Exhibit 10(aa)
AMENDMENT NUMBER ONE, dated as of December 31, 1998
("Amendment"), to the Amended and Restated Credit Agreement dated as of November
27, 1998 (the "Credit Agreement"), among SUPERIOR/ESSEX CORP., a Delaware
corporation (the "Company"), ESSEX GROUP INC., a Michigan corporation ("Essex"
and, together with the Company, the "Borrowers"), each of the Guarantors party
thereto (the "Guarantors") (which Guarantors shall include Superior TeleCom
Inc., a Delaware corporation (the "Parent")), the lending institutions from time
to time party thereto (each a "Lender" and collectively, the "Lenders"), BANKERS
TRUST COMPANY, as Administrative Agent, XXXXXXX XXXXX & CO., as Documentation
Agent and FLEET NATIONAL BANK, as Syndication Agent (the "Agents"). Capitalized
terms used and not otherwise defined herein shall have the meanings assigned to
them in the Credit Agreement.
WHEREAS, the Parent intends to change its fiscal year end to
December 31; and
WHEREAS, in connection with the foregoing the Borrowers have
requested that the Agents and the Lenders amend and waive certain provisions of
the Credit Agreement; and
WHEREAS, the Agents and the Lenders have considered and agreed to
the Borrowers' requests, upon the terms and conditions set forth in this
Amendment; and
WHEREAS, the consent of the Required Lenders is necessary to
effect this Amendment;
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:
SECTION ONE - AMENDMENT
The Credit Agreement is amended as hereinafter provided in this
Section One, effective as of December 31, 1998 (the "Amendment Effective Date").
1.1. AMENDMENTS TO SECTION 4 (PAYMENTS)_OF THE CREDIT AGREEMENT.
(a) Section 4.02(b) shall be amended by deleting the text thereof in its
entirety and replacing it with the following:
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"(b) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the
Borrowers shall be required to repay that principal amount of Tranche A Term
Loans, to the extent then outstanding, as is set forth opposite such date (each
such repayment, as the same may be reduced as provided in Sections 4.01 and
4.02(i), a "Tranche A Term Loan Scheduled Repayment," and each such date, a
"Tranche A Term Loan Scheduled Repayment Date"):
Tranche A Term Loan Scheduled Repayment Date Amount
-------------------------------------------- ------
Quarterly Payment Date in March 1999 $10,500,000
Quarterly Payment Date in June 1999 10,500,000
Quarterly Payment Date in September 1999 10,500,000
Quarterly Payment Date in December 1999 17,125,000
Quarterly Payment Date in March 2000 17,125,000
Quarterly Payment Date in June 2000 17,125,000
Quarterly Payment Date in September 2000 17,125,000
Quarterly Payment Date in December 2000 18,750,000
Quarterly Payment Date in March 2001 18,750,000
Quarterly Payment Date in June 2001 18,750,000
Quarterly Payment Date in September 2001 18,750,000
Quarterly Payment Date in December 2001 18,750,000
Quarterly Payment Date in March 2002 18,750,000
Quarterly Payment Date in June 2002 18,750,000
Quarterly Payment Date in September 2002 18,750,000
Quarterly Payment Date in December 2002 25,000,000
Quarterly Payment Date in March 2003 25,000,000
Quarterly Payment Date in June 2003 25,000,000
Quarterly Payment Date in September 2003 25,000,000
Quarterly Payment Date in December 2003 75,000,000
May 27, 2004 75,000,000"
(b) Section 4.02(c) shall be amended by deleting the text thereof in its
entirety and replacing it with the following:
"(c) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the
Borrowers shall be required to repay that principal amount of Tranche B Term
Loans, to the extent then outstanding, as is set forth opposite such date (each
such repayment, as the same may be reduced as provided in Sections 4.01 and
4.02(i), a "Tranche B Term Loan Scheduled Repay
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ment," and each such date, a "Tranche B Term Loan Scheduled Repayment Date"):
Tranche B Term Loan Scheduled Repayment Date Amount
-------------------------------------------- ------
Quarterly Payment Date in March 1999 $1,214,286
Quarterly Payment Date in June 1999 1,214,286
Quarterly Payment Date in September 1999 1,214,286
Quarterly Payment Date in December 1999 1,214,286
Quarterly Payment Date in March 2000 1,214,286
Quarterly Payment Date in June 2000 1,214,286
Quarterly Payment Date in September 2000 1,214,286
Quarterly Payment Date in December 2000 1,062,500
Quarterly Payment Date in March 2001 1,062,500
Quarterly Payment Date in June 2001 1,062,500
Quarterly Payment Date in September 2001 1,062,500
Quarterly Payment Date in December 2001 1,062,500
Quarterly Payment Date in March 2002 1,062,500
Quarterly Payment Date in June 2002 1,062,500
Quarterly Payment Date in September 2002 1,062,500
Quarterly Payment Date in December 2002 1,062,500
Quarterly Payment Date in March 2003 1,062,500
Quarterly Payment Date in June 2003 1,062,500
Quarterly Payment Date in September 2003 1,062,500
Quarterly Payment Date in December 2003 37,187,500
Quarterly Payment Date in March 2004 37,187,500
Quarterly Payment Date in June 2004 37,187,500
Quarterly Payment Date in September 2004 37,187,500
Quarterly Payment Date in December 2004 63,750,000
Quarterly Payment Date in March 2005 63,750,000
Quarterly Payment Date in June 2005 63,750,000
November 27, 2005 63,750,000"
