EXHIBIT 10.63
CONSENT UNDER AND SECOND AMENDMENT TO CREDIT AND
SECURITY AGREEMENT
THIS CONSENT UNDER AND SECOND AMENDMENT TO CREDIT AND SECURITY
AGREEMENT (this "Consent and Second Amendment") is dated as of the 26th day of
May, 2004 among XXXXXX INC. (the "Parent"), BELDEN TECHNOLOGIES, INC., BELDEN
COMMUNICATIONS COMPANY and BELDEN WIRE & CABLE COMPANY (collectively with the
Parent, the "Borrowers"), WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent (the
"Agent"), and the Lenders party hereto (collectively, the "Lenders");
WITNESSETH:
WHEREAS, the Borrowers, the Agent and the Lenders executed and
delivered that certain Credit and Security Agreement, dated as of October 9,
2003 (as amended by that certain First Amendment to Credit and Security
Agreement dated May 10, 2004, the "Credit Agreement");
WHEREAS, the Borrowers have requested that the Agent and the Lenders
consent to the merger of the Parent with a subsidiary of Cable Design
Technologies Corporation ("CDT"), pursuant to the terms and conditions of the
Agreement and Plan of Merger dated as of February 4, 2004 by and among CDT, BC
Merger Corp. and the Parent, attached as Appendix 1 hereto (the "Merger
Agreement", with the merger contemplated thereunder being the "Merger");
WHEREAS, the Borrowers have requested that the Agent and the Lenders
consent to the sale of certain assets of the Parent's North American
communications wire and cable business to Superior Essex Communications LLC
("Superior"), pursuant to the terms and conditions of the Asset Purchase
Agreement dated as of March 18, 2004 by and among Superior, Belden
Communications Company and Belden (Canada) Inc., attached as Appendix 2 hereto
(the "Asset Purchase Agreement", with the asset sale contemplated thereunder
being the "Communications Sale"); and
WHEREAS, the Merger, the Communications Sale, the Merger Agreement and
the Asset Purchase Agreement require certain consents and amendments to
provisions of the Credit Agreement, and the Agent and the Lenders have agreed to
grant such consent and provide for such amendments, subject to the terms and
conditions hereof;
NOW, THEREFORE, for and in consideration of the above premises and
other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged by the parties hereto, the Borrowers, the Agent and the
Lenders hereby covenant and agree as follows:
1. Definitions. Unless otherwise specifically defined (or whose definition
is amended) above or below, which definitions will be deemed
incorporated into the Credit
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Agreement, each capitalized term used herein which is defined in the
Credit Agreement shall have the meaning assigned to such term in the
Credit Agreement.
2. Consent. Effective upon satisfaction of the conditions to effectiveness
set forth in paragraph 20 hereof, the Agent and the Lenders approve and
consent to the terms of each of the Merger and the Communications Sale
and the execution, delivery and performance of the Merger Agreement and
the Asset Purchase Agreement by the Borrowers that are parties thereto,
and the Agent and the Lenders further acknowledge that the foregoing
(i) does not breach Section 5.05 (Consolidations and Mergers) or
Section 5.31 (Dispositions of Collateral) of the Credit Agreement, and
(ii) does not constitute a "Material Adverse Effect" as defined in the
Credit Agreement.
3. Release of Liens. Effective simultaneously with the Communications
Sale, the Agent and the Lenders release and discharge any and all Liens
and security interests arising under Article 3 (Collateral) of the
Credit Agreement, and any and all Liens and security interests
otherwise granted to the Agent or the Lenders as security for any
Obligations, with respect to the personal property and other assets of
Belden Communications Company, including without limitation with
respect to the assets of Belden Communications Company described in the
first paragraph of Section 3.01 of the Credit Agreement and the
categories of assets of Belden Communications Company listed in Section
3.O 1(a)-(p) of the Credit Agreement. The Agent shall execute, deliver
and record, at or prior to the closing of the Communications Sale, all
documents and instruments necessary to evidence or carry out such
release, including without limitation UCC-3 termination statements.
