument.
[Signature Page to Third Amendment to Lease Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
ATTEST ALP (TX) QRS 11-28, INC.
By:/s/Xxxx Xxxxxxx By:/s/Xxxxxx X. Xxxxxxx
Title: Title: Vice President
ATTEST SUPERIOR TELECOMMUNICATIONS INC.
By:/s/Xxxxxxx X. Xxxxxxxxx By:Bragi X. Xxxxx
Title: Secretary Title: Senior Vice President
ANNEX A
DESCRIPTION OF TRANSACTIONS
- Guarantor will contribute the stock of its subsidiaries, Tenant
and DNE Systems, Inc. ("DNE") to a new subsidiary, Superior TeleCom Inc.
("Superior TeleCom").
- In connection with the foregoing reorganization, Guarantor will
cause Tenant, DNE and/or Superior TeleCom to declare a dividend or dividends on
its common stock, or otherwise make a distribution to Guarantor as described
further below, and permit Guarantor to recapitalize Tenant, as a result of which
the Company would own all the outstanding common stock of Superior TeleCom and
shares of a new series of preferred stock of Tenant having a liquidation value
of approximately $20,000,000.
- The payment by Tenant, DNE and/or Superior TeleCom to Guarantor
of an aggregate of $205 million, consisting of the repayment by Tenant of
existing intercompany debt owed to the Guarantor, which was $102.9 million as of
July 28, 1996, net of amounts owed by Guarantor to Tenant, and the balance by
payment of a dividend or dividends to be declared or equivalent distribution to
be made in connection with the recapitalization described above.
- The sale by Superior TeleCom of up to 49.9% (approximately 53.4%
if the underwriters exercise their over-allotment option) of its common stock to
the public in a registered public offering (the "IPO"). If, in connection with
the public offering, the underwriters exercise their over-allotment option, the
proceeds of such exercise would be used to redeem a portion of the preferred
stock described above, and Guarantor then would be entitled to use the proceeds
thereof to restore its ownership of Superior TeleCom to 50.1% through open
market purchases of Superior TeleCom common stock.
- Superior TeleCom has obtained a commitment from Bankers Trust
Company and Bank of Boston with respect to the provision of a $175.0 million
revolving credit facility (the "Bank Financing"). Superior TeleCom will
complete an initial borrowing of approximately $154.7 million under the Bank
Financing and will distribute approximately $151.7 million to the Company to
complete the reorganization and the purchase of Notes.
Under the Bank Financing, Superior TeleCom initially will be
permitted to have outstanding revolving credit loans of up to $175.0 million.
However, if Superior TeleCom completes a public offering of its common stock as
described above (on terms and conditions set forth in the Bank Financing), the
amount of the facility will be reduced to $150.0 million. Superior TeleCom also
will be required to reduce the commitments by $30.0 million ($25.0 million if
the commitment amount is reduced to $150.0 million as described above) in each
of 1999 and 2000, and the facility will terminate in 2001. Loans under the Bank
Financing will be based on either a LIBOR rate or the base rate of Bankers
Trust, in each case plus a margin. The facility will be secured by
substantially all of the assets of
Superior TeleCom and its subsidiaries, including Tenant. The stock of Tenant
will be pledged to the lenders as security for the Bank Financing.
- Guarantor will effect an amendment to the indenture relating to
its 12-1/4% Series B Senior Secured Notes due 2003 and, in connection therewith,
complete a tender offer for at least 50% of the outstanding aggregate amount of
such notes.
- Guarantor will enter into a Services Agreement, a Tax
Indemnification Agreement and a Tax Sharing Agreement with Superior TeleCom and
such other related party transactions as are described in the preliminary and in
any final prospectus contained in the registration statement filed with the
Securities and Exchange Commission relating to the IPO.