1.2. AMENDMENT TO SECTION 7 (AFFIRMATIVE COVENANTS) OF THE CREDIT AGREEMENT.
(a) Section 7.10 shall be amended by deleting the text thereof in its
entirety and replacing it with the following:
"7.10. END OF FISCAL YEARS; FISCAL QUARTERS. The Parent will, for
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years to end on or about
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December 31st of each year and (ii) each of its, and each of its Subsidiaries',
fiscal quarters to end on or about March 31st, June 30th and September 30th of
each year; PROVIDED that the Parent may change such fiscal year to any other
fiscal year period of twelve consecutive months with the consent of the
Administrative Agent (which consent shall not unreasonably be withheld)."
1.3. AMENDMENTS TO SECTION 8 (NEGATIVE COVENANTS) OF THE CREDIT AGREEMENT
(a) Section 8.02(s) shall be amended by deleting the text thereof in its
entirety and replacing it with the following:
"(s) Investments in the Mexican Subsidiaries to fund their
development of certain manufacturing facilities in Mexico in an
aggregate amount not to exceed $80,000,000; PROVIDED that until December
31, 2000, the amount of such Investments shall not exceed $40,000,000 in
the aggregate; and PROVIDED, FURTHER, that such amount may either be
funded (A) through Indebtedness incurred by the Mexican Subsidiaries or
(B) through intercompany loans, on terms reasonably acceptable to the
Administrative Agent, PROVIDED that (i) such intercompany loans shall be
secured, on terms reasonably acceptable to the Administrative Agent,
with all of the assets of the Mexican Subsidiaries, including those
contemplated to be built or constructed; (ii) the Mexican Subsidiaries
shall become Guarantors (it being understood that such Guaranty is
subject to the last sentence of Section 8.14) and (iii) such secured
intercompany loans are pledged to the Administrative Agent, on behalf of
the Lenders, on terms acceptable to the Administrative Agent or (C)
through the investment of up to $16,000,000 of equity or other similar
contributions, or (D) through a combination of (A), (B) and (C); and"
(b) Section 8.08(a) shall be amended by deleting the text thereof in its
entirety and replacing it with the following:
"8.08. CAPITAL EXPENDITURES. (a) The Company will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures during the
period set forth below in excess of the amount set forth below with respect
to such period:
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($ in millions)
Period Ending Amount:
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12/31/1999 $68.0
12/31/2000 50.1
12/31/2001 47.5
12/31/2002 50.0
12/31/2003 50.0
12/31/2004 50.0
12/31/2005 50.0"
(c) Section 8.09 shall be amended by deleting the text thereof in its
entirety and replacing it with the following:
"8.09. MINIMUM CONSOLIDATED EBITDA. The Company will not permit
Consolidated EBITDA during any Test Period set forth below to be less than
the amount set forth below with respect to such Test Period:
($ in millions)
Test Period Ending: Amount:
------------------- ---------------
01/31/1999 $ 36.0
03/31/1999 60.0
06/30/1999 130.0
09/30/1999 180.0
12/31/1999 260.0
03/31/2000 270.0
06/30/2000 280.0
09/30/2000 290.0
12/31/2000 300.0
03/31/2001 300.0
06/30/2001 310.0
09/30/2001 320.0
12/31/2001 330.0
03/31/2002 340.0
06/30/2002 350.0
09/30/2002 355.0
12/31/2002 360.0
03/31/2003 365.0
06/30/2003 370.0
09/30/2003 375.0
12/31/2003 and the 380.0
last day of each
Fiscal Quarter there-
after
"
(d) Section 8.10 shall be amended to read as follows:
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"8.10. INTEREST COVERAGE RATIO. The Company will not permit the
Interest Coverage Ratio for any Test Period set forth below to be equal to or
less than the ratio set forth below with respect to such Test Period:
Test Period Ending: Ratio:
------------------- ------
03/31/1999 1.75x
06/30/1999 1.75x
09/30/1999 1.80x
12/31/1999 1.85x
03/31/2000 1.90x
06/30/2000 1.95x
09/30/2000 2.00x
12/31/2000 2.05x
03/31/2001 2.10x
06/30/2001 2.15x
09/30/2001 2.25x
12/31/2001 2.35x
03/31/2002 2.50x
06/30/2002 2.75x
09/30/2002 3.00x
12/31/2002 3.00x
03/31/2003 3.25x
06/30/2003 3.25x
09/30/2003 3.50x
12/31/2003 and the 3.50x
last day of each
Fiscal Quarter there-
after "
(e) Section 8.11 shall be amended by deleting the text thereof in its
entirety and replacing it with the following:
"8.11. LEVERAGE RATIO. The Company will not permit the Pro Forma
Leverage Ratio at any time during the Test Period set forth below to be equal to