4. Amendment to Certain Definitions. Effective simultaneously with the
Communications Sale, notwithstanding anything in the Credit Agreement
to the contrary, (i) the definition of "Collateral" in the Credit
Agreement, and all the defined terms in the Credit Agreement that
comprise part of the Collateral (including without limitation
"Accounts", "General Intangibles", "Inventory", "Equipment", "Goods",
"Investment Property", "Intellectual Property", "Patents", "Trademarks"
and "Copyrights"), shall no longer include any personal property or
other asset of Belden Communications Company of any nature, (ii) the
definition of "Collateral Location" in the Credit Agreement shall no
longer include any location of Belden Communications Company, and (iii)
Belden Communications Company will be considered a "Guarantor" but not
a "Borrower" under the Credit Agreement, in connection with which
Belden Communications Company will sign a Guaranty substantially in the
form of EXHIBIT S to the Credit Agreement.
5. Amendment to Section 2.15 (Lockbox: Collateral Reserve Accounts:
Control Agreements). Effective simultaneously with the Communications
Sale but subject to paragraph 9 below, the first sentence of Section
2.15(a)(ii) of the Credit Agreement is amended and restated in its
entirety as follows:
"(ii) If at any time the sum of (x) Excess Borrowing
Availability and (y) Unrestricted Cash Balances is less than
$25,000,000, the provisions of this clause (ii) shall become
applicable and shall be maintained thereafter, regardless of
subsequent changes in the sum of (x) Excess Borrowing
Availability and (y) Unrestricted Cash Balances above
$25,000,000."
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Effective simultaneously with the Communications Sale but subject to
paragraph 9 below, the second sentence of Section 2.15(a)(ii) of the
Credit Agreement is amended by replacing the words "Promptly upon
Excess Borrowing Availability becoming less than $25,000,000," at the
beginning thereof with the words "Promptly upon the sum of (x) Excess
Borrowing Availability and (y) Unrestricted Cash Balances becoming less
than $25,000,000,".
6. Amendment to Section 4.10 (Ownership of Property; Liens). Effective
simultaneously with the Communications Sale, Section 4.10 of the Credit
Agreement is amended by adding to the beginning thereof the words
"Except for Belden Communications Company,".
7. Amendment to Section 5.10 (Maintenance of Property). Effective
simultaneously with the Communications Sale, Section 5.10 of the Credit
Agreement is amended by adding to the beginning thereof the words
"Except for Belden Communications Company,".
8. Amendment to Section 5.19 (Financial Covenants). Effective
simultaneously with the Communications Sale but subject to paragraph 9
below, the first paragraph of Section 5.19 of the Credit Agreement is
amended and restated in its entirety as follows:
"SECTION 5.19 Financial Covenants. The financial covenants set
forth in this SECTION 5.19 shall be determined on a
consolidated basis and tested monthly, commencing the first
full Fiscal Month following the Closing Date, and shall be in
effect and applicable at all times, except that the covenant
set forth in subsection (a) of this SECTION 5.19 shall not be
in effect or applicable during any period in which the sum of
(x) Excess Borrowing Availability and (y) Unrestricted Cash
Balances is, or after giving effect to the making of a Loan or
the issuance of any Letter of Credit would be, greater than or
equal to $25,000,000, or on or after the Appraisal Approval
Date, $30,000,000."
9. Certain Amendments No Longer Effective. If the Agent, the Lenders and
the Borrowers shall not have executed an amendment to the Credit
Agreement substantially according to the terms and conditions set forth
on Appendix 3 hereto, together with any modifications thereto or other
provisions that are agreed to by such parties in writing (the "Third
Amendment"), within forty-five (45) days of the consummation of the
Merger, with the parties agreeing in good faith to negotiate such Third
Amendment, then the amendments to Sections 2.15(a)(ii) and 5.19 of the
Credit Agreement contained in paragraphs 5 and 8 above shall be
rescinded and the language contained in each such Sections of the
Credit Agreement shall be as originally executed.
10. Amendment to Section 6.01 (Events of Default). Section 6.01(k) of the
Credit Agreement is hereby amended by adding immediately before clause
(i) thereof the words "except for the transactions contemplated by the
Merger Agreement," and by adding to the beginning of Section 6.01(m) of
the Credit Agreement the words "except for the transactions
contemplated by the Asset Purchase Agreement".
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11. Amendment to Definition of "Special Foreign Guarantees". The definition
of "Special Foreign Guarantees" in the Credit Agreement is hereby
amended and restated in its entirety as follows:
"'Special Foreign Guarantees' shall mean Guarantees issued by
Wachovia or an Affiliate thereof for the benefit of Foreign
Subsidiaries of the Borrowers and Guarantors to cover (i)
customs, excise and similar taxes in the United Kingdom, (ii)
overdraft protection in connection with certain Canadian
Deposit Accounts and (iii) other business purposes requested
by the Borrowers and Guarantors for the benefit of Foreign
Subsidiaries."
12. Representations and Warranties. The Borrowers hereby restate and renew
each and every representation and warranty heretofore made by them in
Article 4 of the Credit Agreement (as amended by this Consent and
Second Amendment), as fully as if made on the date hereof (except where
reference is made to a specific date). Each of the Borrowers represents
and warrants to the Agent and the Lenders that the Merger and the
documentation related thereto have not and will not trigger any
acceleration, default, mandatory redemption, or put rights under the
Senior Notes, the Senior Note Purchase Agreements, the CDT Debentures
(other than, with respect to such debentures, the conversion of such
debentures to equity), or, in any material respect, any of the other
existing indebtedness of the Borrowers or the Guarantors or any of the
other existing indebtedness of CDT in a manner that would be reasonably
likely to result in a Material Adverse Effect, or result in the
imposition of any Lien on any of their respective assets (or the assets
of any of their respective subsidiaries) except in favor of the Agent
and the Lenders. "CDT Debentures" shall mean the 4.00% Convertible
Subordinated Debentures due July 15, 2023 of Cable Design Technologies
Corporation.
13. Effect of Consent and Second Amendment. Except as set forth expressly
hereinabove, all terms of the Credit Agreement and the other Credit
Documents shall be and remain in full force and effect, and shall
constitute the legal, valid, binding and enforceable obligations of the
Borrowers and the Guarantors, as applicable. The consent set forth in
Section 2 hereof shall relate only to the Merger and the Communications
Sale and to the execution, delivery and performance of the Merger
Agreement and the Asset Purchase Agreement. Subject to the terms and
provisions of this Consent and Second Amendment, the consent hereby
granted by the Agent and the Lenders shall not (i) apply to any other
past, present or future noncompliance with any provision of the Credit
Agreement or any of the other Credit Documents, (ii) impair or
otherwise adversely affect the Agent's or the Lenders' right at any
time to exercise any right or remedy in connection with the Credit
Agreement or any of the other Credit Documents, or (iii) amend, modify
or otherwise alter any other provision of the Credit Agreement or any
of the other Credit Documents, or constitute any course of dealing or
other basis for amending, modifying or otherwise altering any other
obligations of the Borrowers or any other Person under the Credit
Agreement or any of the other Credit Documents.
14. Counterparts. This Consent and Second Amendment may be executed in any
number of counterparts and by different parties hereto in separate
counterparts and transmitted by facsimile to the other parties, each of
which when so executed and delivered by facsimile
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shall be deemed to be an original and all of which counterparts, taken
together, shall constitute but one and the same instrument.
15. Section References. Section titles and references used in this Consent
and Second Amendment shall be without substantive meaning or content of
any kind whatsoever and are not a part of the agreements among the
parties hereto evidenced hereby.
16. No Default. To induce the Agent and the Lenders to enter into this
Consent and Second Amendment and to continue to make advances pursuant
to the Credit Agreement, the Borrowers hereby acknowledge and agree
that, as of the date hereof, there exists (i) no Default or Event of
Default and (ii) no right of offset, defense, counterclaim, claim or
objection in favor of the Borrowers arising out of or with respect to
any of the Loans or other obligations of the Borrowers owed to the
Agent or the Lenders under the Credit Agreement or the obligations of
the Guarantors under the Guaranty.
17. No Novation or Mutual Departure. The Borrowers expressly acknowledge
and agree that there has not been, and this Consent and Second
Amendment does not constitute or establish, a novation with respect to
the Credit Agreement or any of the Credit Documents, or a mutual
departure from the strict terms, provisions and conditions thereof,
other than the consent and amendments set forth hereinabove.
18. Further Assurances. The Borrowers agree to take such further actions as
the Agent shall reasonably request in connection herewith to evidence
the consent and amendments herein contained.
19. Governing Law. This Consent and Second Amendment shall be governed by
and construed and interpreted in accordance with the laws of the State
of New York.
20. Conditions Precedent. This Consent and Second Amendment shall become
effective only upon (a) payment to the Agent, for the ratable benefit
of all Lenders, in immediately available funds a fully-earned and
nonrefundable amendment fee in an amount equal to .15% of the Aggregate
Commitments, which the Lenders agree is the fee payable with respect to
(collectively) the First Amendment to Credit and Security Agreement
dated as of May 10, 2004, this Consent and Second Amendment and the
Third Amendment to be executed, (b) the receipt by the Agent of a
Borrowing Base Certificate as of the end of the Borrowers' accounting
month of April reflecting (on a pro forma basis) the completion of the
Communications Sale (even though such completion is not anticipated to
occur until after such time) and indicating that Working Capital
Obligations do not exceed the aggregate amount of the Borrowing Base,
and (c) execution and delivery by facsimile to counsel for the Agent,
Xxxxx X. Xxxxx, Xxxxx Day, facsimile no. 404-581-8330, of (i) a
signature page to this Consent and Second Amendment by the Borrowers,
the Agent and the Lenders, and (ii} a signature page of the Consent and
Reaffirmation of Guarantors at the end hereof by the Guarantors.
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IN WITNESS WHEREOF, the Borrowers, the Agent and each of the Lenders
has caused this Consent and Second Amendment to be duly executed, under seal, by
its duly authorized officer as of the day and year first above written.
XXXXXX INC.
By: /s/ XXXXXXX X. XXXXX
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Title: Vice President, Finance and CFO
XXXXXX TECHNOLOGIES, INC.
By: /s/ XXXXXXX X. XXXXX
----------------------------------------
Title: Vice President
BELDEN COMMUNICATIONS COMPANY
By: /s/ XXXXXXX X. XXXXX
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Title: Vice President
BELDEN WIRE & CABLE COMPANY
By: /s/ XXXXXXX X. XXXXX
----------------------------------------
Title: Vice President
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WACHOVIA BANK, NATIONAL ASSOCIATION,
as Agent and as a Lender
By: /s/
----------------------------------------
Title: Director
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U.S. BANK NATIONAL ASSOCIATION,
as Syndication Agent and as a Lender
BY: /s/ XXXXXXX X. XXXXXX
---------------------------------
Title: Vice President
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COMERICA BANK,
as a Lender
By: /s/
---------------------------
Title: CBO
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THE NORTHERN TRUST COMPANY,
as a Lender
By: /s/ XXXXXXXX X. XXXXXXXXX
---------------------------
Title: Vice President
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ING BANK N.V,
as a Lender
By: /s/ MR. L. F. L. M. OP DE COUL
------------------------------------------------------
Title: Lead Cashmanagement
By: /s/ MR. P. A. Y. VAN VUCCREN
------------------------------------------------------
Title: Director Department Companies and Institutions
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FIFTH THIRD BANK, INDIANA,
as a Lender
By: /s/
----------------------------
Title:
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CONSENT AND REAFFIRMATION OF GUARANTORS
Each of the undersigned (i) acknowledges receipt of the foregoing
Consent and Second Amendment, (ii) consents to the execution and delivery of
the Consent and Second Amendment by the parties thereto add (iii) reaffirms
all of its obligations and covenants under the Guaranty dated as of October
9,2003 executed by it, and agrees that none of such obIigations and cavenants
shall be affected by the execution and delivery of the Consent and Second
Amendment. This Consent and Reaffirmation may be executed in any number of
counterparts and by different parties hereto in separate counterparts and
transmitted by facsimile to the other parties, each of which when so
executed and delivered by facsimile shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same
instrument.
BELDEN HOLDINGS, INC.
By: /s/ XXXXXXX X. XXXXX
----------------------------
Title: Vice President
BELDEN INTERNATIONAL, INC.
By: /s/ XXXXXXX X. XXXXX
----------------------------
Title: Vice President
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APPENDIX 1
[AGREEMENT AND PLAN OF MERGER TO BE ATTACHED]
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APPENDIX 2
[ASSET PURCHASE AGREEMENT TO BE ATTACHED]
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APPENDIX 3
THIRD AMENDMENT TERMS AND CONDITIONS
1. The following definitions will be revised or added:
a. "Parent" will be revised to mean Xxxxxx CDT Inc., and its
successors and permitted assigns.
b. "Borrowers" will be revised to mean, individually and
collectively, as the context requires, each of the following
Persons, each of them being jointly and severally obligated as
Borrowers under the Credit Agreement: (a) Xxxxxx CDT Inc.,
Xxxxxx Inc., Belden Technologies, Inc., Belden Wire & Cable
Company and Cable Design Technologies Inc.; and (b) in the
case of each Borrower, its successors and its permitted
assigns.
c. "Consolidated Fixed Charges" and "Fixed Charge Coverage Ratio"
will be revised to indicate that the calculations involved
during the 12 Fiscal Month period after the Merger shall be
determined, for any date of calculation during such period,
using the first Fiscal Month after the Merger through and
including the Fiscal Month prior to the date of calculation;
at the end of the 12 Fiscal Month period after the Merger,
such calculations shall be as provided in the existing Credit
Agreement.
d. A new definition of "CDT Group" will be inserted which will
include the Parent (i.e. Xxxxxx CDT Inc.) and all of the U.S.
subsidiaries of the Parent other than Xxxxxx Inc. and its
U.S. subsidiaries.
e. A new definition of the "CDT Debentures" will be inserted.
2. Each member of the CDT Group, other than the Parent and Cable Design
Technologies Inc. (which will Borrowers), will execute and deliver a
Subsidiary Guaranty and Joinder Agreement in the form of Exhibit T,
thereby becoming "Guarantors" under the Credit Agreement.
3. The following sections of the Credit Agreement will be revised as
noted:
a. Section 5.16 Restricted Payments and Investments and
Acquisitions will be revised so that the dividend restriction
will be increased to $12,000,000 annually.
b. Section 5.20 Permitted Debt - The CDT Debentures will be added
as permitted debt.
c. Section 5.29 Appraisals; Field Examinations. Field
examinations in accordance with Section 5.29 of the Credit
Agreement will be required on an annual basis.
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However, the frequency of such examinations in the future
shall be modified in the Agent's commercially reasonable
judgment.
4. Notwithstanding anything in the Credit Agreement to the contrary, for
purposes of Article 4, Article 5 and Section 6.01 of the Credit
Agreement only, the definition of "Collateral" in the Credit Agreement,
and all defined terms in the Credit Agreement that comprise part of the
Collateral (including without limitation "Accounts", "General
Intangibles", "Inventory", "Equipment", "Goods", "Investment
Property", "Intellectual Property", "Patents", "Trademarks" and
"Copyrights"), shall not include any personal property or other asset
of any nature of any CDT Group entity; and the definition of
"Collateral Location" in the Credit Agreement shall not include any
location of any CDT Group entity. Further, the covenant in Section 5.17
(Permitted Liens) of the Credit Agreement shall additionally exclude
any Lien on any assets of any CDT Group entity existing at the time of
the Merger and not created in contemplation of the Merger. However, no
personal property or other asset of any CDT Group entity will be
included in the Borrowing Base except as provided in paragraph 5 below.
5. After the signing of the Third Amendment, the Borrowers may elect to
include personal property and other assets of specified CDT Group
entities (or specified operating divisions of such entities) into the
Borrowing Base in accordance with the terms of the Credit Agreement, in
which event (i) such personal property and other assets will become
subject to the provisions of the Credit Agreement from which they had
been excluded under the first sentence of paragraph 4 above, (ii)
supplemental disclosures under Articles 4 and 5 of the Credit Agreement
(whether or not the wording thereof permits such supplemental
disclosures) will be mutually negotiated in good faith by the parties,
and (iii) subject to the Credit Agreement, such personal property and
other assets will be subject to the reasonably satisfactory completion
of necessary field exams and any other investigations deemed necessary
in the Agent's reasonable credit judgment.
6. With respect to the CDT Group and as necessary or appropriate due to
including the CDT Group in the Credit Agreement as provided by
paragraphs 1 and 2 above: (i) supplemental disclosures under Articles 4
and 5 of the Credit Agreement (whether or not the wording thereof
permits such supplemental disclosures) will be mutually negotiated in
good faith by the parties, and (ii) other appropriate changes to the
terms and conditions of Article 1, Article 4, Article 5 and Section
6.01 of the Credit Agreement will be mutually negotiated in good faith
by the parties.
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