or more than the ratio set forth below with respect to such Test Period:
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Test Period Ending: Ratio:
------------------- ------
03/31/1999 5.50x
06/30/1999 5.50x
09/30/1999 5.25x
12/31/1999 5.25x
03/31/2000 5.10x
06/30/2000 5.00x
09/30/2000 4.75x
12/31/2000 4.50x
03/31/2001 4.50x
06/30/2001 4.25x
09/30/2001 4.00x
12/31/2001 4.00x
03/31/2002 3.75x
06/30/2002 3.50x
09/30/2002 3.25x
12/31/2002 3.25x
03/31/2003 3.00x
06/30/2003 3.00x
09/30/2003 2.75x
12/31/2003 and the 2.75x
last day of each
Fiscal Quarter there-
after "
1.4. AMENDMENTS TO SECTION 10 (DEFINITIONS) OF THE CREDIT AGREEMENT.
(a) Section 10 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
31, 1998 to this Agreement."
(b) Section 10 shall be further amended as follows:
"Excess Cash Payment Date" shall be amended by deleting the definition
thereof and replacing it with the following:
"'Excess Cash Payment Date' shall mean the date occurring 90 days
after the last day of each fiscal year of the Company (beginning with its fiscal
year ended December 31, 1999)."
"Margin Reduction Period" shall be amended by deleting the definition
thereof and replacing it with the following:
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"'Margin Reduction Period' shall mean each period which shall commence
on a date on which the financial statements are delivered pursuant to Section
7.01(b) or (c), as the case may be, and which shall end on the earlier of (i)
the date of actual delivery of the next financial statements pursuant to Section
7.01(b) or (c), as the case may be, and (ii) the latest date on which the next
financial statements are required to be delivered pursuant to Section 7.01(b) or
(c), as the case may be; PROVIDED that the first Margin Reduction Period shall
commence on the date that the financial statements are delivered for the
Company's first fiscal quarter ending March 31, 1999."
(a) "Pro Forma Leverage Ratio" shall be amended by deleting the
definition thereof and replacing it with the following:
"'Pro Forma Leverage Ratio' shall mean, at any time for the
determination thereof, the ratio of (x) Consolidated Debt at such time to (y)
Consolidated EBITDA for the Test Period then last ended, with such Pro Forma
Leverage Ratio to be determined on a PRO FORMA basis (i) in the case of a
Permitted Acquisition, as if such Permitted Acquisition (and any other Permitted
Acquisition) that occurred during such Test Period (and the incurrence,
assumption and/or repayment of any Indebtedness in connection with any such
Permitted Acquisition), as the case may be, had occurred on the first day of
such Test Period (and such Indebtedness, if any, had remained outstanding (or
had not been outstanding, as the case may be) throughout such Test Period) it
being understood that in calculating the Pro Forma Leverage Ratio in connection
with each and every Permitted Acquisition, Consolidated EBITDA shall include the
results of operations of the Person or assets acquired pursuant to each such
Permitted Acquisition on a PRO FORMA basis as if such acquisition had occurred
on the first day of the respective Test Period and (ii) in the case of the
Transaction, for the first three quarterly Test Periods for which the Pro Forma
Leverage Ratio is being tested, Consolidated EBITDA for the purpose of
determining the Pro Forma Leverage Ratio shall be calculated (x) for the first
such Test Period as the product of Consolidated EBITDA for the fiscal quarter
ending Xxxxx 00, 0000 ("Xxxxx Xxxxxxx XXXXXX") times 4, (y) for the second such
Test Period as the sum of (1) the product of First Quarter EBITDA times 2 PLUS
(2) the product of the Consolidated EBITDA for the fiscal quarter ending June
30, 1999 ("Second Quarter EBITDA") times 2, and (z) for the third such Test
Period as the product of (1) the sum of First Quarter EBIDTA PLUS Second Quarter
EBITDA PLUS Consolidated EBITDA for the fiscal quarter ending September 30, 1999
times (2) 1 1/3. On any date pursuant to which the Pro Forma Leverage Ratio is
to be calculated
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and on each date of calculation of Pro Forma Leverage Ratio, the Company shall
deliver to the Administrative Agent a certificate of the Company's chief
financial officer setting forth in reasonable detail the PRO FORMA calculations
required to establish the Pro Forma Leverage Ratio (with such PRO FORMA
calculations to be made on a basis reasonably satisfactory to the Administrative
Agent and to assume that the interest expense attributable to any Indebtedness
(whether existing or being incurred) bearing a floating interest rate shall be
computed as if the rate in effect on the date of such Permitted Acquisition
(taking into account any Interest Rate Protection Agreement applicable to such
Indebtedness if such Interest Rate Protection Agreement has a remaining term in
excess of 12 months) had been the applicable rate for the entire period). For
purposes of the Pro Forma Leverage Ratio, Consolidated Debt shall not include
the Trust Preferred Securities."
(b) "Test Period" shall be amended by deleting the definition thereof
and replacing it with the following:
"'Test Period' shall mean four consecutive fiscal quarters of the
Company (taken as one accounting period) ended, in the case of any determination
of Interest Reduction Discount, on the last day of each fiscal quarter or fiscal
year of the Company and, in all other cases, ended on the date indicated in the
applicable Section hereof; PROVIDED, with respect to the Test Periods ending
prior to March 31, 2000, Consolidated EBITDA and the Interest Coverage Ratio
shall be measured in accordance with the actual results for the period from
November 1, 1998 through such last day of such Test Period."
SECTION TWO - REPRESENTATIONS AND WARRANTIES
The Company and Essex each hereby confirms, reaffirms and
restates the representations and warranties made by it in Section 6 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 understood 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 7 and 8 of the Credit Agreement or otherwise
permitted by consents or waivers. The Company and Essex each hereby further
represents and warrants
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(which representations and warranties shall survive the execution and delivery
hereof) to the Agents and each Lender that:
(a) The Company and Essex each has the corporate power and
authority to execute, deliver and perform this Amendment and has taken
all corporate actions necessary to authorize the execution, delivery and
performance of this Amendment;
(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 the Company or Essex of this Amendment;
(c) This Amendment has been duly executed and delivered on behalf
of each of the Company and Essex by a duly authorized officer or
attorney-in-fact of the Company and Essex, as the case may be, and
constitutes a legal, valid and binding obligation of each of the Company
and Essex, as the case may be, enforceable against each of the Company
and Essex 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
(d) The execution, delivery and performance of this Amendment
will not violate (i) any provision of law applicable to the Company or
Essex or (ii) any contractual obligation of either the Company or Essex,
other than such violations that would not reasonably be expected to
result in, singly or in the aggregate, a Material Adverse Effect.
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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 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 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 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.
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Amendment as of the date first
above written.
SUPERIOR/ESSEX CORP.,
as Borrower and Guarantor
By: ____________________________
Name:
Title:
SUPERIOR TELECOM INC.,
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:
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DNE TECHNOLOGIES, INC.,
as Guarantor
By: ____________________________
Name:
Title:
TEXAS SUT INC.,
as Guarantor
By: ____________________________
Name:
Title:
ESSEX GROUP, INC.,
as Borrower and 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:
S-3
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:
S-4
BANKERS TRUST COMPANY,
as Administrative Agent
By: ____________________________
Name:
Title:
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FLEET NATIONAL BANK,
as Syndication Agent
By: ____________________________
Name:
Title:
S-6
XXXXXXX XXXXX & CO.,
as Documentation Agent
By: ____________________________
Name:
Title:
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BANKERS TRUST COMPANY,
as Lender
By: ____________________________
Name:
Title:
S-8
FLEET NATIONAL BANK,
as Lender
By: ____________________________
Name:
Title:
S-9
XXXXXXX XXXXX CAPITAL
CORPORATION, as Lender
By: ____________________________
Name:
Title:
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CRESCENT/MACH I PARTNERS, L.P.
By: TCW Asset Management Company
its Investment Manager,
as Lender
By: ____________________________
Name:
Title:
