<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 17, 1995
REGISTRATION NO. 33-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
THE ALPINE GROUP, INC.
(and Certain Subsidiaries Identified in Footnote (1) Below)
(Exact name of Co-Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 6719 22-1620387
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of Industrial Identification
incorporation or Classification Code Number) No.)
organization)
</TABLE>
1790 BROADWAY
NEW YORK, NEW YORK 10019
(212) 757-3333
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
BRAGI F. SCHUT
THE ALPINE GROUP, INC.
1790 BROADWAY
NEW YORK, NEW YORK 10019
(212) 757-3333
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------------------
COPIES TO:
Henry O. Smith III, Esq.
Proskauer Rose Goetz & Mendelsohn LLP
1585 Broadway, New York, New York 10036
(212) 969-3000
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVENESS OF THIS REGISTRATION STATEMENT.
--------------------------
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
OFFERING PRICE AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE PER OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED UNIT (2) PRICE (2) FEE
<S> <C> <C> <C> <C>
12 1/4% Series B Senior Secured
Notes due 2003................... $153,000,000 91.50% $139,999,500 $48,276
Senior Subordinated
Guarantees (3)................... -- -- -- --
</TABLE>
(1) The following direct subsidiaries of The Alpine Group, Inc. are
Co-Registrants, incorporated in the state (or province) and having the
I.R.S. Employer Identification number (or similar foreign taxpayer
identification number) indicated: Adience, Inc., a Delaware corporation
(14-1671486), Superior Telecommunications, Inc., a Georgia corporation
(58-1630822), and Superior Cable Corporation, an Ontario, Canada corporation
(140446584RT).
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f) under the Securities Act of 1933.
(3) The 12 1/4% Series B Senior Secured Notes due 2003 are unconditionally
guaranteed on a senior unsecured basis. No additional consideration will be
paid in respect of these guarantees.
--------------------------
THE CO-REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE CO-REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
THE ALPINE GROUP, INC.
CROSS REFERENCE SHEET TO FORM S-4
PART I. INFORMATION REQUIRED IN THE PROSPECTUS
<TABLE>
<CAPTION>
ITEM OF FORM S-4 CAPTION IN PROSPECTUS
----------------------------------------------------- -----------------------------------------------------
<S> <C> <C>
A. INFORMATION ABOUT THE TRANSACTION
1. Forepart of Registration Statement and Outside Front
Cover Page of Prospectus............................. Facing Page; Cross Reference Sheet; Outside Front
Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages of
Prospectus........................................... Table of Contents; Available Information;
Incorporation of Certain Documents by Reference
3. Risk Factors, Ratio of Earnings to Fixed Charges and
Other Information.................................... Summary; Risk Factors; Selected Historical Financial
Data of Alpine
4. Terms of the Transaction............................. The Exchange Offer; Description of the Notes; Certain
U.S. Federal Income Tax Consequences
5. Pro Forma Financial Information...................... Summary -- Summary Historical and Unaudited Pro Forma
Financial Information; Incorporation of Certain
Documents by Reference
6. Material Contacts with the Company Being Acquired.... Not Applicable
7. Additional Information Required for Reoffering by
Persons and Parties Deemed to be Underwriters........ Plan of Distribution
8. Interests of Named Experts and Counsel............... Not Applicable
9. Disclosure of Commission Position on Indemnification
for Securities Act Liabilities....................... Not Applicable
B. INFORMATION ABOUT THE REGISTRANTS
10. Information with Respect to S-3 Registrants.......... Not Applicable
11. Incorporation of Certain Information by Reference.... Not Applicable
12. Information with Respect to S-2 or S-3 Registrants... Incorporation of Certain Documents by Reference
13. Incorporation of Certain Information by Reference.... Incorporation of Certain Documents by Reference
14. Information with Respect to Registrants Other Than
S-3 or S-2 Registrants............................... Not Applicable
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ITEM OF FORM S-4 CAPTION IN PROSPECTUS
----------------------------------------------------- -----------------------------------------------------
C. INFORMATION ABOUT THE COMPANY BEING ACQUIRED
<S> <C> <C>
15. Information with Respect to S-3 Companies............ Not Applicable
16. Information with Respect to S-2 or S-3 Companies..... Not Applicable
17. Information with Respect to Companies Other Than S-3
or S-2 Companies..................................... Not Applicable
D. VOTING AND MANAGEMENT INFORMATION
18. Information if Proxies, Consents or Authorizations
are to be Solicited.................................. Not Applicable
19. Information if Proxies, Consents or Authorizations
are not to be Solicited or in an Exchange Offer...... Incorporation of Certain Documents by Reference
</TABLE>
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
SUBJECT TO COMPLETION, DATED AUGUST 17, 1995
OFFER TO EXCHANGE
ALL OUTSTANDING
12 1/4% SENIOR SECURED NOTES
DUE 2003
($153,000,000 PRINCIPAL AMOUNT OUTSTANDING)
FOR
12 1/4% SERIES B SENIOR SECURED NOTES
DUE 2003
OF
THE ALPINE GROUP, INC.
--------
THE EXCHANGE OFFER
WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 1995, UNLESS EXTENDED
-------------------
The Alpine Group, Inc., a Delaware corporation ("Alpine") and its
subsidiaries, Superior Telecommunications, Inc., Superior Cable Corporation and
Adience, Inc. (the "Co-Offerors"), hereby offer, upon the terms and subject to
the conditions set forth in this Prospectus and the accompanying letter of
transmittal (the "Letter of Transmittal," and together with this Prospectus, the
"Exchange Offer"), to exchange $1,000 principal amount of 12 1/4% Series B
Senior Secured Notes due 2003 of Alpine (the "New Notes"), which have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to a Registration Statement (as defined herein) of which this
Prospectus constitutes a part, for each $1,000 principal amount of the
outstanding 12 1/4% Senior Secured Notes due 2003 of Alpine (the "Old Notes"),
of which $153,000,000 principal amount is outstanding. The New Notes and the Old
Notes are collectively referred to herein as the "Notes."
Alpine and the Co-Offerors will accept for exchange any and all Old Notes
that are validly tendered on or prior to 5:00 p.m., New York City time, on the
date the Exchange Offer expires, which will be , 1995, unless the
Exchange Offer is extended (the "Expiration Date"). Tenders of Old Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the business
day prior to the Expiration Date, unless previously accepted for payment. The
Exchange Offer is not conditioned upon any minimum principal amount of Old Notes
being tendered for exchange. However, the Exchange Offer is subject to certain
conditions which may be waived by Alpine and the Co-Offerors and to the terms
and provisions of the Registration Rights Agreement (as defined herein). See
"The Exchange Offer." Old Notes may be tendered only in denominations of $1,000
and integral multiples thereof. Alpine has agreed to pay the expenses of the
Exchange Offer.
The New Notes will be senior secured obligations of Alpine entitled to the
benefits of the Indenture (as defined herein) relating to the Old Notes. Except
as otherwise described herein, the New Notes will be unconditionally guaranteed
on a senior unsecured basis pursuant to subsidiary guarantees by certain of
Alpine's subsidiaries. The form and terms of the New Notes are identical in all
material respects to the form and terms of the Old Notes except that the New
Notes have been registered under the Securities Act. Following the completion of
the Exchange Offer, none of the Notes will be entitled to the benefits of the
provisions of the Registration Rights Agreement relating to contingent increases
in the interest rates provided for pursuant thereto. See "The Exchange Offer."
SEE "RISK FACTORS" BEGINNING ON PAGE 18 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------
The date of this Prospectus is , 1995.
<PAGE>
Interest on each New Note will accrue from the last Interest Payment Date
(as defined herein) on which interest was paid on the Old Note tendered in
exchange therefor or, if no interest has been paid on such tendered Old Note,
from July 21, 1995. Holders of Old Notes whose Old Notes are accepted for
exchange will be deemed to have waived the right to receive any payment in
respect of interest on the Old Notes accrued from the last Interest Payment Date
or July 21, 1995 (as the case may be) to the date of the issuance of the New
Notes. Interest on the New Notes is payable semi-annually on January 15 and July
15 of each year, accruing from the last Interest Payment Date or July 21, 1995
(as the case may be) at a rate of 12 1/4% per annum.
The Notes are redeemable at the option of Alpine, in whole or in part, at
any time on or after July 15, 1999, at the redemption prices set forth herein.
Old Notes initially purchased by Qualified Institutional Buyers (as defined
in Rule 144A under the Securities Act) were initially represented by a single,
global Note in registered form, registered in the name of a nominee of The
Depository Trust Company ("DTC"), as depositary. The New Notes exchanged for Old
Notes represented by the global Note will be represented by a single, global New
Note in registered form, registered in the name of the nominee of DTC, unless
the beneficial holders thereof request otherwise. The global New Note will be
exchangeable, upon 10 days' prior written notice, for New Notes in registered
form, in denominations of $1,000 and integral multiples thereof. See
"Description of the New Notes--Book-Entry Delivery and Form."
The Old Notes rank, and the New Notes and, except as described herein, the
subsidiary guarantees, will rank, PARI PASSU in right of payment with other
senior debt of Alpine and the subsidiary guarantors. As of April 30, 1995, on a
pro forma basis after giving effect to the sale of the Old Notes, application of
the net proceeds therefrom and the other transactions described herein, Alpine
and its subsidiaries would have had $69.6 million of debt outstanding other than
the Notes, all but $0.9 million of which would have been senior debt and $67.7
million of which would have been secured debt. See "Summary--Recent
Developments; The Refinancing."
Based on an interpretation of the Securities Act by the staff of the
Securities and Exchange Commission (the "Commission") set forth in several
no-action letters to third parties, and subject to the immediately following
sentence, Alpine believes that the New Notes issued pursuant to the Exchange
Offer may be offered for resale, resold and otherwise transferred by holders
thereof without further compliance with the registration and prospectus delivery
provisions of the Securities Act. However, any purchaser of Notes who is an
"affiliate" of Alpine or who intends to participate in the Exchange Offer for
the purpose of distributing the New Notes (i) will not be able to rely on the
interpretation by the staff of the Commission set forth in the above referenced
no-action letters, (ii) will not be able to tender Old Notes in the Exchange
Offer and (iii) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale or transfer of
the New Notes, unless such sale or transfer is made pursuant to an exemption
from such requirements.
Each holder of the Old Notes who wishes to exchange Old Notes for New Notes
in the Exchange Offer will be required to make certain representations,
including that (i) any New Notes acquired pursuant to the Exchange Offer are
being obtained in the ordinary course of such holder's business, (ii) such
holder has no arrangements with any person to participate in the distribution of
such New Notes and (iii) such holder is not an "affiliate," as defined under
Rule 405 of the Securities Act of Alpine or, if such holder is an affiliate,
that such holder will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable. If the holder is
not a broker-dealer, it will be required to represent that it is not engaged in,
and does not intend to engage in, a distribution of New Notes. If the holder is
a broker-dealer (a "Participating Broker-Dealer") that will receive New Notes
for its own account in exchange for Old Notes that were acquired as a result of
market-making activities or other trading activities, it will be required to
acknowledge that it will deliver a prospectus in connection with any resale of
such New Notes; however, by so acknowledging and by delivering a prospectus,
such holder will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. The Commission has taken the position that
Participating Broker-Dealers may fulfill their prospectus delivery requirements
with respect to New Notes
2
<PAGE>
(other than a resale of an unsold allotment from the original sale of the Old
Notes) with this Prospectus. Under the Registration Rights Agreement, Alpine is
required to allow Participating Broker-Dealers and other persons, if any,
subject to similar prospectus delivery requirements to use this Prospectus in
connection with the resale of such New Notes.
Alpine will not receive any proceeds from this offering, and no underwriter
is being utilized in connection with the Exchange Offer.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL ALPINE ACCEPT SURRENDERS
FOR EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN WHICH THE
EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE
SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
The New Notes will be new securities for which there currently is no market.
Although Merrill Lynch, Pierce, Fenner & Smith Incorporated, Nomura Securities
International, Inc. and First Albany Corporation have informed Alpine that they
currently intend to make a market in the New Notes, they are not obligated to do
so, and any such market making may be discontinued at any time without notice.
Accordingly, there can be no assurance as to the development or liquidity of any
market for the New Notes. Alpine does not intend to apply for listing of the New
Notes on any securities exchange or for quotation through the National
Association of Securities Dealers Automated Quotation System.
3
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------------
<S> <C>
Available Information................................................................................ 4
Incorporation of Certain Documents by Reference...................................................... 4
Summary.............................................................................................. 6
Risk Factors......................................................................................... 18
Use of Proceeds...................................................................................... 22
The Exchange Offer................................................................................... 22
Capitalization....................................................................................... 29
Description of Certain Indebtedness.................................................................. 34
Description of the Notes............................................................................. 36
Certain U.S. Federal Income Tax Consequences......................................................... 60
Plan of Distribution................................................................................. 64
Legal Matters........................................................................................ 64
Experts.............................................................................................. 64
Index to Financial Statements........................................................................ F-1
Annual Report on Form 10-K for the fiscal year ended April 30, 1995.................................. Annex 1
</TABLE>
AVAILABLE INFORMATION
Alpine is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed by Alpine
may be inspected and copied at the public reference facilities of the Commission
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the following regional offices: Seven World Trade Center, 13th Floor, New
York, New York 10048; and Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661; and copies of such material can be obtained
from the Public Reference Section of the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Such reports,
proxy statements and other information also may be inspected at the offices of
the American Stock Exchange, 86 Trinity Place, New York, New York 10006.
This Prospectus constitutes a part of a registration statement (the
"Registration Statement") filed by Alpine and the Co-Offerors with the
Commission under the Securities Act. As permitted by the rules and regulations
of the Commission, this Prospectus does not contain all of the information
contained in the Registration Statement and the exhibits and schedules thereto
and reference is hereby made to the Registration Statement and the exhibits and
schedules thereto for further information with respect to Alpine and the
securities offered hereby. Statements contained herein concerning the provisions
of any documents filed as an exhibit to the Registration Statement or otherwise
filed with the Commission are not necessarily incomplete, and in each instance
reference is made to the copy of such document so filed. Each such statement is
qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Alpine hereby incorporates by reference into this Prospectus the following
documents filed with the Commission:
(i) Alpine's Annual Report on Form 10-K for the fiscal year ended April 30,
1995 (the "Form 10-K"). The Form 10-K is attached hereto as Annex 1.
(ii) Alpine's Current Report on Form 8-K, dated May 26, 1995, as amended by
Alpine's Current Report on Form 8-K/A, dated July 25, 1995.
4
<PAGE>
Any statement contained herein or in any documents incorporated by reference
herein shall be deemed to be modified or superseded for the purpose of this
Prospectus to the extent that a subsequent statement contained herein modifies
or supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
As used herein, unless the context otherwise requires, the term "Alpine"
refers to The Alpine Group, Inc. and its subsidiaries. The term "Consolidated
Financial Statements" refers to Alpine's Consolidated Financial Statements and
the notes thereto incorporated by reference from the Form 10-K, the term
"Management's Discussion and Analysis" refers to the Management's Discussion and
Analysis of Financial Condition and Results of Operations incorporated by
reference from the Form 10-K and the term "Pro Forma Condensed Combined
Financial Statements" refers to the Pro Forma Condensed Combined Financial
Statements incorporated by reference from the Form 10-K.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS AND THE ACCOMPANYING LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY ALPINE, THE CO-OFFERORS OR THE EXCHANGE AGENT. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR THE ACCOMPANYING LETTER OF TRANSMITTAL, OR BOTH
TOGETHER, NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF ALPINE SINCE THE
DATE HEREOF. NEITHER THIS PROSPECTUS NOR THE ACCOMPANYING LETTER OF TRANSMITTAL,
OR BOTH TOGETHER, CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY OF THE SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
5
<PAGE>
SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY AND SHOULD BE READ IN
CONJUNCTION WITH THE MORE DETAILED INFORMATION AND FINANCIAL STATEMENTS (AND
NOTES THERETO) INCLUDED AND INCORPORATED BY REFERENCE ELSEWHERE IN THIS
PROSPECTUS. TERMS DEFINED IN THIS SUMMARY HAVE THE SAME MEANINGS WHEN USED
ELSEWHERE IN THIS PROSPECTUS.
THE COMPANY
The Alpine Group, Inc. is a diversified industrial company principally
engaged in the manufacture and sale of copper wire and cable for the
telecommunications industry, specialty refractory products for the iron and
steel, aluminum and glass industries and data communications and other
electronic products for military and commercial applications. Alpine has
positioned itself as a major participant in these industries through a series of
strategic acquisitions. Alpine entered the copper wire and cable industry with
the acquisition (the "Superior Acquisition") in 1993 of Superior
Telecommunications Inc., formerly Superior TeleTec Inc. ("Superior"), the fourth
largest North American manufacturer of telephone copper wire and cable products.
In May 1995, Alpine became one of the two largest North American manufacturers
of telephone copper wire and cable products with the acquisition (the "Alcatel
Acquisition") of the U.S. and Canadian copper wire and cable business (the
"Alcatel Business") of Alcatel NA Cable Systems, Inc. and Alcatel Canada Wire,
Inc. (collectively, "Alcatel NA"). In December 1994, Alpine acquired (the
"Adience Acquisition") Adience, Inc. ("Adience"), one of the largest domestic
manufacturers and installers of specialty refractory products. Alpine entered
the data communications and electronics industry with its acquisition of DNE
Technologies, Inc. ("DNE") in February 1992.
TELECOMMUNICATIONS WIRE AND CABLE. Copper telephone wire and cable products
remain the most widely used medium for transmission in the "local loop" portion
of the telephone network. The local loop is comprised of (i) the connection
between a home or business and the nearest telephone pole or other outside
location and (ii) the connection between the telephone pole or outside location
and the nearest telephone company switch, either at the telephone company's
central office or at a remote location. While the use of optical fiber
predominates in the market for intercity and interoffice cables, use of copper
wire in the local loop continues to satisfy the telephone and data transmission
needs of a substantial majority of homes and businesses at a lower cost to
install and maintain and without the additional power source and electronics
required by optical fiber applications.
Alpine manufactures a wide variety of copper telephone cable, outside
telephone wire and inside (or premises) wire products, ranging in size from a
single twisted pair wire to a 4,200 pair cable. These products are variously
configured for use in aerial, underground and on-premise applications. During
the fiscal year ended April 30, 1995, 76% of Alpine's pro forma net sales of
telephone wire and cable products were to six of the seven regional Bell
operating companies ("RBOCs") and the three major independent telephone
companies, primarily under long-term contracts. In addition to providing copper
wire and cable for use in the local loop, Alpine has recently developed
performance-enhanced copper wire products, including unshielded twisted pair
wire ("UTP") used inside buildings for high speed data communications in
computer networks. This product is currently experiencing higher growth and is
generally sold at higher margins than traditional copper wire and cable
products.
As a result of the Alcatel Acquisition, Alpine's net sales of wire and cable
products for the fiscal year ended April 30, 1995 increased from $136.6 million
on an historical basis to $340.8 million on a pro forma basis. Based on the most
recently available data published by the U.S. Department of Commerce, Alpine
estimates that its pro forma share of the domestic production of copper
telephone cable and outside telephone wire was approximately 30% in 1993. Alpine
believes that its wire and cable business will benefit from the Alcatel
Acquisition through significant economies of scale, as well as through cost
savings from the reduction of certain freight, personnel and other costs. In
addition, Alpine's annual production capacity increased from 28 billion
conductor feet ("bcf") in one plant to 85 bcf in four plants. Alpine believes
that overcapacity in the industry, which has existed in recent years, has been
reduced as a result of the 1994 closure of a large plant operated by a
competitor and, more recently, as a result of greater demand for
6
<PAGE>
copper wire and cable products. Alpine attributes this greater demand in large
part to (i) higher levels of spending on maintenance by telephone companies to
offset their reduced maintenance levels in the early 1990s, (ii) demand for new
telephone lines resulting from new construction and (iii) demand for second
telephone lines and lines dedicated to facsimile machines and computer modems.
REFRACTORIES. Alpine is one of the largest U.S. manufacturers and
installers of specialty refractory products, which are used primarily by the
iron and steel industry, with pro forma net sales for this business of $100.9
million for the fiscal year ended April 30, 1995. Specialty refractory products
are consumable materials used as insulation on surfaces exposed to high
temperatures such as those generated by molten metals. Over the past year,
Alpine has provided refractory products and services to every integrated steel
producer in the United States and Canada and Alpine believes that it is the only
major U.S. manufacturer that provides a full range of refractory products and
installation services to the iron and steel industry. Alpine also manufactures
specialty refractory products for use in the production of aluminum and glass
and is one of the few rebuilders of coke ovens in the United States.
DATA COMMUNICATIONS AND ELECTRONICS. Alpine, through DNE, designs,
manufactures and tests data communications and other electronic products for the
military, government and commercial markets. Net sales for this business were
$27.9 million for the fiscal year ended April 30, 1995. Alpine is the largest
supplier to the U.S. military of data and voice multiplexers used in tactical
secure military applications. Multiplexers are communication devices that
combine several information carrying channels into one line, thereby permitting
simultaneous multiple voice and data communications over a single line. Alpine
also produces military avionic products, including switches, dimmers, relays and
other electrical controllers, various sensors and refueling amplifiers. Since
1993, Alpine has reduced its dependence on the military market primarily through
the development of contract manufacturing services for governmental (non-
military) and commercial customers. For the fiscal year ended April 30, 1995,
sales to customers other than the U.S. military accounted for 42.8% of the net
sales of this business.
Alpine believes that, although the copper telephone wire and cable and
refractory products industries are mature, ongoing alignment of productive
capacity with market demand, industry consolidation and Alpine's emphasis on
new, higher margin product offerings will provide Alpine with the opportunity to
strengthen its profitability, cash flow and competitive position. Alpine's
strategy in the copper wire and cable business is to continue to provide a full
line of its traditional copper wire and cable products to its present customers;
expand into performance-enhanced, higher growth and higher margin copper wire
products for sale to existing and new customers; and expand its international
marketing efforts. Alpine's strategy in the refractories business is to complete
the restructuring and rationalization of this business; expand the types of
products and services that it supplies to its existing customers; and expand its
marketing efforts in order to sell its products to new domestic and foreign
customers. Alpine's strategy in its data communications and electronics business
is to maintain its dominant position as a supplier to the military of
multiplexers used in tactical secure applications; continue to adapt its
products for commercial applications; and increase its contract manufacturing
business.
On June 14, 1995, Alpine distributed to its stockholders (the "PolyVision
Spin-Off") shares of common stock of its information display subsidiary,
PolyVision Corporation ("PolyVision") (American Stock Exchange: "PLI"). Alpine
currently owns approximately 19% of the outstanding PolyVision common stock and
98% of its preferred stock. Alpine has the right to deliver shares of PolyVision
common stock or shares of Alpine's 8% cumulative convertible senior preferred
stock ("Alpine 8% Preferred Stock"), or a combination thereof, to fulfill
certain of its obligations under the debt exchange agreement and the stock
purchase agreement entered into in connection with the Adience Acquisition. In
order to fulfill these obligations and based upon the closing price of
PolyVision common stock on August 15, 1995 of $3.50 per share, Alpine would be
required to deliver either $5.3 million in Alpine 8% Preferred Stock or 1.5
million shares of PolyVision common stock (representing substantially all of
Alpine's PolyVision shares), or a combination thereof. PolyVision manufactures
and sells custom-designed and engineered writing and projection surfaces, and is
developing a proprietary electrochemical display technology with characteristics
to address applications in markets such as flat-panel displays and certain
packaging applications. PolyVision had net sales of $37.5 million for the fiscal
year ended April 30, 1995 on a pro forma basis. Prior to the PolyVision
Spin-Off, two other Alpine subsidiaries, Alpine PolyVision,
7
<PAGE>
Inc. ("APV") and Posterloid Corporation ("Posterloid"), were merged into
subsidiaries of PolyVision (the "PolyVision Merger"). The PolyVision Merger and
the PolyVision Spin-Off are collectively referred to as the "PolyVision
Transactions."
Alpine was incorporated in New Jersey on May 7, 1957 and reincorporated in
Delaware on February 3, 1987. Its principal executive offices are located at
1790 Broadway, New York, New York 10019 and its telephone number is (212)
757-3333. Alpine's data communications and electronics business is presently
conducted by DNE. Subject to receipt of a third-party consent, Alpine proposes
to reorganize this business by creating a new holding company to be wholly owned
by Alpine, DNE Systems, Inc. ("DNE Systems"), which in turn would wholly own two
operating subsidiaries, DNE and DNE Manufacturing and Service Company ("DNE
Manufacturing" and, with DNE and DNE Systems, the "DNE Group").
RECENT DEVELOPMENTS; THE REFINANCING
On July 21, 1995, Alpine completed the private sale to Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Nomura Securities International, Inc. and
First Albany Corporation (the "Initial Purchasers") of $153.0 million principal
amount of the Old Notes at an initial price to investors of 91.737% of the
principal amount thereof, with net proceeds of approximately $134.3 million (the
"Offering"). In connection with the Offering, Alpine entered into a new bank
credit agreement (the "New Credit Agreement") with certain institutional
lenders, under which Alpine may borrow up to $85.0 million at any one time, if
certain conditions are met. Loans under the New Credit Agreement constitute
senior debt guaranteed by certain of Alpine's subsidiaries. The loans and
guarantees under the New Credit Agreement are secured primarily by the inventory
and accounts receivable of Alpine and such subsidiaries.
Alpine used the net proceeds of the Offering, together with borrowings under
the New Credit Agreement and a portion of its cash reserves, to complete the
following transactions (collectively, the "Refinancing"):
(1) On July 21, 1995, Superior repaid in full the $140.0 million aggregate
principal amount of notes (the "Alcatel Acquisition Notes") issued in May 1995
to certain institutional investors. The net proceeds of the Alcatel Acquisition
Notes ($135.4 million after the payment of certain fees and expenses) were used
as follows: (i) to pay $93.0 million in cash to Alcatel NA as part of the
purchase price for the Alcatel Acquisition; (ii) to repay borrowings under
Superior's bank credit agreement in full, which amounted to $21.9 million at
April 30, 1995 and $22.6 million at the time of repayment; (iii) to pay
acquisition expenses estimated at $0.5 million; and (iv) to pay the balance (an
estimated $19.3 million) to Superior for working capital and general corporate
purposes. Superior's existing bank credit agreement was terminated.
(2) In connection with the Alcatel Acquisition, $9.9 million of the purchase
price was paid on August 11, 1995.
(3) On July 21, 1995, Adience retired $44.1 million aggregate principal
amount of its 11% Senior Secured Notes due 2002 (the "Adience Senior Notes"),
plus accrued interest, for $36.8 million in cash (plus other non-cash
consideration) pursuant to a debt exchange agreement entered into in connection
with the Adience Acquisition in December 1994 (the "Debt Exchange Agreement")
with the holders of 89.8% of the Adience Senior Notes. The retired Adience
Senior Notes had an accreted value of $39.8 million at April 30, 1995. Adience
Senior Notes in the principal amount of $5.0 million (with an accreted value of
$4.6 million at April 30, 1995) remained outstanding as of August 15, 1995.
(4) On July 21, 1995, Adience terminated its revolving credit facility (the
"Adience Credit Facility") and repaid all amounts outstanding thereunder, which
were $12.3 million at April 30, 1995 and were $10.1 million on July 21, 1995.
(5) Alpine acquired the 12.8% of Adience's common stock not owned by Alpine
pursuant to the merger on July 21, 1995 of a wholly-owned subsidiary of Alpine
into Adience. Alpine paid $1.6 million for such shares.
8
<PAGE>
(6) In connection with Alpine's acquisition of DNE in February 1992, Alpine
issued a subordinated note to the seller (the "DNE Acquisition Note"). The DNE
Acquisition Note had a balance of $2.5 million at April 30, 1995 and was
satisfied by the payment of $2.2 million as part of the Refinancing.
(7) DNE will terminate its revolving credit facility (the "DNE Credit
Facility") and repay all amounts outstanding thereunder, which were $0.6 million
at April 30, 1995 and are expected to total $1.0 million at the time of
termination of the DNE Credit Facility.
(8) On July 21, 1995, Alpine redeemed in full its 13.5% Senior Secured Notes
due January 5, 1996 (the "Alpine 13.5% Senior Notes"). The Alpine 13.5% Senior
Notes were issued in January 1995 in the aggregate principal amount of $21.0
million and, at April 30, 1995, had an accreted value of $20.8 million.
(9) On July 21, 1995, Alpine redeemed in full its 13.5% Senior Subordinated
Debentures due October 1, 1996 (the "Alpine 13.5% Debentures"). The Alpine 13.5%
Debentures were issued in 1986 and were in the aggregate principal amount of
$1.6 million.
(10) Alpine repaid other current indebtedness of $0.2 million.
(11) Alpine loaned $3.3 million to PolyVision to enable PolyVision to repay
all amounts due under its revolving credit facility and under its outstanding
equipment loan.
SUMMARY OF THE TERMS OF THE EXCHANGE OFFER
The Exchange Offer relates to the exchange of up to $153,000,000 aggregate
principal amount of Old Notes for up to an equal aggregate principal amount of
New Notes. The New Notes will be obligations of Alpine entitled to the benefits
of the Indenture relating to the Old Notes. The form and terms of the New Notes
are identical in all material respects to the form and terms of the Old Notes
except that the New Notes have been registered under the Securities Act.
Following the completion of the Exchange Offer, none of the Notes will be
entitled to the benefits of the provisions of the Registration Rights Agreement
relating to contingent increases in the interest rates provided for pursuant
thereto. See "Description of the New Notes."
<TABLE>
<S> <C>
The Exchange Offer........... $1,000 principal amount of New Notes will be issued in
exchange for each $1,000 principal amount of Old Notes
validly tendered pursuant to the Exchange Offer. As of the
date hereof, $153,000,000 in aggregate principal amount of
Old Notes are outstanding. Alpine will issue the New Notes
to tendering holders of Old Notes on or promptly after the
Expiration Date.
Resale....................... Alpine believes that the New Notes issued pursuant to the
Exchange Offer generally will be freely transferable by the
holders thereof without registration or any prospectus
delivery requirement under the Securities Act, except that
any of its "affiliates" or a "dealer," as such terms are
defined under the Securities Act, that exchanges Old Notes
held for its own account (a "Restricted Holder") may be
required to deliver copies of this Prospectus in connection
with any resale of the New Notes issued in exchange for such
Old Notes (the "Prospectus Delivery Requirement"). See "The
Exchange Offer--General" and "Plan of Distribution."
Expiration Date.............. 5:00 p.m., New York City time, on , 1995, unless
the Exchange Offer is extended, in which case the term
"Expiration Date" means the latest date and time to which
the Exchange Offer is extended. See "The Exchange
Offer--Expiration Date; Extensions; Amendments."
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
Accrued Interest on the New
Notes and the Old Notes..... Interest on each New Note will accrue from the last Interest
Payment Date on which interest was paid on the Old Note
tendered in exchange therefor or, if no interest has been
paid on such tendered Old Note, from July 21, 1995. Holders
of Old Notes whose Old Notes are accepted for exchange will
be deemed to have waived the right to receive any payment in
respect of interest on such Old Notes accrued from the last
Interest Payment Date or July 21, 1995 (as the case may be)
to the date of the issuance of the New Notes. Consequently,
holders who exchange their Old Notes for New Notes will
receive the same interest payment on the same Interest
Payment Date that they would have received had they not
accepted the Exchange Offer. See "The Exchange
Offer--Interest on the New Notes."
Termination of the Exchange
Offer....................... Alpine may terminate the Exchange Offer if it determines
that its ability to proceed with the Exchange Offer could be
materially impaired due to any legal or governmental action,
any new law, statute, rule or regulation or any
interpretation of the staff of the Commission of any
existing law, statute, rule or regulation. Holders of Old
Notes will have certain rights against Alpine under the
Registration Rights Agreement if Alpine fails to consummate
the Exchange Offer. See "The Exchange Offer--Termination."
No federal or state regulatory requirements must be complied
with or approvals obtained in connection with the Exchange
Offer, other than applicable requirements under federal and
state securities laws.
Procedures for Tendering Old
Notes....................... Each holder of Old Notes wishing to accept the Exchange
Offer must complete, sign and date the Letter of
Transmittal, or a facsimile thereof, in accordance with the
instructions contained herein and therein, and mail or
otherwise deliver such Letter of Transmittal, or such
facsimile, together with the Old Notes to be exchanged and
any other required documentation to Marine Midland Bank, as
Exchange Agent, at the address set forth herein and therein
or effect a tender of Old Notes pursuant to the procedures
for book-entry transfer as provided for herein. See "The
Exchange Offer--Procedures for Tendering."
Special Procedures for
Beneficial Holders.......... Any beneficial holder whose Old Notes are registered in the
name of his broker, dealer, commercial bank, trust company
or other nominee and who wishes to tender in the Exchange
Offer should contact such registered holder promptly and
instruct such registered holder to tender on his behalf. If
such beneficial holder wishes to tender on his own behalf,
such beneficial holder must, prior to completing and
executing the Letter of Transmittal and delivering his Old
Notes, either make appropriate arrangements to register
ownership of the Old Notes in such holder's name or obtain a
properly completed bond power from the registered holder.
The transfer of record ownership may take considerable time.
See "The Exchange Offer--Procedures for Tendering."
</TABLE>
10
<PAGE>
<TABLE>
<S> <C>
Guaranteed Delivery
Procedures.................. Holders of Old Notes who wish to tender their Old Notes and
whose Old Notes are not immediately available or who cannot
deliver their Old Notes (or who cannot complete the
procedure for book-entry transfer on a timely basis) and a
properly completed Letter of Transmittal or any other
documents required by the Letter of Transmittal to the
Exchange Agent prior to the Expiration Date may tender their
Old Notes according to the guaranteed delivery procedures
set forth in "The Exchange Offer--Guaranteed Delivery
Procedures."
Withdrawal Rights............ Tenders of Old Notes may be withdrawn at any time prior to
5:00 p.m., New York City time, on the business day prior to
the Expiration Date, unless previously accepted for
exchange. See "The Exchange Offer-- Withdrawal of Tenders."
Acceptance of Old Notes and
Delivery of New Notes....... Subject to certain conditions (as summarized above in
"Termination of the Exchange Offer" and described more fully
in "The Exchange Offer--Termination"), Alpine will accept
for exchange any and all Old Notes which are properly
tendered in the Exchange Offer prior to 5:00 p.m., New York
City time, on the Expiration Date. The New Notes issued
pursuant to the Exchange Offer will be delivered promptly
following the Expiration Date. See "The Exchange
Offer--General."
Certain Tax Consequences..... The exchange pursuant to the Exchange Offer will generally
not be a taxable event for federal income tax purposes. See
"Certain U.S. Federal Income Tax Consequences."
Exchange Agent............... Marine Midland Bank, the Trustee under the Indenture, is
serving as exchange agent (the "Exchange Agent") in
connection with the Exchange Offer. The mailing address of
the Exchange Agent is: Marine Midland Bank, 140 Broadway--A
Level, Corporate Trust Operations, New York, New York
10005-1180. Hand deliveries and deliveries by overnight
courier should be addressed to Marine Midland Bank, 140
Broadway--A Level, Corporate Trust Operations, New York, New
York 10005-1180. For information with respect to the
Exchange Offer, the telephone number for the Exchange Agent
is (212) 658-5931 and the facsimile number for the Exchange
Agent is (212) 658-2292.
Use of Proceeds.............. There will be no cash proceeds payable to Alpine from the
issuance of the New Notes pursuant to the Exchange Offer.
The net proceeds received by Alpine from the sale of the Old
Notes, together with borrowings under Alpine's credit
agreement (the "New Credit Agreement") and a portion of
Alpine's cash reserves were used to refinance substantially
all of Alpine's indebtedness. See "Use of Proceeds."
</TABLE>
DESCRIPTION OF THE NEW NOTES
<TABLE>
<S> <C>
Notes Offered................ $153,000,000 aggregate principal amount of 12 1/4% Series B
Senior Secured Notes due 2003 to be issued under an
Indenture dated as of July 15, 1995 (the "Indenture").
Maturity Date................ July 15, 2003.
Interest Payment Dates....... January 15 and July 15.
</TABLE>
11
<PAGE>
<TABLE>
<S> <C>
Original Issue Discount...... The New Notes will be treated for U.S. federal income tax
purposes as issued with "original issue discount" ("OID"), a
portion of which will be includable in a holder's gross
income in advance of the receipt of the cash to which the
income is attributable. See "Certain U.S. Federal Income Tax
Consequences."
Optional Redemption.......... The New Notes will be subject to redemption, at the option
of Alpine, in whole or in part, at any time on or after July
15, 1999, at the redemption prices set forth herein. In
addition, prior to July 15, 1997, Alpine may redeem up to
33 1/3% of the original aggregate principal amount of the
New Notes with the net proceeds of one or more public
offerings of its Common Stock at 104 1/2% of the principal
amount at maturity, plus accrued interest thereon; provided,
however, that at least 66 2/3% of the original aggregate
principal amount of the Notes remains outstanding
thereafter. See "Description of the New Notes--Redemption."
Security..................... Initially, the New Notes will be secured by a pledge of all
of the capital stock of Superior and Adience. At such time
as Alpine completes the refinancing of the DNE Group's
credit facility (which Alpine expects to complete in the
near future upon receipt of a third-party consent), the New
Notes will also be secured by the stock of each member of
the DNE Group that is directly owned by Alpine. It is
expected that only DNE Systems will be directly owned by
Alpine. The New Notes are not secured by any lien on, or
other security interest in, any other properties or assets
of Alpine or any properties or assets of any subsidiary of
Alpine.
Guarantees................... Initially, the New Notes will be unconditionally guaranteed
(the "Subsidiary Guarantees") by Superior and Adience and
Superior's Canadian subsidiary will guarantee Superior's
obligations under its Subsidiary Guarantee or,
alternatively, such subsidiary may directly guarantee the
New Notes (collectively, together with all Restricted
Subsidiaries that in the future provide a Subsidiary
Guarantee, the "Subsidiary Guarantors"). Each Subsidiary
Guarantee will be a senior unsecured obligation of the
Subsidiary Guarantor, except that the Subsidiary Guarantee
given by Adience will be subordinated in right of payment to
$5.0 million of Adience Senior Notes outstanding. The
Indenture requires a Subsidiary Guarantee from each new
Restricted Subsidiary, provided that a Non-U.S. Restricted
Subsidiary will not be required to provide a Subsidiary
Guarantee unless it provides a guarantee with respect to any
debt (other than the Notes) of Alpine or any U.S. Restricted
Subsidiary. Additionally, if a member of the DNE Group or
any other Restricted Subsidiary existing on the date of the
initial issuance of the Notes guarantees any debt (other
than the Notes) of Alpine or any U.S. Restricted Subsidiary,
such Subsidiary will be required to issue a Subsidiary
Guarantee, provided that any such Subsidiary Guarantee of a
Non-U.S. Restricted Subsidiary will be released when such
Subsidiary no longer guarantees any such debt (other than as
a result of payment thereof). If Alpine disposes of any
Subsidiary Guarantor in compliance with the Indenture, such
Subsidiary Guarantor will automatically be released from all
obligations under its Subsidiary Guarantee. See "Description
of the New Notes--Subsidiary Guarantees."
</TABLE>
12
<PAGE>
<TABLE>
<S> <C>
Ranking...................... The New Notes will be senior secured obligations of Alpine,
ranking PARI PASSU with Alpine's existing and future
unsubordinated indebtedness. As of April 30, 1995, after
giving effect to the sale of the Old Notes and the
Refinancing, Alpine and its subsidiaries would have had
$69.6 million of debt outstanding other than the Notes, all
but $0.9 million of which would have been senior debt and
$67.7 million of which would have been secured debt. Except
as noted above, the New Notes and Subsidiary Guarantees will
rank PARI PASSU in right of payment with the loans and
subsidiary guarantees under the New Credit Agreement and
with other senior debt of Alpine and the Subsidiary
Guarantors. However, the New Notes and Subsidiary Guarantees
will be effectively subordinated to the loans and subsidiary
guarantees under the New Credit Agreement and to other
secured debt of Alpine and its subsidiaries to the extent of
the assets securing the New Credit Agreement and such other
debt. The New Notes will also be effectively subordinated to
all debt and other obligations of Alpine's subsidiaries that
are not Subsidiary Guarantors to the extent of the assets of
such subsidiaries. The pledge of stock to secure the New
Notes will not alter such effective subordination of the New
Notes.
Change of Control............ In the event of a Change of Control (as defined), Alpine
will be required to make an offer to purchase all
outstanding New Notes at a purchase price equal to 101% of
their Accreted Value (as defined), plus accrued interest
thereon. There can be no assurance that Alpine and the
Subsidiary Guarantors will have sufficient funds or
financing to repurchase the New Notes and satisfy other
obligations (including obligations under the New Credit
Agreement) that may come due upon a Change of Control. See
"Description of the New Notes--Certain Covenants--Purchase
of Notes upon a Change of Control."
Covenants.................... The Indenture contains certain covenants, including
covenants with respect to the following matters: (i)
limitation on debt; (ii) limitation on debt of Restricted
Subsidiaries; (iii) limitation on restricted payments; (iv)
limitation on disposition of proceeds of asset sales; (v)
limitation on Unrestricted Subsidiaries; (vi) limitation on
dividends and other payment restrictions affecting
Restricted Subsidiaries; (vii) limitation on transactions
with affiliates; (viii) limitation on liens; (ix) limitation
on sale and leaseback transactions; and (x) restriction on
merger, consolidation and sale of assets. See "Description
of the New Notes--Certain Covenants" and "--Merger,
Consolidation or Sale of Assets."
Exchange Offer; Registration
Rights...................... In connection with the sale of the Old Notes, Alpine agreed
to use its best efforts to (i) file within 30 days, and
cause to become effective within 90 days, of the date of
original issuance of the Old Notes, a registration statement
(the "Registration Statement") with respect to the Exchange
Offer and (ii) cause the Exchange Offer to be consummated
within 120 days of the original issuance of the Old Notes.
</TABLE>
13
<PAGE>
<TABLE>
<S> <C>
Under existing interpretations of the staff of the
Commission contained in several no-action letters to third
parties, the New Notes would in general be freely tradable
after the Exchange Offer without further registration under
the Securities Act. However, any purchaser of New Notes who
is an "affiliate" of Alpine or who intends to participate in
the Exchange Offer for the purpose of distributing the New
Notes (i) will not be able to rely on such interpretations
of the staff of the Commission, (ii) will not be able to
tender its Old Notes in the Exchange Offer and (iii) must
comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any
sale or transfer of the New Notes unless such sale or
transfer is made pursuant to an exemption from such
requirements. See "The Exchange Offer."
In the event that any changes in law or the applicable
interpretations of the staff of the Commission do not permit
Alpine to effect the Exchange Offer or if the Registration
Statement is not declared effective within 90 days following
the original issue of the Notes, or upon the request of the
Initial Purchasers under certain circumstances, Alpine will
use its best efforts to cause to become effective by the
120th day after the original issue of the Old Notes a shelf
registration statement with respect to the resale of the
Notes (the "Shelf Registration Statement") and to keep the
Shelf Registration Statement effective for up to three years
after the date of the original issue of the Old Notes. In
the event that either (i) the Registration Statement is not
filed with the Commission on or prior to the 30th day
following the date of the original issue of the Old Notes,
(ii) the Registration Statement is not declared effective on
or prior to the 90th day following the date of original
issue of the Old Notes or (iii) the Exchange Offer is not
consummated or a Shelf Registration Statement with respect
to the Old Notes is not declared effective on or prior to
the 120th day following the date of the original issue of
the Old Notes, the interest rate borne by the Old Notes
shall be increased by one quarter of one percent per annum,
which rate will be increased by an additional one quarter of
one percent per annum for each 90-day period that any such
additional interest continues to accrue; provided that the
aggregate increase in such interest rate may in no event
exceed one percent. Upon (x) the filing of the Registration
Statement in the case of clause (i) above, (y) the
effectiveness of the Registration Statement in the case of
clause (ii) above or (z) the day before the date of
consummation of the Exchange Offer or the effectiveness of a
Shelf Registration Statement, as the case may be, in the
case of clause (iii) above, the interest rate borne by the
Old Notes from the date of such filing, effectiveness or the
day before the date of consummation, as the case may be,
will be reduced to the original stated interest rate borne
by the Old Notes on the date of the original issue of the
Old Notes; provided, however, that, if after any such
reduction in interest rate, a different event specified in
clause (i), (ii) or (iii) above occurs, the interest rate
may again be increased pursuant to the foregoing provisions.
See "The Exchange Offer--General."
</TABLE>
14
<PAGE>
<TABLE>
<S> <C>
Absence of a Public Market
for the New Notes........... The New Notes will be new securities for which there
currently is no market. Although the Initial Purchasers have
informed Alpine that they currently intend to make a market
in the New Notes, they are not obligated to do so, and any
such market making may be discontinued at any time without
notice. Accordingly, there can be no assurance as to the
development or liquidity of any market for the New Notes.
The New Notes have been designated for trading in the
Private Offerings, Resale and Trading through Automatic
Linkages (PORTAL) market. Alpine does not intend to apply
for listing of the New Notes on any securities exchange or
for quotation through the National Association of Securities
Dealers Automated Quotation System.
</TABLE>
RISK FACTORS
See "Risk Factors" beginning on page 18 for a discussion of certain factors
that should be considered by prospective investors.
15
<PAGE>
SUMMARY HISTORICAL AND UNAUDITED PRO FORMA FINANCIAL INFORMATION
Set forth below is certain selected historical consolidated financial
information of Alpine, as well as certain unaudited condensed combined pro forma
financial information. The pro forma financial information gives effect to the
following transactions as if such transactions had occurred as of May 1, 1994:
the Alcatel Acquisition and the related financing; the Adience Acquisition; the
Refinancing; the PolyVision Transactions and the other pro forma adjustments
described in the Pro Forma Condensed Combined Financial Statements appearing in
the Form 10-K. The unaudited pro forma financial information is provided for
comparative purposes only and does not purport to be indicative of the results
that actually would have been obtained if the events set forth above had been
effected on the dates indicated or of those results that may be obtained in the
future. The pro forma financial statements are based on estimates of values and
facilities' closure costs and transaction costs, among other things.
Accordingly, the actual recording of the transactions can be expected to differ
from the pro forma financial information herein and the Pro Forma Condensed
Combined Financial Statements in the Form 10-K.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED APRIL 30,
----------------------------------------------------
HISTORICAL PRO FORMA
---------------------------------- ----------------
1993 1994 1995 1995
---------- ---------- ---------- ----------------
(DOLLARS IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales................................................. $ 27,897 $ 68,510 $ 198,135 $ 469,572
Cost of goods sold........................................ 15,915 56,250 169,125 413,228
---------- ---------- ---------- --------
Gross profit............................................ 11,982 12,260 29,010 56,344
Selling, general and administrative....................... 10,482 12,168 20,487 31,883
Amortization of goodwill and other intangibles charges.... 395 2,292 1,527 3,041
---------- ---------- ---------- --------
Operating income (loss)................................. 1,105 (2,200) 6,996 21,420
Interest income........................................... 209 242 345 409
Interest expense.......................................... (2,301) (2,363) (8,197) (26,809)
Other income (expense), net............................... (1,469) (506) 28 392
---------- ---------- ---------- --------
(Loss) from continuing operations before income taxes... (2,456) (4,827) (828) (4,588)
Provision for income taxes................................ -- 68 348 348
---------- ---------- ---------- --------
(Loss) from continuing operations....................... (2,456) (4,895) (1,176) $ (4,936)
--------
--------
(Loss) from discontinued operations (1)................... (8,377) (25,236) (4,868)
---------- ---------- ----------
(Loss) before extraordinary item........................ (10,833) (30,131) (6,044)
Extraordinary item -- (loss) on early extinguishment of
debt (2)................................................. (1,262) (47) --
---------- ---------- ----------
Net (loss).............................................. $ (12,095) $ (30,178) $ (6,044)
---------- ---------- ----------
---------- ---------- ----------
OTHER DATA:
Depreciation and amortization............................. $ 960 $ 4,425 $ 6,169 $ 13,565
Other non-cash charges.................................... 870 497 388 388
Capital expenditures -- continuing operations............. 422 1,565 2,275 8,400
Ratio of earnings to fixed charges (3).................... -- -- -- --
EBITDA (4)................................................ 2,935 2,722 13,553 35,373
Ratio of EBITDA to cash interest expense.................. 1.48x 1.28x 1.85x 1.43x
Ratio of EBITDA to total interest expense................. 1.28x 1.15x 1.65x 1.32x
</TABLE>
(FOOTNOTES ON FOLLOWING PAGE)
16
<PAGE>
<TABLE>
<CAPTION>
AT APRIL 30,
----------------------------------------------------
HISTORICAL PRO FORMA
---------------------------------- ----------------
1993 1994 1995 1995
---------- ---------- ---------- ----------------
(IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital........................................... $ 7,256 $ 24,594 $ 7,080 $ 66,426
Total assets.............................................. 27,998 113,796 233,778 357,947
Total debt................................................ 13,637 43,745 119,179 220,180
Preferred stock........................................... 4,677 6,177 17,250 15,495
Total stockholders' equity................................ 10,602 47,998 44,658 51,187
<FN>
------------------------
(1) As a result of the PolyVision Transactions, the operations of APV and
Posterloid have been reflected as discontinued.
(2) The extraordinary losses recorded during the fiscal years ended April 30,
1993 and 1994 relate to the early extinguishment of $0.1 million and $6.0
million principal amount, respectively, of the Alpine 13.5% Debentures.
(3) For the purposes of this computation, earnings are defined as income (loss)
before income taxes plus fixed charges. Fixed charges consist of interest
expense (including amortization of deferred debt issuance costs) and the
portion of rental expense that is representative of the interest factor
(deemed to be one-third of minimum operating lease rentals). As a result of
losses incurred for the periods presented, earnings were insufficient to
cover fixed charges during Alpine's fiscal years ended April 30, 1993, 1994
and 1995 by $2.5 million, $4.8 million and $0.8 million, respectively, and
pro forma earnings were insufficient to cover pro forma fixed charges for
the fiscal year ended April 30, 1995 by $4.6 million.
(4) EBITDA represents operating income plus (i) depreciation and amortization,
(ii) write-off of other intangibles and (iii) provision for non-cash
compensation expense (primarily stock options and restricted stock grants).
EBITDA is presented not as a measure of operating results, but rather to
provide additional information related to Alpine's ability to service debt.
EBITDA should not be considered as an alternative to either (i) operating
income determined in accordance with generally accepted accounting
principles ("GAAP") as an indicator of operating performance or (ii) cash
flows from operating activities (determined in accordance with GAAP) as a
measure of liquidity.
</TABLE>
17
<PAGE>
RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY, IN ADDITION TO OTHER
INFORMATION IN THIS PROSPECTUS, THE FOLLOWING FACTORS.
SUBSTANTIAL LEVERAGE
Alpine's businesses are capital intensive and Alpine has incurred or assumed
substantial indebtedness to finance the Superior, Adience and Alcatel
Acquisitions. In the ordinary course of business, Alpine has incurred and will
continue to incur additional indebtedness to fund seasonal increases in its
receivables and inventories and the other requirements of its businesses.
Subject to certain covenants and financial tests set forth in the New Credit
Agreement and the Indenture, Alpine may incur additional debt in the future. See
"Description of Certain Indebtedness--New Credit Agreement" and "Description of
the Notes--Certain Covenants." Alpine's ability to borrow under the New Credit
Agreement will be dependent upon, among other things, its ability to maintain a
sufficient level of receivables and inventories. If Alpine is unable to borrow
sufficient funds under the New Credit Agreement to finance its business and
working capital needs, its business may be substantially and adversely affected.
At April 30, 1995, after giving effect to the Alcatel Acquisition, the
Refinancing, the PolyVision Transactions and the other transactions described
under "Capitalization," Alpine's consolidated debt would have been $209.9
million, its stockholders' equity would have been $51.2 million and its ratio of
debt to stockholders' equity would have been 4.1 to 1.0. See "Capitalization."
The degree to which Alpine will be leveraged could have important
consequences to holders of the Notes, including the following: (i) Alpine's
ability to obtain financing in the future for working capital, capital
expenditures and general corporate purposes may be impaired; (ii) a substantial
portion of Alpine's cash flow from operations will be required to be dedicated
to the payment of interest on its indebtedness; and (iii) a high degree of
leverage may make Alpine more vulnerable to economic downturns and may limit its
ability to withstand competitive pressures.
Alpine believes that, based upon current levels of operations, it will be
able to meet its debt service obligations. If, however, Alpine cannot generate
sufficient cash flow from operations to meet its obligations, then Alpine may be
required to refinance its debt, raise additional capital or take other actions
such as reducing its level of capital expenditures. There can be no assurance,
however, that any of such actions could be effected on satisfactory terms or
would be permitted by the terms of the New Credit Agreement, the Indenture or
its other credit arrangements.
HOLDING COMPANY STRUCTURE
The Notes are senior secured obligations of Alpine. The Notes are
unconditionally guaranteed by Superior and Adience. Superior's Canadian
subsidiary will guarantee Superior's obligations under its Subsidiary Guarantee
or, alternatively, such subsidiary may directly guarantee the Notes. Subject to
the considerations described below under "Fraudulent Conveyance Considerations,"
the Subsidiary Guarantees provide the holders of the Notes with a direct claim
on the assets of the guarantors. Loans under the New Credit Agreement constitute
senior debt. Loans under the New Credit Agreement are guaranteed by Superior and
Adience and Superior's Canadian subsidiary may guarantee Superior's obligations
under its guarantee of the New Credit Agreement or, alternatively, such
subsidiary may directly guarantee the New Credit Agreement. The loans and
guarantees under the New Credit Agreement are secured primarily by the inventory
and accounts receivable of Alpine and such subsidiaries. Loans under the New
Credit Agreement to the DNE Group and Alpine's Canadian subsidiaries are
primarily secured by such companies' inventory and accounts receivable. The
Notes and Subsidiary Guarantees are senior obligations, ranking PARI PASSU in
right of payment with the loans and subsidiary guarantees under the New Credit
Agreement and with other senior debt of Alpine and the Subsidiary Guarantors,
except that the Subsidiary Guarantee given by Adience is subordinated in right
of payment to the $5.0 million of Adience Senior Notes outstanding. However, the
Notes and Subsidiary Guarantees are effectively subordinated to the loans and
subsidiary guarantees under the New Credit Agreement and to other secured debt
of Alpine and the Subsidiary Guarantors to the extent
18
<PAGE>
of the assets securing the New Credit Agreement and such other debt. The Notes
are effectively subordinated to all debt and other obligations of Alpine's
subsidiaries that are not Subsidiary Guarantors to the extent of the assets of
such subsidiaries. The pledge of stock to secure the Notes does not alter such
effective subordination of the Notes.
HISTORY OF LOSSES AND ACCUMULATED DEFICIT
Alpine has incurred losses from continuing operations in each of the past
five fiscal years. As of April 30, 1995, Alpine had an accumulated deficit of
$76.1 million ($71.9 million on a pro forma basis including the gain on
distribution of the PolyVision interest), of which $49.0 million was
attributable to losses from discontinued operations. There can be no assurance
that Alpine will attain profitable operations.
CHANGING TECHNOLOGY AND REGULATORY FRAMEWORK
The commercial development of fiber optics has had, and is expected to
continue to have, an effect on Alpine's copper wire and cable business. Fiber
optic technology has had a major impact on certain components of the telephone
network where its utilization is cost-effective. Optical fiber is currently the
transmission medium of choice of the telephone companies for trunking
applications and in the long distance network. To a lesser degree, optical fiber
cable has been deployed in certain high-density feeder applications between
telephone central offices or remote locations and major distribution points,
which has further reduced the total market for products manufactured by Alpine.
In the local loop portion of the telephone network, copper wire has remained the
most widely used medium for telephone voice transmission. However, some
telephone companies are exploring the provision of video entertainment or other
new services. As a result, the telephone companies are evaluating (and in
isolated cases installing on a test basis) alternative technologies for
providing such services, including coaxial and optical fiber cable. In addition,
the U.S. Congress is currently considering and, in certain cases, has enacted,
fundamental changes in the regulation of the telecommunications industry.
Because this area is undergoing rapid and intense technological change and
because of the potential change in the regulatory framework, it is not possible
at this time to predict the impact that these developments may have on the total
demand for copper wire in the local loop. However, Alpine believes that copper
wire and cable will continue to be widely used in the local loop portion of the
telephone network, because of the low cost and ease of installation of copper
products, the ability of copper to transmit both signals and power (thereby
eliminating the need for a separate power source) and technological advances
improving the ability of copper wire to transmit data and video. Nevertheless, a
relatively small decline in the level of purchases of copper telephone wire and
cable by the RBOCs and other telephone companies could have a disproportionately
adverse effect on the copper wire and cable industry, including Alpine.
DEPENDENCE ON SIGNIFICANT CUSTOMERS
A significant amount of Alpine's business is dependent upon a limited number
of customers. Alpine's wire and cable business is dependent on the RBOCs and
other major independent telephone holding companies. For the fiscal year ended
April 30, 1995, the six RBOCs with which Alpine currently has long-term
contracts and three large independent telephone companies accounted for 76% of
Alpine's pro forma wire and cable net sales. Two of these customers, BellSouth
Corporation and GTE Corporation, accounted for 11.5% and 10.4%, respectively, of
Alpine's total pro forma net sales for that year. The three largest customers
for Alpine's specialty refractory products (USX--US Steel Group, Inc., Bethlehem
Steel Corporation and LTV Steel Company, Inc.) accounted for 31% of such
business segment's pro forma net sales for the fiscal year ended April 30, 1995.
Alpine's electronic and data communications business remains materially
dependent upon U.S. military and government sales, which represented 57.2% and
25.3%, respectively, of this business segment's net sales for the fiscal year
ended April 30, 1995. Adverse conditions affecting the industries in which
Alpine's customers are engaged or the loss of any of these significant customers
could materially adversely affect Alpine's results of operations and financial
condition.
CYCLICAL NATURE OF BUSINESSES
Alpine's products are supplied primarily to customers in industries that are
particularly sensitive to fluctuations in the general business cycles of the
United States and world economies. Demand for copper telephone wire and cable is
dependent on several factors, including the rate at which new lines are
installed
19
<PAGE>
in homes and businesses, which is in turn partially dependent on the level of
new construction; the level of spending for highways, bridges and other parts of
the infrastructure, which often necessitates installation of new telephone
cables; and the level of general maintenance spending by telephone companies.
The U.S. steel industry, which accounts for a majority of the net sales in
Alpine's refractories business, is a cyclical business characterized at times by
excess capacity and intense competition. Between 1982 and 1993, U.S. steel
producers reduced their raw steel production capacity by approximately 25% and
increased efficiency through modernization of production facilities. A number of
U.S. steel producers reported losses in 1990, 1991 and 1992 in a weak U.S.
economic environment, however, many steel producers reported improved results in
1993 and 1994. There can be no assurance that this recovery will continue or
that there will be any future improvement in U.S. steel industry earnings.
Additionally, other technologies such as microwave, satellite and cellular
transmission have had, and will continue to have, an impact on the market for
copper wire and cable telecommunications products. In addition, there can be no
assurance that other, newly-developed technologies will not have an adverse
impact on the market for copper wire and cable telecommunications products.
RAW MATERIALS
The principal raw materials used by Alpine in the manufacture of its wire
and cable products are copper, aluminum, bronze and plastics such as
polyethylene and polyvinyl chloride. These raw materials are available from
several sources and Alpine has not experienced any shortages of these raw
materials in the recent past. However, the production of UTP products is
dependent upon teflon, which is currently manufactured by only two producers and
is in short supply. As a result, Alpine has had to limit its production of UTP.
However, one of those producers has indicated that it intends to increase its
production capacity. From time to time, particular plastics have been difficult
to obtain, but in recent years none of these shortages has required Alpine to
limit production. The inability of Alpine to obtain sufficient quantities of raw
materials may adversely affect its operating results. See "Business--Copper Wire
and Cable Business-- Raw Materials" in the Form 10-K.
COMPETITION
Alpine operates in industries which are highly competitive. In each of
Alpine's business areas, there are competitors which are larger and/or have
greater financial resources than Alpine. There can be no assurance that Alpine
will be able to continue to compete successfully or that such competition will
not have a material adverse effect on Alpine's business or financial results.
ENVIRONMENTAL MATTERS
Alpine's operations are subject to numerous federal, state and local laws
and regulations relating to the storage, handling, emission, transportation and
discharge of hazardous materials and waste products.
The operations of Alpine have resulted in releases of hazardous substances
at sites currently or formerly owned or operated by Alpine, its subsidiaries or
their respective predecessors in interest. Investigatory and remedial activities
are presently being undertaken at some of these sites under the oversight of
state governmental authorities. In addition, Alpine is in the process of
litigating its status as a potentially responsible party in a Superfund action.
Such environmental obligations have not had a material adverse effect on
Alpine's business or financial results to date, and Alpine has accrued amounts
representing the estimated costs of completing such obligations. There can be no
assurance that the actual costs associated with environmental liabilities will
not exceed the amounts presently estimated or that additional sites will not
require investigation or remediation in the future and will not have a material
adverse effect on Alpine. See "Business--Environmental Matters" and "--Legal
Proceedings" in the Form 10-K.
FRAUDULENT CONVEYANCE CONSIDERATIONS
Alpine believes that the indebtedness represented by the Notes and the
Subsidiary Guarantees has been incurred for proper purposes and in good faith,
and that, based on present forecasts, asset valuations and other financial
information, each of Alpine and the Subsidiary Guarantors is, after the
consummation of the offering of the Old Notes was and after the Exchange Offer
will be, solvent, will have sufficient capital for carrying on its business and
will be able to pay its debts as they mature. Notwithstanding Alpine's belief,
20
<PAGE>
however, if a court of competent jurisdiction in a suit by a creditor or
representative of creditors of Alpine or any Subsidiary Guarantor (such as a
trustee in bankruptcy or a debtor-in-possession) were to find that, at the time
of the incurrence of the indebtedness represented by the Notes or the Subsidiary
Guarantees, Alpine or such Subsidiary Guarantor, as the case may be, was
insolvent, was rendered insolvent by reason of such incurrence or guarantee, was
engaged in a business or transaction for which its remaining assets constituted
unreasonably small capital, intended to incur, or believed that it would incur,
debts beyond its ability to pay such debts as they matured, or intended to
hinder, delay or defraud its creditors, and that the indebtedness was incurred
for less than reasonably equivalent value, then such court could, among other
things, (i) void all or a portion of Alpine's or such Subsidiary Guarantor's
obligations to the holders of the Notes, the effect of which could be that the
holders of the Notes may not be repaid in full and/or (ii) subordinate Alpine's
or such Subsidiary Guarantor's obligations to the holders of the Notes to other
existing and future indebtedness of Alpine or such Subsidiary Guarantor, the
effect of which would be to entitle such other creditors to be paid in full
before any payment could be made on the Notes.
CERTAIN ISSUES RELATING TO ORIGINAL ISSUE DISCOUNT
The New Notes will be subject to the application of the OID provisions of
the Internal Revenue Code of 1986, as amended. A holder of the New Notes will be
required to include in gross income each year the amount of the OID accrued on
its New Notes for such year in advance of the receipt of cash in respect
thereof.
Except in certain limited circumstances, unmatured interest is not allowable
as a claim under the U.S. Bankruptcy Code. If a bankruptcy or reorganization
case is commenced by or against Alpine, a bankruptcy court could hold that any
amount by which the stated principal amount of the New Notes exceeds their
accreted value as of the date of the filing of the bankruptcy petition
constitutes unmatured interest. If a court were so to find, claims by holders of
the New Notes would be allowed only to the extent of the accreted value of the
New Notes as of the date of the petition. There can be no assurance that a court
would calculate such accreted value by the same method as that employed for
federal income tax purposes or under the Indenture. Accordingly, holders of New
Notes may, even if sufficient funds are available, receive a lesser amount as a
result of any such bankruptcy case than they would be entitled to under the
express terms of the Indenture. Such amount might also be less than the amount
calculated for federal income tax purposes.
ABSENCE OF PUBLIC MARKET
The New Notes will be new securities for which there currently is no market.
Although the Initial Purchasers have informed Alpine that they currently intend
to make a market in the New Notes, they are not obligated to do so, and any such
market making may be discontinued at any time without notice. Accordingly, there
can be no assurance as to the development or liquidity of any market for the New
Notes. Alpine does not intend to apply for listing of the New Notes on any
securities exchange or for quotation through the National Association of
Securities Dealers Automated Quotation System.
CONSEQUENCES OF FAILURE TO EXCHANGE
Untendered Old Notes not exchanged for New Notes pursuant to the Exchange
Offer will remain subject to the existing restrictions upon transfer of such Old
Notes. Additionally, holders of any Old Notes not tendered in the Exchange Offer
prior to the Expiration Date will not be entitled to require Alpine to file the
Shelf Registration Statement and the stated interest rate on such Old Notes will
remain at its initial level of 12 1/4%.
21
<PAGE>
USE OF PROCEEDS
Alpine and the Co-Offerors will not receive any cash proceeds from the
issuance of the New Notes offered hereby. In consideration for issuing the New
Notes as contemplated in this Prospectus, Alpine will receive in exchange Old
Notes in like principal amount, the terms of which are identical in all material
respects to the New Notes. The Old Notes surrendered in exchange for the New
Notes will be retired and cancelled and cannot be reissued. Accordingly,
issuance of the New Notes will not result in any increase in the indebtedness of
Alpine. For information with respect to the use of the net proceeds received by
Alpine from the offering of the Old Notes, borrowings under the New Credit
Agreement and a portion of Alpine's cash reserves, see "Summary--Recent
Developments; The Refinancing" herein and "Management's Discussion and
Analysis--Liquidity and Capital Resources" in the Form 10-K.
THE EXCHANGE OFFER
GENERAL
Alpine and the Co-Offerors entered into a Registration Rights Agreement with
the Initial Purchasers pursuant to which Alpine and the Co-Offerors agreed, for
the benefit of the holders of the Old Notes, at Alpine's cost, (i) to use their
best efforts to file the Registration Statement within 30 days after the date of
the original issue of the Old Notes with the Commission with respect to the
Exchange Offer for the New Notes, which will have terms identical in all
material respects to the Old Notes (except that the New Notes will not contain
terms with respect to transfer restrictions or interest rate increases as
described herein) and (ii) to use their best efforts to cause the Registration
Statement to be declared effective under the Securities Act within 90 days after
the date of the original issue of the Old Notes. The Registration Rights
Agreement provides that promptly after the Registration Statement has been
declared effective, Alpine will offer the New Notes in exchange for surrender of
the Old Notes and that Alpine will keep the Exchange Offer open for not less
than 30 days (or longer if required by applicable law) after the date notice of
the Exchange Offer is mailed to the holders of the Old Notes. For each Old Note
validly tendered to Alpine pursuant to the Exchange Offer and not withdrawn by
the holder thereof, the holder of such Old Note will receive a New Note having a
principal amount equal to that of the tendered Old Note. Interest on each New
Note will accrue from the last Interest Payment Date on which interest was paid
on the Old Note tendered in exchange therefor or, if no interest has been paid
on such tendered Old Note, from July 21, 1995.
Based on an interpretation of the Securities Act by the staff of the
Commission set forth in several no-action letters to third parties, and subject
to the immediately following sentence, Alpine believes that the New Notes issued
pursuant to the Exchange Offer may be offered for resale, resold and otherwise
transferred by holders thereof without further compliance with the registration
and prospectus delivery provisions of the Securities Act. However, any holder of
Old Notes who is an "affiliate" of Alpine or who intends to participate in the
Exchange Offer for the purpose of distributing the New Notes (i) will not be
able to rely on the interpretation by the staff of the Commission set forth in
the above referenced no-action letters, (ii) will not be able to tender Old
Notes in the Exchange Offer and (iii) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
sale or transfer of the New Notes, unless such sale or transfer is made pursuant
to an exemption from such requirements.
Each holder of the Old Notes who wishes to exchange Old Notes for New Notes
in the Exchange Offer will be required to make certain representations,
including that (i) any New Notes acquired pursuant to the Exchange Offer are
being obtained in the ordinary course of such holder's business, (ii) such
holder has no arrangements with any person to participate in the distribution of
such New Notes and (iii) such holder is not an "affiliate," as defined under
Rule 405 of the Securities Act of Alpine or, if such holder is an affiliate,
that such holder will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable. If the holder is
not a broker-dealer, it will be required to represent that it is not engaged in,
and does not intend to engage in, a distribution of New Notes. If the holder is
a Participating Broker-Dealer that will receive New Notes for its own account in
exchange for Old Notes that were acquired as a result of market-making
activities or other trading activities, it will be required to acknowledge that
it will deliver a prospectus in connection with any resale of such New Notes;
however, by so acknowledging and
22
<PAGE>
by delivering a prospectus, such holder will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. The Commission has
taken the position that Participating Broker-Dealers may fulfill their
prospectus delivery requirements with respect to the New Notes (other than a
resale of an unsold allotment from the original sale of the Old Notes) with this
Prospectus. Under the Registration Rights Agreement, Alpine is required to allow
Participating Broker-Dealers and other persons, if any, subject to similar
prospectus delivery requirements to use this Prospectus in connection with the
resale of such New Notes.
The Registration Rights Agreement provides that, in the event that any
changes in law or the applicable interpr etations of the staff of the Commission
do not permit Alpine to effect the Exchange Offer or if for any other reason the
Registration Statement is not declared effective within 90 days after the
original issuance of the Old Notes or the Exchange Offer is not consummated
within 120 days after the original issue of the Old Notes or upon the request of
any Initial Purchaser under certain circumstances, Alpine and the Subsidiary
Guarantors will, in lieu of effecting the registration of the New Notes pursuant
to the Registration Statement and at Alpine's cost, (a) as promptly as
practicable, file with the Commission the Shelf Registration Statement covering
resales of the Old Notes, (b) use their best efforts to cause the Shelf
Registration Statement to be declared effective under the Securities Act by the
120th day after the original issue of the Old Notes (or promptly in the event of
a request by any Initial Purchaser) and (c) use their best efforts to keep
effective the Shelf Registration Statement for a period of three years after its
effective date (or for a period of one year after such effective date if such
Shelf Registration Statement is filed at the request of any Initial Purchaser
or, for such shorter period, when all of the Old Notes covered by the Shelf
Registration Statement have been sold pursuant thereto). Alpine will, in the
event of the filing of a Shelf Registration Statement, provide to each holder of
the Old Notes copies of the prospectus which is a part of the Shelf Registration
Statement, notify each such holder when the Shelf Registration Statement for the
Old Notes has become effective and take certain other actions as are required to
permit unrestricted resales of the Old Notes. A holder of Old Notes who sells
such Old Notes pursuant to the Shelf Registration Statement generally will be
required to be named as a selling securityholder in the related prospectus and
to deliver the prospectus to purchasers, will be subject to certain of the civil
liability provisions under the Securities Act in connection with such sales and
will be bound by the provisions of the Registration Rights Agreement which are
applicable to such a holder (including certain indemnification obligations). In
addition, each holder of the Old Notes will be required to deliver information
to be used in connection with the Shelf Registration Statement and to provide
comments on the Shelf Registration Statement within the time periods set forth
in the Registration Rights Agreement in order to have their Old Notes included
in the Shelf Registration Statement and to benefit from the provisions regarding
the increase in interest rate set forth in the following paragraph.
In the event that either (i) the Registration Statement is not filed with
the Commission on or prior to the 30th day following the date of original issue
of the Old Notes, (ii) the Registration Statement is not declared effective on
or prior to the 90th day following the date of original issue of the Old Notes
or (iii) the Exchange Offer is not consummated on or prior to the 120th day
following the date of original issue of the Old Notes or a Shelf Registration
Statement is not declared effective on or prior to the 120th day following the
date of original issue of the Old Notes as described above, the interest rate
stated on the Old Notes shall be increased by one-quarter of one percent per
annum, which rate will be increased by an additional one quarter of one percent
per annum for each 90-day period that any such additional interest continues to
accrue; provided that the aggregate increase in such annual interest rate may in
no event exceed one percent. Upon (x) the filing of the Registration Statement
in the case of clause (i) above, (y) the effectiveness of the Registration
Statement in the case of clause (ii) above or (z) the day before the date of the
consummation of the Exchange Offer or the effectiveness of a Shelf Registration
Statement, as the case may be, in the case of clause (iii) above, the interest
rate stated on the Old Notes from the date of such filing, effectiveness or day
before the date of the consummation, as the case may be, will be reduced to the
original interest rate of the Old Notes; provided, however, that, if after any
such reduction in interest rate, a different event specified in clause (i), (ii)
or (iii) above occurs, the interest rate may again be increased pursuant to the
foregoing provisions.
23
<PAGE>
The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, all the provisions of the Registration Rights
Agreement, a copy of which has been filed as an exhibit to the Registration
Statement.
As of the date of this Prospectus, $153,000,000 aggregate principal amount
of the Old Notes is outstanding. In connection with the issuance of the Old
Notes, Alpine arranged for the Old Notes initially purchased by qualified
institutional buyers, as defined pursuant in Rule 144A under the Securities Act
("Qualified Institutional Buyers"), to be issued and transferable in book-entry
form through the facilities of DTC, acting as depositary. The New Notes will
also be issuable and transferable in book-entry form through DTC.
This Prospectus, together with the accompanying Letter of Transmittal is
being sent to all registered holders of Old Notes as of , 1995 (the
"Record Date").
Alpine shall be deemed to have accepted validly tendered Old Notes when, as
and if Alpine has given oral or written notice thereof to the Exchange Agent.
See "Exchange Agent." The Exchange Agent will act as agent for the tendering
holders of Old Notes for the purpose of receiving New Notes from Alpine and
delivering New Notes to such holders.
If any tendered Old Notes are not accepted for exchange because of an
invalid tender or the occurrence of certain other events set forth herein,
certificates for any such unaccepted Old Notes will be returned, without
expense, to the tendering holder thereof as promptly as practicable after the
Expiration Date.
Holders of Old Notes who tender in the Exchange Offer will not be required
to pay brokerage commissions or fees or, subject to the instructions in the
Letter of Transmittal, transfer taxes with respect to the exchange of Old Notes
pursuant to the Exchange Offer. Alpine will pay all charges and expenses, other
than certain applicable taxes, in connection with the Exchange Offer. See "Fees
and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean , 1995, unless Alpine, in
its sole discretion, extends the Exchange Offer, in which case the term
"Expiration Date" shall mean the latest date to which the Exchange Offer is
extended.
In order to extend the Expiration Date, Alpine will notify the Exchange
Agent of any extension by oral or written notice and will mail to the record
holders of Old Notes an announcement thereof, each prior to 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date. Such announcement may state that Alpine is extending the Exchange Offer
for a specified period of time.
Alpine reserves the right (i) to delay acceptance of any Old Notes, to
extend the Exchange Offer or to terminate the Exchange Offer and to refuse to
accept Old Notes not previously accepted, if any of the conditions set forth
herein under "Termination" shall have occurred and shall not have been waived by
Alpine (if permitted to be waived by Alpine), by giving oral or written notice
of such delay, extension or termination to the Exchange Agent and (ii) to amend
the terms of the Exchange Offer in any manner deemed by it to be advantageous to
the holders of the Old Notes. Any such delay in acceptance, extension,
termination or amendment will be followed as promptly as practicable by oral or
written notice thereof. If the Exchange Offer is amended in a manner determined
by Alpine to constitute a material change, Alpine will promptly disclose such
amendment in a manner reasonably calculated to inform the holders of the Old
Notes of such amendment.
Without limiting the manner in which Alpine may choose to make public
announcements of any delay in acceptance, extension, termination or amendment of
the Exchange Offer, Alpine shall have no obligation to publish, advertise or
otherwise communicate any such public announcement, other than by making a
timely release to the Dow Jones News Service.
INTEREST ON THE NEW NOTES
Interest on each New Note will accrue from the last Interest Payment Date on
which interest was paid on the Old Note tendered in exchange therefor or, if no
interest has been paid on such tendered Old Note,
24
<PAGE>
from July 21, 1995. Holders of Old Notes whose Old Notes are accepted for
exchange will be deemed to have waived the right to receive any payment in
respect of interest on the Old Notes accrued from the last Interest Payment Date
or July 21, 1995 (as the case may be) to the date of the issuance of the New
Notes. Consequently, holders who exchange their Old Notes for New Notes will
receive the same interest payment on the same Interest Payment Date that they
would have received had they not accepted the Exchange Offer. Interest on the
New Notes is payable semi-annually on January 15 and July 15 of each year
accruing from the last Interest Payment Date or, in the case of the first
payment, July 21, 1995 at a rate of 12 1/4% per annum.
PROCEDURES FOR TENDERING
To tender in the Exchange Offer, a holder must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal, and mail or otherwise
deliver such Letter of Transmittal or such facsimile, together with the Old
Notes (unless such tender is being effected pursuant to the procedure for
book-entry transfer described below) and any other required documents, to the
Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date.
Any financial institution that is a participant in DTC's Book-Entry Transfer
Facility system may make book-entry delivery of the Old Notes by causing DTC to
transfer such Old Notes into the Exchange Agent's account in accordance with
DTC's procedure for such transfer. Although delivery of Old Notes may be
effected through book-entry transfer into the Exchange Agent's account at DTC,
the Letter of Transmittal (or facsimile thereof), with any required signature
guarantees and any other required documents, must, in any case, be transmitted
to and received or confirmed by the Exchange Agent at its addresses set forth
herein under "Exchange Agent" prior to 5:00 p.m., New York City time, on the
Expiration Date. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH ITS PROCEDURES
DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The tender by a holder of Old Notes will constitute an agreement between
such holder and Alpine in accordance with the terms and subject to the
conditions set forth herein and in the Letter of Transmittal.
Delivery of all documents must be made to the Exchange Agent at its address
set forth herein. Holders may also request that their respective brokers,
dealers, commercial banks, trust companies or nominees effect such tender for
such holders.
The method of delivery of Old Notes and the Letter of Transmittal and all
other required documents to the Exchange Agent is at the election and risk of
the holders. Instead of delivery by mail, it is recommended that holders use an
overnight or hand delivery service. In all cases, sufficient time should be
allowed to assure timely delivery. No Letter of Transmittal or Old Notes should
be sent to Alpine.
Only a holder of Old Notes may tender such Old Notes in the Exchange Offer.
The term "holder" with respect to the Exchange Offer means any person in whose
name Old Notes are registered on the books of Alpine or any other person who has
obtained a properly completed bond power from the registered holder, or any
person whose Old Notes are held of record by DTC who desires to deliver such Old
Notes by book-entry transfer at DTC.
Any beneficial holder whose Old Notes are registered in the name of his
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such registered holder promptly and instruct such
registered holder to tender on his behalf. If such beneficial holder wishes to
tender on his own behalf, such beneficial holder must, prior to completing and
executing the Letter of Transmittal and delivering his Old Notes, either make
appropriate arrangements to register ownership of the Old Notes in such holder's
name or obtain a properly completed bond power from the registered holder. The
transfer of record ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, must be guaranteed by a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15
under the Exchange Act (an "Eligible Institution") unless the Old Notes tendered
pursuant thereto are tendered (i) by a registered
25
<PAGE>
holder (including any participant in DTC whose name appears on a security
position listed as the owner of Old Notes) who has not completed the box
entitled "Special Issuance Instructions" or "Special Delivery Instructions" on
the Letter of Transmittal or (ii) for the account of an Eligible Institution.
If the Letter of Transmittal is signed by a person other than the registered
holder of any Old Notes listed therein, such Old Notes must be endorsed or
accompanied by appropriate bond powers which authorize such person to tender the
Old Notes on behalf of the registered holder, in either case signed as the name
of the registered holder or holders appears on the Old Notes.
If the Letter of Transmittal or any Old Notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and unless waived by Alpine, evidence
satisfactory to Alpine of their authority to so act must be submitted with the
Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of the tendered Old Notes will be determined
by Alpine in its sole discretion, which determination will be final and binding.
Alpine reserves the absolute right to reject any and all Old Notes not properly
tendered or any Old Notes Alpine's acceptance of which would, in the opinion of
counsel for Alpine, be unlawful. Alpine also reserves the absolute right to
waive any irregularities or conditions of tender as to particular Old Notes.
Alpine's interpretation of the terms and conditions of the Exchange Offer
(including the instructions in the Letter of Transmittal) will be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Old Notes must be cured within such time as Alpine
shall determine. Neither Alpine, the Exchange Agent nor any other person shall
be under any duty to give notification of defects or irregularities with respect
to tenders of Old Notes nor shall any of them incur any liability for failure to
give such notification. Tenders of Old Notes will not be deemed to have been
made until such irregularities have been cured or waived. Any Old Notes received
by the Exchange Agent that are not properly tendered and as to which the defects
or irregularities have not been cured or waived will be returned without cost by
the Exchange Agent to the tendering holder of such Old Notes unless otherwise
provided in the Letter of Transmittal, as soon as practicable following the
Expiration Date.
In addition, Alpine reserves the right in its sole discretion to (a)
purchase or make offers for any Old Notes that remain outstanding subsequent to
the Expiration Date, or, as set forth under "Termination," to terminate the
Exchange Offer and (b) to the extent permitted by applicable law, purchase Old
Notes in the open market, in privately negotiated transactions or otherwise. The
terms of any such purchases or offers may differ from the terms of the Exchange
Offer.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available, or (ii) who cannot deliver their Old Notes, the Letter of
Transmittal or any other required documents to the Exchange Agent prior to the
Expiration Date, or if such holder cannot complete the procedure for book-entry
transfer on a timely basis, may effect a tender if:
(a) the tender is made through an Eligible Institution;
(b) prior to the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Notice of Guaranteed
Delivery (by facsimile transmission, mail or hand delivery) setting forth the
name and address of the holder of the Old Notes, the certificate number or
numbers of such Old Notes and the principal amount of Old Notes tendered,
stating that the tender is being made thereby, and guaranteeing that, within
five business days after the Expiration Date, the Letter of Transmittal (or
facsimile thereof), together with the certificate(s) representing the Old Notes
to be tendered in prior form for transfer and any other documents required by
the Letter of Transmittal, will be deposited by the Eligible Institution with
the Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal (or facsimile
thereof), together with the certificate(s) representing all tendered Old Notes
in proper form for transfer (or confirmation of a book-
26
<PAGE>
entry transfer into the Exchange Agent's account at DTC of Old Notes delivered
electronically) and all other documents required by the Letter of Transmittal
are received by the Exchange Agent within five business days after the
Expiration Date.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the business day prior to
the Expiration Date, unless previously accepted for exchange.
To withdraw a tender of Old Notes in the Exchange Offer, a written or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m., New York City time, on
the business day prior to the Expiration Date and prior to acceptance for
exchange thereof by Alpine. Any such notice of withdrawal must (i) specify the
name of the person having deposited the Old Notes to be withdrawn (the
"Depositor"), (ii) identify the Old Notes to be withdrawn (including the
certificate number or numbers and principal amount of such Old Notes), (iii) be
signed by the Depositor in the same manner as the original signature on the
Letter of Transmittal by which such Old Notes were tendered (including any
required signature guarantees) or be accompanied by documents of transfer
sufficient to permit the Trustee with respect to the Old Notes to register the
transfer of such Old Notes into the name of the Deposit or withdrawing the
tender and (iv) specify the name in which any such Old Notes are to be
registered, if different from that of the Depositor. All questions as to the
validity, form and eligibility (including time of receipt) of such withdrawal
notices will be determined by Alpine, whose determination shall be final and
binding on all parties. Any Old Notes so withdrawn will be deemed not to have
been validly tendered for purposes of the Exchange Offer and no New Notes will
be issued with respect thereto unless the Old Notes so withdrawn are validly
retendered. Any Old Notes which have been tendered but which are not accepted
for exchange will be returned to the holder thereof without cost to such holder
as soon as practicable after withdrawal, rejection of tender or termination of
the Exchange Offer. Properly withdrawn Old Notes may be retendered by following
one of the procedures described above under "Procedures for Tendering" at any
time prior to the Expiration Date.
TERMINATION
Notwithstanding any other term of the Exchange Offer, Alpine will not be
required to accept for exchange, or exchange New Notes for, any Old Notes not
theretofore accepted for exchange, and may terminate or amend the Exchange Offer
as provided herein before the acceptance of such Old Notes if: (i) any action or
proceeding is instituted or threatened in any court or by or before any
governmental agency with respect to the Exchange Offer, which, in Alpine's
judgment, might materially impair Alpine's ability to proceed with the Exchange
Offer or (ii) any law, statute, rule or regulation is proposed, adopted or
enacted, or any existing law, statute, rule or regulation is interpreted by the
staff of the Commission in a manner, which, in Alpine's judgment, might
materially impair Alpine's ability to proceed with the Exchange Offer.
If Alpine determines that it may terminate the Exchange Offer, as set forth
above, Alpine may (i) refuse to accept any Old Notes and return any Old Notes
that have been tendered to the holders thereof, (ii) extend the Exchange Offer
and retain all Old Notes tendered prior to the Expiration Date of the Exchange
Offer, subject to the rights of such holders of tendered Old Notes to withdraw
their tendered Old Notes, (iii) waive such termination event with respect to the
Exchange Offer and accept all properly tendered Old Notes that have not been
withdrawn. If such waiver constitutes a material change in the Exchange Offer,
Alpine will disclose such change by means of a supplement to this Prospectus
that will be distributed to each registered holder of Old Notes, and Alpine will
extend the Exchange Offer for a period of five to 10 business days, depending
upon the significance of the waiver and the manner of disclosure to the
registered holders of the Old Notes, if the Exchange Offer would otherwise
expire during such period.
27
<PAGE>
EXCHANGE AGENT
Marine Midland Bank, the Trustee under the Indenture, has been appointed as
Exchange Agent for the Exchange Offer. Questions and requests for assistance and
requests for additional copies of this Prospectus or of the Letter of
Transmittal should be directed to the Exchange Agent addressed as follows:
<TABLE>
<S> <C>
By Mail: Marine Midland Bank
140 Broadway--A Level
Corporate Trust Operations
New York, New York 10005-1180
By Hand or Overnight Marine Midland
Courier: Bank
140 Broadway--A Level
Corporate Trust Operations
New York, New York 10005-1180
Facsimile (212) 658-2292
Transmission:
Confirm by Telephone: (212) 658-5931
</TABLE>
FEES AND EXPENSES
The expenses of soliciting tenders pursuant to the Exchange Offer will be
borne by Alpine. The principal solicitation for tenders pursuant to the Exchange
Offer is being made by mail. Additional solicitations may be made by officers
and regular employees of Alpine and its affiliates in person, by telegraph or
telephone.
Alpine will not make any payments to brokers, dealers or other persons
soliciting acceptances of the Exchange Offer. Alpine, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
the Exchange Agent for its reasonable out-of-pocket expenses in connection
therewith. Alpine may also pay brokerage houses and other custodians, nominees
and fiduciaries the reasonable out-of-pocket expenses incurred by them in
forwarding copies of this Prospectus, Letters of Transmittal and related
documents to the beneficial owners of the Old Notes and in handling or
forwarding tenders for exchange.
The expenses to be incurred in connection with the Exchange Offer, including
fees and expenses of the Exchange Agent and Trustee and accounting and legal
fees, will be paid by Alpine.
Alpine will pay all transfer taxes, if any, applicable to the exchange of
Old Notes pursuant to the Exchange Offer. If, however, certificates representing
New Notes or Old Notes for principal amounts not tendered or accepted for
exchange are to be delivered to, or are to be registered or issued in the name
of, any person other than the registered holder of the Old Notes tendered, or if
tendered Old Notes are registered in the name of any person other than the
person signing the Letter of Transmittal, or if a transfer tax is imposed for
any reason other than the exchange of Old Notes pursuant to the Exchange Offer,
then the amount of any such transfer taxes (whether imposed on the registered
holder or any other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
ACCOUNTING TREATMENT
No gain or loss for accounting purposes will be recognized by Alpine upon
the consummation of the Exchange Offer. The expenses of the Exchange Offer will
be amortized by Alpine over the term of the New Notes under generally accepted
accounting principles.
28
<PAGE>
CAPITALIZATION
The following table sets forth (i) the historical consolidated
capitalization of Alpine at April 30, 1995 and (ii) such consolidated
capitalization as adjusted to give effect to the Alcatel Acquisition, the
Refinancing, the PolyVision Transactions and the other transactions referred to
herein. This table should be read in conjunction with the Pro Forma Condensed
Combined Financial Statements and the Consolidated Financial Statements of
Alpine, including the notes thereto, and the other information contained in the
Form 10-K
<TABLE>
<CAPTION>
AT APRIL 30, 1995
-----------------------
HISTORICAL AS ADJUSTED
---------- -----------
<S> <C> <C>
SHORT-TERM DEBT:
Adience Credit Facility (1).......................................................... $ 12,345 $ --
Alpine 13.5% Senior Notes............................................................ 20,790 --
Current portion of long-term debt (2)................................................ 2,022 1,294
---------- -----------
Total short-term debt.............................................................. $ 35,157 $ 1,294
---------- -----------
---------- -----------
LONG-TERM DEBT: (2)
Alpine
New Credit Agreement (3) (4)....................................................... $ -- $ 50,000
Notes (5).......................................................................... -- 140,358
13.5% Debentures................................................................... 1,551 --
10% Convertible Senior Subordinated Notes.......................................... 860 860
Other.............................................................................. 123 123
Superior
Bank revolving credit loans (1).................................................... 16,533 --
Bank term loan (1)................................................................. 5,386 --
Alcatel Acquisition Notes (3)...................................................... -- --
Capital lease...................................................................... 5,000 5,000
Adience
Senior Notes (3)................................................................... 44,386 4,625
Capital leases and other........................................................... 1,718 1,718
DNE
Mortgage Note...................................................................... 4,962 4,962
Acquisition Note................................................................... 1,891 --
Credit Facility (1)................................................................ 627 --
Capital leases and other........................................................... 985 985
---------- -----------
Total long-term debt............................................................. 84,022 208,631
TOTAL STOCKHOLDERS' EQUITY: (6)
8% cumulative convertible preferred stock............................................ 11,823 14,068
9% cumulative convertible preferred stock............................................ 1,750 1,250
9% cumulative convertible preferred stock............................................ 177 177
8.5% cumulative convertible preferred stock.......................................... 3,500 --
Common stock......................................................................... 1,743 1,827
Capital in excess of par............................................................. 103,114 107,030
Gain on PolyVision Transactions...................................................... -- 9,310
Cumulative translation adjustment.................................................... 144 144
Accumulated deficit.................................................................. (76,050) (81,076)
---------- -----------
46,201 52,730
Less: Treasury stock................................................................... (1,229) (1,229)
Receivable from stockholder....................................................... (314) (314)
---------- -----------
Total stockholders' equity............................................................. 44,658 51,187
---------- -----------
Total capitalization................................................................. $ 128,680 $ 259,818
---------- -----------
---------- -----------
</TABLE>
(FOOTNOTES ON FOLLOWING PAGE)
29
<PAGE>
(1) The Adience Credit Facility was terminated upon consummation of the offering
of the Old Notes. The DNE Credit Facility is expected to be terminated in
the near future. Superior's bank credit agreement was terminated at the time
of the Alcatel Acquisition.
(2) For a description of Alpine's long-term debt at April 30, 1995, see Note (9)
to Alpine's Consolidated Financial Statements.
(3) For a description of the New Credit Agreement and the Adience Senior Notes,
see "Description of Certain Indebtedness."
(4) Alpine estimates that $50.0 million of borrowings under the New Credit
Agreement will be required to complete the Refinancing. If the Offering and
the Refinancing had been consummated on April 30, 1995, which is the
assumption contained in the Pro Forma Condensed Combined Financial
Statements in the Form 10-K, Alpine estimates that $60.3 million of
borrowings under the New Credit Agreement would have been required. A lower
amount of borrowings was required in July 1995 because Alpine used a portion
of its cash flow generated after April 30, 1995 to complete the Refinancing.
(5) Represents the issue price of the $153.0 million principal amount of the Old
Notes.
(6) For a description of the transactions resulting in adjustments to these
items of stockholders' equity, see Notes (i), (p), (r) and (s) to the Pro
Forma Condensed Combined Financial Statements.
30
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA OF ALPINE
Set forth below are certain selected historical consolidated financial data
of Alpine. This information should be read in conjunction with the Consolidated
Financial Statements of Alpine and related notes thereto appearing and
"Management's Discussion and Analysis" in the Form 10-K. The selected historical
consolidated financial data for, and as of the end of, each of the fiscal years
in the five-year period ended April 30, 1995 are derived from the audited
consolidated financial statements of Alpine, which have been restated to reflect
the results of operations of APV and Posterloid as discontinued.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED APRIL 30, (1)
-----------------------------------------------------
1991 1992 1993 1994 1995
--------- --------- --------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales................................................... $ 2,994 $ 6,786 $ 27,897 $ 68,510 $ 198,135
Cost of sales............................................... 1,807 4,239 15,915 56,250 169,125
--------- --------- --------- --------- ---------
Gross profit........................................ 1,187 2,547 11,982 12,260 29,010
Selling, general and administrative expenses................ 3,144 4,808 10,482 12,168 20,487
Amortization of goodwill and other intangible charges....... 269 283 395 2,292 1,527
--------- --------- --------- --------- ---------
Operating income (loss)................................. (2,226) (2,544) 1,105 (2,200) 6,996
Interest income............................................. 356 484 209 242 345
Interest expense............................................ (3,026) (3,127) (2,301) (2,363) (8,197)
Other income (expense), net................................. (540) (604) (1,469) (506) 28
--------- --------- --------- --------- ---------
(Loss) from continuing operations before income taxes... (5,436) (5,791) (2,456) (4,827) (828)
Provision for income taxes.................................. -- -- -- 68 348
--------- --------- --------- --------- ---------
(Loss) from continuing operations....................... (5,436) (5,791) (2,456) (4,895) (1,176)
Income (loss) from discontinued operations (2).............. 2,027 (3,082) (8,377) (25,236) (4,868)
--------- --------- --------- --------- ---------
(Loss) before extraordinary item........................ (3,409) (8,873) (10,833) (30,131) (6,044)
Extraordinary item -- gain (loss) on early extinguishment of
debt (3)................................................... 1,423 888 (1,262) (47) --
--------- --------- --------- --------- ---------
Net (loss).............................................. $ (1,986) $ (7,985) $ (12,095) $ (30,178) $ (6,044)
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
OTHER DATA:
Depreciation and amortization............................... $ 687 $ 957 $ 960 $ 4,425 $ 6,169
Other non-cash charges...................................... 979 1,513 870 497 504
Capital expenditures -- continuing operations............... -- 298 422 1,565 2,275
Ratio of earnings to fixed charges (4)...................... -- -- -- -- --
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital............................................. $ 6,404 $ 9,745 $ 7,256 $ 24,594 $ 7,080
Total assets................................................ 26,326 34,312 27,998 113,796 233,778
Total debt.................................................. 18,428 19,817 13,637 43,745 119,179
Preferred stock............................................. 986 5,177 4,677 6,177 17,250
Total stockholders' equity.................................. 247 5,867 10,602 47,998 44,658
<FN>
--------------------------
(1) Alpine's results of operations have been significantly impacted by
acquisitions in fiscal 1993, 1994 and 1995. On February 22, 1992, Alpine
acquired DNE for a cash purchase price of $7.1 million. On November 9,
1993, Alpine acquired Superior for $60.8 million in cash and common stock.
On December 21, 1994, Alpine acquired Adience for $12.4 million in a
combination of cash, Alpine 8% Preferred Stock and PolyVision common stock.
See "Management's Discussion and Analysis."
(2) In November 1994, Alpine adopted a plan to dispose of its information
display segment consisting of APV and Posterloid. The results of operations
for this segment have been reflected as income (loss) from discontinued
operations for all periods presented. See Note 5 of Alpine's Consolidated
Financial Statements.
(3) The extraordinary gain (loss) recorded during the fiscal years ended April
1991, 1992, 1993 and 1994 is related to the early extinguishment of $3.5
million, $2.4 million, $6.0 million and $0.1 million, principal amount,
respectively, of Alpine's debt, principally the Alpine 13.5% Debentures.
(4) For the purposes of this computation, earnings are defined as income (loss)
before income taxes plus fixed charges. Fixed charges consist of interest
expense (including amortization of deferred debt issuance costs) and the
portion of rental expense that is representative of the interest factor
(deemed to be one-third of minimum operating lease rentals). As a result of
losses incurred for the periods presented, earnings were insufficient to
cover fixed charges by $5.4 million in fiscal 1991, $5.8 million in fiscal
1992, $2.5 million in fiscal 1993, $4.8 million in fiscal 1994 and $0.8
million in fiscal 1995.
</TABLE>
31
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA OF THE ALCATEL BUSINESS
Set forth below are certain historical financial data of the Alcatel
Business. This information should be read in conjunction with the combined
financial statements of the Copper Cable Group of Alcatel NA Cable System, Inc.
and Alcatel Canada Wire and Cable, Inc. and related notes thereto appearing
elsewhere herein and with "Management's Discussion and Analysis" in the Form
10-K. The selected historical financial data for, and as of the end of, each of
the fiscal years in the three-year period ended December 31, 1994 are derived
from the audited combined financial statements of The Copper Cable Group of
Alcatel NA Cable System, Inc. and Alcatel Canada Wire and Cable, Inc.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FISCAL YEAR ENDED DECEMBER 31, MARCH 31,
---------------------------------- --------------------
1992 1993 1994 1994 1995
---------- ---------- ---------- --------- ---------
(IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales.............................................. $ 228,852 $ 212,610 $ 194,651 $ 37,677 $ 54,138
Cost of goods sold..................................... 207,476 189,940 182,264 35,906 52,339
Restructuring costs (1)................................ 12,000 -- -- -- --
---------- ---------- ---------- --------- ---------
Gross profit......................................... 9,376 22,670 12,387 1,771 1,799
Selling, general and administrative expenses........... 5,674 5,638 4,747 922 683
---------- ---------- ---------- --------- ---------
Operating income before corporate allocations........ 3,702 17,032 7,640 849 1,116
Management fees (2).................................... 3,534 5,907 4,971 1,201 1,275
Administrative fees (3)................................ 3,389 2,179 1,254 416 226
---------- ---------- ---------- --------- ---------
Operating income (loss).............................. (3,221) 8,946 1,415 (768) (385)
Interest income (expense) net.......................... (1,766) (1,944) (1,980) 755 (495)
---------- ---------- ---------- --------- ---------
Income (loss) from operations before income taxes.... (4,987) 7,002 (565) (13) (880)
Provision (benefit) for income taxes................... (1,069) 2,191 29 277 (146)
---------- ---------- ---------- --------- ---------
Net income (loss).................................... $ (3,918) $ 4,811 $ (594) $ (290) $ (734)
---------- ---------- ---------- --------- ---------
---------- ---------- ---------- --------- ---------
OTHER DATA:
Depreciation and amortization.......................... $ 5,838 $ 6,208 $ 6,219 $ 1,464 $ 1,569
Capital expenditures................................... 7,076 7,569 4,294 1,189 335
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital.................................................... $ 11,573 $ 10,044
Total assets....................................................... 118,506 119,352
Owner's investment................................................. 52,820 51,217
<FN>
------------------------
(1) During fiscal 1992 a restructuring charge was recorded in connection with
the shut-down of the Fordyce, Arkansas manufacturing facility.
(2) Represents service charges, research and development assessments and
certain international sale commissions paid by the Alcatel Business to
certain affiliated companies.
(3) Affiliates of the Alcatel Business provided legal, accounting, tax,
treasury, insurance, employee benefits, data processing, transportation and
other services. Expenses that were directly attributable to the Alcatel
Business were charged directly. Expenses that were not directly
attributable to the Alcatel Business were allocated to the Alcatel Business
based upon a defined formula.
</TABLE>
32
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA OF ADIENCE
Set forth below are certain selected historical consolidated financial data
of Adience. This information should be read in conjunction with the Consolidated
Financial Statements of Adience and related notes thereto appearing elsewhere
herein and "Management's Discussion and Analysis" in the Form 10-K. The selected
consolidated financial data for, and as of the end of, each of the fiscal years
in the five-year period ended December 31, 1994 are derived from the audited
consolidated financial statements of Adience. Adience's basis of accounting for
financial reporting purposes changed as of June 30, 1993 in connection with its
Reorganization under Chapter 11 of the United States Bankruptcy Code. The
financial data for the periods after June 30, 1993 are not comparable to the
financial data for the periods prior to June 30, 1993 and accordingly are
separated with a vertical line.
<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, --------------------- YEAR ENDED
---------------------------------- JUNE 30, DEC. 31, DECEMBER 31,
1990 1991 1992 1993 1993 1994
---------- ---------- ---------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
STATEMENT OF OPERATIONS DATA:
Net sales.................................. $ 135,591 $ 110,410 $ 97,276 $ 44,431 $ 54,572 $ 96,273
Cost of goods sold......................... 101,261 90,740 81,262 35,928 47,779 84,468
---------- ---------- ---------- --------- ---------- ------------
Gross profit............................. 34,330 19,670 16,014 8,503 6,793 11,805
Selling, general and administrative
expenses.................................. 17,327 20,738 22,829 10,510 9,302 18,180
Amortization of intangibles................ -- -- -- -- 9,011 1,053
---------- ---------- ---------- --------- ---------- ------------
Operating income (loss).................. 17,003 (1,068) (6,815) (2,007) (11,520) (7,428)
Interest income............................ 1,106 769 (17) 245 615 574
Interest expense........................... (12,583) (12,272) (13,302) (2,271) (3,781) (7,653)
Reorganization income (expense)............ -- -- (5,798) 20,543 (746) --
Other income (expense), net................ -- (1,082) -- -- -- --
---------- ---------- ---------- --------- ---------- ------------
Income (loss) from continuing operations
before tax.............................. 5,526 (13,653) (25,932) 16,510 (15,432) (14,507)
Provision for income taxes (benefit)....... 2,705 (3,490) (1,031) 260 (808) 319
---------- ---------- ---------- --------- ---------- ------------
Income (loss) from continuing
operations.............................. 2,821 (10,163) (24,901) 16,250 (14,624) (14,826)
Income (loss) from discontinued
operations................................ (262) (2,012) (4,956) (398) 257 (5,949)
---------- ---------- ---------- --------- ---------- ------------
Income (loss) before extraordinary
item.................................... 2,559 (12,175) (29,857) 15,852 (14,367) (20,775)
Extraordinary item -- gain on early
extinguishment of debt.................... 276 -- -- 17,480 -- --
---------- ---------- ---------- --------- ---------- ------------
Net income (loss)........................ $ 2,835 $ (12,175) $ (29,857) $ 33,332 $ (14,367) $ (20,775)
---------- ---------- ---------- --------- ---------- ------------
---------- ---------- ---------- --------- ---------- ------------
OTHER DATA:
Depreciation and amortization.............. $ 5,640 $ 8,948 $ 5,660 $ 1,675 $ 11,242 $ 6,050
Capital expenditures....................... 7,758 3,948 1,898 635 894 2,278
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital............................ $ 28,793 $ 20,089 $ 12,470 $ 8,255 $ 5,430 $ (2,834)
Total assets............................... 104,721 83,305 58,344 90,178 94,772 81,954
Total debt................................. 70,165 68,429 67,374 46,210 46,211 46,450
Shareholders' equity (deficit)............. 6,537 (5,138) (34,677) 24,040 9,509 (11,483)
</TABLE>
33
<PAGE>
DESCRIPTION OF CERTAIN INDEBTEDNESS
NEW CREDIT AGREEMENT
Following is a description of the New Credit Agreement among Alpine, the
lenders party thereto and Shawmut Capital Corporation, as agent (the "Agent").
THE FACILITY. The New Credit Agreement provides for an $85.0 million
revolving credit facility maturing in July 2000 (the "Alpine Revolver"), under
which $85.0 million may be borrowed if certain conditions are met. The New
Credit Agreement includes a letter of credit facility under which up to $5.0
million of the Alpine Revolver will be available for the issuance of standby or
commercial letters of credit.
The primary obligor with respect to the New Credit Agreement is Alpine,
which will in turn lend a portion of the proceeds to Superior and Adience. It is
expected that in the near future the DNE Credit Facility will be terminated and
Alpine will also loan proceeds to the DNE Group.
The Alpine Revolver may be used for one or more of the following purposes:
to make loans to certain of Alpine's subsidiaries, to pay interest on the Notes,
to pay certain transaction costs, to fund corporate overhead and for other
permitted corporate purposes. Alpine's subsidiaries may use the proceeds of
loans made to them by Alpine to repay indebtedness of those subsidiaries and for
working capital purposes.
The aggregate amount of loans outstanding at any time under the Alpine
Revolver may not exceed a borrowing base in an amount based on percentages of
the accounts receivable and inventory of Superior and Adience, reduced by
certain reserves. The maximum borrowing base is $85.0 million. Alpine is
required to maintain on a rolling 30-day basis an average borrowing availability
of at least $5.0 million. At the closing of this offering, Alpine expects to
have borrowing availability of at least $30.0 million after giving effect to the
initial borrowing of $50.0 million on July 21, 1995.
INTEREST AND COMMITMENT FEES. Loans under the New Credit Agreement bear
interest at either the base rate of Shawmut Bank Connecticut, National
Association ("Shawmut Bank"), plus 0.375% per annum, or an adjusted LIBOR rate,
plus 2.25% per annum. Alpine will also pay certain fees of the Agent and the
lenders, including a commitment fee of 0.375% per annum for the unused portion
of the facility.
REPAYMENT. The principal balance of the Alpine Revolver is due upon
termination of the credit facility in July 2000. Earlier payments must be made
upon any repayment of loans to subsidiaries. Alpine may terminate the New Credit
Agreement with a prepayment penalty during the first three years, and thereafter
without penalty.
COLLATERAL. Loans under the New Credit Agreement are guaranteed by Superior
and Adience and Superior's Canadian subsidiary will guarantee Superior's
obligations under its guarantee of the New Credit Agreement (or, alternatively,
such Subsidiary may directly guarantee the New Credit Agreement). Loans under
the New Credit Agreement are secured by substantially all of Alpine's assets
(other than the capital stock of its subsidiaries, capital stock in PolyVision
and real estate and other fixed assets), including a pledge of Alpine's loans to
Superior, Adience and, if made, the DNE Group. The subsidiary guarantees and the
loans by Alpine to its subsidiaries are secured primarily by the working capital
of those subsidiaries.
All payments of any kind to Alpine will be collected through a lock box
account in the Agent's name or under its control. All such payments are remitted
to the Agent and applied to reduce Alpine's obligations under the New Credit
Facility.
CANADIAN FACILITY. In conjunction with the credit facility to be provided
under the New Credit Agreement, Superior's and Adience's Canadian subsidiaries
entered into separate revolving credit facilities with a Canadian lender with an
aggregate maximum principal amount of Cdn$13.0 million. The Canadian facilities
permit borrowings under a borrowing base formula similar to that used for the
Superior and Adience facilities. Those facilities will be supported by
irrevocable standby letters of credit issued by Shawmut Bank in an aggregate
amount equal to the aggregate maximum amounts available to be drawn under those
facilities. The Canadian facilities are also secured by substantially all the
assets of Superior's and Adience's Canadian subsidiaries, other than real estate
and other fixed assets. Those subsidiaries have entered into
34
<PAGE>
reimbursement and indemnity agreements with Shawmut Bank. The reimbursement
obligations of the Canadian subsidiaries are guaranteed by the Agent. The amount
of the reimbursement obligations so guaranteed reduce Alpine's availability
under the New Credit Agreement by the same amount. Under certain circumstances,
the Canadian facility may be "put" by the Canadian facility lender to the
lenders under the New Credit Agreement.
COVENANTS. The New Credit Agreement contains covenants customary for
financings of this type including, without limitation: a limitation on annual
capital expenditures of $8.5 million, limitations on dividend declarations and
payments, limitations on additional debt, liens, investments, guaranties, and
transactions with affiliates, and limitations on mergers, asset or stock
acquisitions, sale/leaseback transactions, and dispositions of collateral other
than in the ordinary course of business.
The New Credit Agreement also includes covenants requiring Alpine to meet
and maintain certain financial tests. These include requirements that Alpine
maintain, on a consolidated basis: a cash interest coverage ratio, based on
earnings before interest, taxes, depreciation and amortization ("EBITDA")
measured quarterly through October 1, 1995, and on a monthly cumulative
year-to-date basis during the remainder of fiscal 1996, of 1.1:1 during fiscal
1996; a cash interest coverage ratio, based on EBITDA and measured monthly on a
rolling 12-month basis, of 1.1:1 during fiscal 1997 and 1.35:1 during fiscal
1998; a cumulative year-to-date fixed charge coverage ratio, tested quarterly,
of .75:1 during fiscal 1996, and 1.0:1 during fiscal 1997 and 1998; and a
minimum tangible net worth and a minimum net worth. The New Credit Agreement
also includes the financial covenants that are included in the Indenture.
The New Credit Agreement also contains customary events of default,
including, without limitation, those relating to a failure to pay amounts due,
breach of a representation or warranty, failure to perform covenants, bankruptcy
or insolvency, litigation and unsatisfied judgments, certain defaults under
other debt agreements, and violations of the Employee Retirement Income Security
Act of 1974 and environmental laws. It is also an event of default under the New
Credit Agreement if Alpine ceases to own the stock of Superior, Adience or DNE,
or if there is a default under the Notes, any subsidiary loans or any loan by
Superior or Adience to their respective Canadian subsidiaries.
CONDITIONS. The New Credit Agreement contains a number of conditions to any
funding thereunder.
The Notes and Subsidiary Guarantees are effectively subordinated to the
loans and subsidiary guarantees under the New Credit Agreement and to other
secured debt of Alpine and the Subsidiary Guarantors to the extent of the assets
securing the New Credit Agreement and such other debt.
ADIENCE SENIOR NOTES
Adience Senior Notes in the principal amount of $5.0 million remain
outstanding. The Adience Senior Notes mature on June 15, 2002. Such notes bear
interest at the rate of 11% per annum, payable in cash on June 15 and December
15 of each year. The Adience Senior Notes are secured by liens on substantially
all the assets of Adience. The Adience Senior Notes rank senior in right of
payment to all indebtedness of Adience, except for up to $20.0 million of
indebtedness that may qualify as senior debt and subject to certain other
exceptions. Adience may redeem the Adience Senior Notes on or after December 15,
1997, beginning at a redemption price of 105.5% of the principal amount thereof,
plus accrued and unpaid interest to the date of redemption, such redemption
price being gradually reduced to 100% by December 15, 2000.
35
<PAGE>
DESCRIPTION OF THE NOTES
The Old Notes were issued, and the New Notes will be issued, under an
indenture to be dated as of July 15, 1995 (the "Indenture") between Alpine, the
Subsidiary Guarantors referred to below and Marine Midland Bank, trustee (the
"Trustee"), a copy of the form of which has been filed as an exhibit to the
Registration Statement. Upon the effectiveness of the Registration Statement,
the Indenture will be subject to and governed by the Trust Indenture Act of
1939, as amended. The following summary of the material provisions of the
Indenture does not purport to be complete and is subject to, and qualified in
its entirety by, reference to the provisions of the Indenture, including the
definitions of certain terms contained therein and those terms made part of the
Indenture by reference to the Trust Indenture Act. For definitions of certain
capitalized terms used in the following summary, see "Certain Definitions"
below.
GENERAL
The Notes will mature on July 15, 2003, will be limited to $153,000,000
aggregate principal amount and will be senior unsecured obligations of Alpine.
The Old Notes were issued at a discount from the aggregate stated principal
amount thereof. For federal income tax purposes, OID, taxable as ordinary
income, will be recognized by the holders of the Notes annually in advance of
the receipt of cash in respect thereof. See "Certain U.S. Federal Income Tax
Consequences." Each Note will bear interest at the rate set forth on the cover
page hereof from July 21, 1995 or from the most recent interest payment date to
which interest has been paid or duly provided for, payable on January 15, 1996
and semiannually thereafter on July 15 and January 15 in each year until the
principal thereof is paid or duly provided for, to the person in whose name the
Note (or any predecessor Note) is registered at the close of business on the
July 1 or January 1 next preceding such Interest Payment Date. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
(Sections 204, 301 and 311)
Principal of, premium, if any, and interest on the Notes will be payable,
and the Notes will be exchangeable and transferable, at the office or agency of
Alpine in The City of New York maintained for such purposes (which initially
will be the office of the Trustee); provided, however, that, at the option of
Alpine, interest may be paid by check mailed to the address of the person
entitled thereto as such address shall appear on the security register.
(Sections 301, 305 and 1002) The Notes will be issued only in registered form
without coupons and only in denominations of $1,000 and any integral multiple
thereof. (Section 302) No service charge will be made for any registration of
transfer or exchange or redemption of Notes, but Alpine may require payment in
certain circumstances of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith. (Section 305)
As of the date of the Indenture, all of Alpine's Subsidiaries (other than
PolyVision France S.A.) will be Restricted Subsidiaries. However, under certain
circumstances, Alpine will be able to designate current or future Subsidiaries
as Unrestricted Subsidiaries (other than Superior, Adience and their
subsidiaries). Unrestricted Subsidiaries will not be subject to many of the
restrictive covenants set forth in the Indenture.
The Notes will not be entitled to the benefit of any sinking fund.
SECURITY
Alpine and the Trustee have entered into a Pledge Agreement (the "Pledge
Agreement") pursuant to which the Notes are secured by a pledge of all of the
capital stock of Superior and Adience (the "Pledged Stock"), together with
profits and proceeds therefrom and property received with respect to the Pledged
Stock in addition thereto, in exchange therefor or in substitution therefor
(collectively, the "Collateral"). (Section 1401) At such time as Alpine
completes the refinancing of the DNE Credit Facility (which Alpine expects to
complete in the near future upon receipt of a third-party consent), the Notes
will also be secured by the stock of each member of the DNE Group that is
directly owned by Alpine. It is expected that only DNE Systems will be directly
owned by Alpine. So long as no Event of Default has occurred and is continuing,
Alpine will be entitled to receive and retain cash dividends and other cash
distributions on any of the Pledged Stock and will be entitled to vote the
Pledged Stock. Upon the occurrence of an Event of Default, the Trustee can vote
the Pledged Stock, except that the Trustee will not have the right to vote the
Pledged Stock so as to cause Superior, Adience or other issuer of Pledged Stock
(collectively, a "Pledgor") to
36
<PAGE>
file a voluntary petition in bankruptcy or to elect directors specifically for
such purpose. In addition, upon an Event of Default, the Trustee can realize
upon and sell or otherwise dispose of all or any part of the Collateral and will
apply the proceeds of any sale or disposition, first to the payment of costs and
expenses of sale, second to amounts due the Trustee, third to the payment of all
amounts due and unpaid on the Notes and, finally, any surplus to Alpine. The
Notes are not secured by any lien on, or other security interest in, any other
properties or assets of Alpine or any properties or assets of any Subsidiary of
Alpine. The security interest in the Collateral will not alter the effective
subordination of the Notes to the creditors of these Subsidiaries, including to
the relevant subsidiary guarantees given under the New Credit Agreement. Alpine
will not transfer or otherwise dispose of any of the Pledged Stock or any
properties or assets (other than dispositions in the ordinary course of
business) of a Pledgor to a Subsidiary, unless such Subsidiary is a Restricted
Subsidiary and the Trustee receives a pledge of all of the capital stock of such
Restricted Subsidiary on the same terms as the Pledged Stock is pledged to the
Trustee. Superior and Adience presently conduct all of Alpine's U.S. telephone
wire and cable and U.S. refractories businesses, respectively, and each owns a
subsidiary that conducts operations in Canada. The DNE Group conducts Alpine's
data communications and other electronic products business. The security
interest in Pledged Stock will be released upon the sale or other disposition
thereof in a transaction constituting an Asset Sale if such sale or disposition
is not prohibited by the Indenture. (Section 1403)
SUBSIDIARY GUARANTEES
Payment of the principal of and premium, if any, and interest on the Notes
and all other obligations under the Indenture and the Notes, when and as the
same become due and payable, will be guaranteed, jointly and severally, on an
unsecured basis by the Subsidiary Guarantors. (Section 1301) The obligations of
each Subsidiary Guarantor under its Subsidiary Guarantee will be limited so as
not to constitute a fraudulent conveyance under applicable law. See "Risk
Factors--Fraudulent Conveyance Considerations." Initially, the Notes will be
unconditionally guaranteed by Superior and Adience and Superior's Canadian
Subsidiary will guarantee Superior's obligations under its Subsidiary Guarantee
(or, alternatively, such Subsidiary may directly guarantee the Notes). The
Indenture will require a Subsidiary Guarantee from each new Restricted
Subsidiary, provided that a Non-U.S. Restricted Subsidiary will not be required
to provide a Subsidiary Guarantee unless it provides a guarantee with respect to
any debt (other than the Notes) of Alpine or any U.S. Restricted Subsidiary.
Additionally, if a member of the DNE Group or any other Restricted Subsidiary
existing on the date of the initial issuance of the Notes guarantees any debt
(other than the Notes) of Alpine or any U.S. Restricted Subsidiary, such
Subsidiary will be required to issue a Subsidiary Guarantee, provided that any
such Subsidiary Guarantee of a Non-U.S. Restricted Subsidiary will be released
when such Subsidiary no longer guarantees any such debt (other than as a result
of payment thereof). (Section 1308)
Each Subsidiary Guarantee will rank PARI PASSU in right of payment with all
existing and future unsecured indebtedness of the related Subsidiary Guarantor
that is not, by its terms, expressly subordinated in right of payment to such
Subsidiary Guarantee, except that the Subsidiary Guarantee given by Adience will
be subordinated in right of payment to the $5.0 million of Adience Senior Notes
outstanding. (Section 1501)
The Indenture will provide that no Subsidiary Guarantor may consolidate with
or merge with or into (whether or not such Subsidiary Guarantor is the surviving
person) another person whether or not affiliated with such Subsidiary Guarantor
(other than another Subsidiary Guarantor) unless: (i) subject to the provisions
of the following paragraph, the person formed by or surviving any such
consolidation or merger (if other than such Subsidiary Guarantor) assumes all of
the obligations of such Subsidiary Guarantor under the Indenture and its
Subsidiary Guarantee, pursuant to a supplemental indenture, in form and
substance satisfactory to the Trustee; (ii) immediately after giving effect to
such transaction, no Default or Event of Default exists; and (iii) immediately
after giving effect to such transaction as if the same had occurred at the
beginning of the most recently ended four full fiscal quarters for which
internal financial statements are available, Alpine would have been permitted to
incur at least $1.00 of additional Debt pursuant to the Fixed Charge Coverage
Ratio test set forth in the covenant entitled "Limitation on Debt." (Section
1307)
The Indenture provides that, in the event of a sale or other disposition of
all of the assets of any Subsidiary Guarantor, by way of merger, consolidation
or otherwise, or a sale or other disposition of all of
37
<PAGE>
the Capital Stock of any Subsidiary Guarantor, then such Subsidiary Guarantor or
the person acquiring such assets, as the case may be, will be released and
relieved of any obligations under the related Subsidiary Guarantee; provided
that the Net Proceeds of such sale or other disposition are applied in
accordance with the applicable provisions of the Indenture. See "Limitation on
Disposition of Proceeds of Asset Sales" below. In addition, any Subsidiary
Guarantor that is designated by the Board of Directors as an Unrestricted
Subsidiary in accordance with the terms of the Indenture may, at the option of
the Board of Directors at the time of such designation, be released and relieved
of any obligations under its Subsidiary Guarantee. (Section 1309)
RANKING
The Notes will be senior secured obligations of Alpine and will rank PARI
PASSU in right of payment with all other existing and future senior obligations
of Alpine. As of April 30, 1995, after giving effect to the sale of the Old
Notes, application of the estimated net proceeds therefrom and consummation of
the other transactions described in the Form 10-K under "Business--Recent
Developments; The Refinancing," Alpine and its subsidiaries would have had $69.6
million of debt outstanding other than the Notes, all but $0.9 million of which
would have been senior debt and $67.7 million of which would have been secured
debt. Except as noted above under "Subsidiary Guarantees," the Notes and
Subsidiary Guarantees will rank PARI PASSU in right of payment with the loans
and subsidiary guarantees under the New Credit Agreement and with other senior
debt of Alpine and the Subsidiary Guarantors. However, the Notes and Subsidiary
Guarantees will be effectively subordinated to the loans and subsidiary
guarantees under the New Credit Agreement and to other secured debt of Alpine
and the Subsidiary Guarantors to the extent of the assets securing the New
Credit Agreement and such other debt. The Notes will also be effectively
subordinated to all debt and other obligations of Alpine's subsidiaries that are
not Subsidiary Guarantors to the extent of the assets of such subsidiaries.
The Trustee and the Agent have entered into an intercreditor agreement that
provides among other things, that as between the Agent and the Trustee, the
Agent will be absolutely entitled to receive and apply to outstanding
obligations under the New Credit Agreement proceeds of collateral pledged by
Alpine's Subsidiaries securing the intercompany debt and subsidiary guarantees
under the New Credit Agreement. The intercreditor agreement also provides that
the Trustee and the Agent will effect a sharing of any distribution in an
insolvency proceeding of any Subsidiary Guarantor arising from unsecured claims,
so that each of the Trustee and the Agent will receive no more than their
respective percentage of such distribution based on the respective outstanding
amounts of loans under the New Credit Agreement or otherwise and the Notes
(after giving effect to any distribution in such insolvency proceeding to the
Agent in respect of the proceeds of the collateral of such Subsidiary on such
date.)
REDEMPTION
The Notes are redeemable at the option of Alpine, as a whole or from time to
time in part, at any time on or after July 15, 1999, on not less than 30 nor
more than 60 days' prior notice at the Redemption Prices (expressed as
percentages of principal amount at maturity) set forth below, together with
accrued interest, if any, to the Redemption Date, if redeemed during the
12-month period beginning on July 15 of the years indicated below (subject to
the right of holders of record on relevant record dates to receive interest due
on an Interest Payment Date):
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
----------------------------------------------------------------------- -------------
<S> <C>
1999................................................................... 103%
2000................................................................... 102
2001................................................................... 101
</TABLE>
and thereafter at 100% of the principal amount at maturity, together with
accrued interest, if any, to the Redemption Date.
In addition to the optional redemption of the Notes in accordance with the
provisions of the preceding paragraph, during the two years after the issue
date, Alpine may, with the net proceeds of one or more public offerings of its
Common Stock, redeem up to 33 1/3% of the original aggregate principal amount of
the Notes
38
<PAGE>
at 104 1/2% of the principal amount at maturity thereof for any such redemption,
together with accrued interest thereon (subject to the right of holders of
record on relevant record dates to receive interest due on an Interest Payment
Date); provided, however, that at least 66 2/3% of the original aggregate
principal amount of the Notes remains outstanding thereafter. (Sections 205,
1101, 1105 and 1107)
If less than all of the Notes are to be redeemed, the particular Notes to be
redeemed will be selected not more than 60 days prior to the Redemption Date by
the Trustee PRO RATA, by lot or by such method as the Trustee deems fair and
appropriate. (Section 1104)
CERTAIN COVENANTS
The Indenture contains, among others, the following covenants:
LIMITATION ON DEBT. Alpine will not, directly or indirectly, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable with
respect to (collectively, "incur") any Debt (including Acquired Debt) and will
not issue any Disqualified Stock, unless the Fixed Charge Coverage Ratio for
Alpine's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
additional Debt is incurred or such Disqualified Stock is issued, taken as one
period, would have been at least 2.0 to 1 through July 15, 1997 and 2.25 to 1
thereafter.
In making the foregoing calculation, PRO FORMA effect will be given to: (i)
the incurrence of such Debt and (if applicable) the application of the net
proceeds therefrom, including to refinance other Debt, as if such Debt was
incurred and the application of such proceeds occurred at the beginning of such
four-quarter period; (ii) the incurrence, repayment or retirement of any other
Debt by Alpine or its Restricted Subsidiaries since the first day of such
four-quarter period as if such Debt was incurred, repaid or retired at the
beginning of such four-quarter period (except that, in making such computation,
the amount of Debt under any revolving credit facility will be computed based
upon the average daily balance of such Debt during such four-quarter period);
and (iii) the acquisition (whether by purchase, merger or otherwise) or
disposition (whether by sale, merger or otherwise) of any company, entity or
business acquired or disposed of by Alpine or a Restricted Subsidiary, as the
case may be, since the first day of such four-quarter period (including, as
appropriate, the acquisition of Adience and the Alcatel Business), as if such
acquisition or disposition had occurred at the beginning of such four-quarter
period.
Notwithstanding the foregoing, Alpine may incur the following Debt
("Permitted Debt"):
(i) Debt under the New Credit Agreement or one or more other credit
facilities; provided that the aggregate amount of Debt outstanding at any
time pursuant to this clause (i), when added to the aggregate amount of Debt
of Restricted Subsidiaries outstanding at such time pursuant to clause (vii)
of the definition of Permitted Subsidiary Debt, may not exceed $85.0
million, less any amounts applied to the permanent reduction of such credit
facilities pursuant to the "Limitation on Disposition of Proceeds of Asset
Sales" covenant;
(ii) Debt represented by the Notes;
(iii) Debt in respect of (w) sale and leaseback transactions constituting
Attributable Debt, (x) Capital Lease Obligations, (y) purchase money
obligations and (z) industrial revenue bonds or similar securities, provided
that the net proceeds of such industrial revenue bonds or similar securities
are applied to construct new facilities and that the aggregate principal
amount thereof does not exceed 75% of the fair market value of the
facilities financed thereby; provided that the aggregate amount of the Debt
referred to in the foregoing clauses (w), (x), (y) and (z) outstanding at
any time, when added to the aggregate amount of similar Debt issued by
Restricted Subsidiaries pursuant to clause (iii) of the definition of
Permitted Subsidiary Debt outstanding at such time, may not exceed $25.0
million;
(iv) Hedging Obligations incurred for the purpose of fixing or hedging
interest rate risk with respect to any floating rate Debt that is permitted
by the terms of the Indenture to be outstanding or for the purpose of fixing
or hedging foreign currency risks;
(v) intercompany Debt between or among Alpine and any of its Restricted
Subsidiaries;
39
<PAGE>
(vi) subordinated Debt issued pursuant to paragraph (b)(vi) of the
"Limitation on Restricted Payments" covenant, provided that such Debt has a
Weighted Average Life to Maturity longer than the Weighted Average Life to
Maturity of the Notes and has a final Stated Maturity of principal later
than the final Stated Maturity of the Notes.
(vii) Debt (other than Debt described in clauses (i) through (vi) above),
provided that the aggregate amount of such Debt outstanding at any time,
when added to the aggregate amount of Debt issued by Restricted Subsidiaries
pursuant to clause (v) of the definition of Permitted Subsidiary Debt
outstanding at such time, may not exceed $5.0 million; and
(viii) any renewals, extensions, substitutions, refinancings or
replacements (each, for purposes of this clause, a "refinancing") by Alpine
of any of its Debt, including any successive refinancings by Alpine, so long
as (a) any such new Debt is in a principal amount that does not exceed the
principal amount (or, if such Debt being refinanced provides for an amount
less than the principal amount thereof to be due and payable upon a
declaration of acceleration thereof, such lesser amount as of the date of
determination) so refinanced, plus the amount of any premium required to be
paid in connection with such refinancing pursuant to the terms of the Debt
refinanced or the amount of any premium reasonably determined by Alpine as
necessary to accomplish such refinancing, plus the amount of expenses of
Alpine incurred in connection with such refinancing, (b) any such new Debt
has a final maturity date later than the final maturity date of, and has a
Weighted Average Life to Maturity longer than the Weighted Average Life to
Maturity of, the Debt being refinanced and (c) in the case of any
refinancing of subordinated Debt, such new Debt is made subordinate to the
Notes at least to the same extent as the Debt being refinanced, has a
Weighted Average Life to Maturity longer than the Weighted Average Life to
Maturity of the Notes and has a final Stated Maturity of principal later
than the final Stated Maturity of the Notes. (Section 1009)
LIMITATION ON DEBT OF RESTRICTED SUBSIDIARIES. Alpine will not permit any
Restricted Subsidiary to incur, directly or indirectly, any Debt (including
Acquired Debt), except that a Restricted Subsidiary may incur any of the
following Debt ("Permitted Subsidiary Debt"):
(i) a Subsidiary Guarantee;
(ii) guarantees by any Restricted Subsidiary of senior Debt of Alpine,
including guarantees by any Restricted Subsidiary of Debt under the New
Credit Agreement, provided that (a) such Debt is incurred in accordance with
the "Limitation on Debt" covenant and (b) such guarantees rank PARI PASSU
with the Subsidiary Guarantee issued by such Restricted Subsidiary with
respect to the Notes;
(iii) Debt in respect of (w) sale and leaseback transactions constituting
Attributable Debt, (x) Capital Lease Obligations, (y) purchase money
obligations and (z) industrial revenue bonds or similar securities, provided
that the net proceeds of such industrial revenue bonds or similar securities
are applied to construct new facilities and that the aggregate principal
amount thereof does not exceed 75% of the fair market value of the
facilities financed thereby; provided that the aggregate amount of the Debt
referred to in the foregoing clauses (w), (x), (y) and (z) outstanding any
time, when added to the aggregate amount of similar Debt issued by Alpine
pursuant to clause (iii) of the definition of "Permitted Debt" outstanding
at such time, may not exceed $25.0 million;
(iv) Acquired Debt of a Person, other than Debt incurred in connection
with, or in contemplation of, such Person becoming a Restricted Subsidiary
or the acquisition of assets from such Person, as the case may be, provided
that Alpine on a PRO FORMA basis could incur at least $1.00 of additional
Debt pursuant to the Fixed Charge Coverage Ratio test set forth in the
"Limitation on Debt" covenant;
(v) Debt (other than Debt described in clauses (i) through (iv) above or
clauses (vii) through (ix) below), provided that the aggregate amount of
such Debt outstanding at any time, when added to the aggregate amount of
Debt issued by Alpine pursuant to clause (vii) of the definition of
Permitted Debt outstanding at such time, may not exceed $5.0 million;
40
<PAGE>
(vi) any renewals, extensions, substitutions, refinancings or
replacements (each, for purposes of this clause, a "refinancing") by any
Restricted Subsidiary of any of its Debt, including any successive
refinancings by such Restricted Subsidiary, so long as (a) any such new Debt
is in a principal amount that does not exceed the principal amount (or, if
such Debt being refinanced provides for an amount less than the principal
amount thereof to be due and payable upon a declaration of acceleration
thereof, such lesser amount as of the date of determination) so refinanced,
plus the amount of any premium required to be paid in connection with such
refinancing pursuant to the terms of the Debt refinanced or the amount of
any premium reasonably determined by such Restricted Subsidiary as necessary
to accomplish such refinancing, plus the amount of expenses of such
Restricted Subsidiary incurred in connection with such refinancing, (b) any
such new Debt has a final maturity date later than the final maturity date
of, and has a Weighted Average Life to Maturity longer than the Weighted
Average Life of Maturity of, the Debt being refinanced and (c) in the case
of any refinancing of subordinated Debt, such new Debt is made subordinate
to the Subsidiary Guarantee (if any) of such Restricted Subsidiary at least
to the same extent as the Debt being refinanced, has a Weighted Average Life
to Maturity longer than the Weighted Average Life to Maturity of the Notes
and has a final Stated Maturity of principal later than the final Stated
Maturity of the Notes;
(vii) Debt under the New Credit Agreement or one or more other credit
facilities; provided that the aggregate amount of Debt outstanding at any
time pursuant to this clause (vii), when added to the aggregate amount of
Debt of Alpine outstanding at such time pursuant to clause (i) of the
definition of Permitted Debt, may not exceed $85.0 million, less any amounts
applied to the permanent reduction of such credit facilities pursuant to the
"Limitation on Disposition of Proceeds of Asset Sales" covenant;
(viii) intercompany Debt between or among Alpine and any of its Restricted
Subsidiaries; and
(ix) Hedging Obligations incurred for the purpose of fixing or hedging
interest rate risk with respect to any floating rate Debt that is permitted
by the terms of the Indenture to be outstanding or for the purpose of fixing
or hedging foreign currency risks. (Section 1010)
LIMITATION ON RESTRICTED PAYMENTS. (a) Alpine will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any distribution on account of
the Capital Stock of Alpine or any of its Restricted Subsidiaries (other
than dividends or distributions payable in Qualified Equity Interests or
dividends or distributions payable to Alpine or any of its Restricted
Subsidiaries);
(ii) purchase, redeem or otherwise acquire or retire for value any
Equity Interests of Alpine or any Affiliate of Alpine (other than any such
Equity Interests owned by Alpine or any of its Restricted Subsidiaries);
(iii) make any principal payment on, or purchase, redeem, defease or
otherwise acquire or retire for value, prior to any scheduled principal
payment or scheduled maturity, any Debt of Alpine or a Subsidiary Guarantor
that is subordinated to the Notes or any Subsidiary Guarantee, as the case
may be; or
(iv) make any Restricted Investment,
(all such payments and other actions described in (but not excluded from)
clauses (i) through (iv) above being collectively referred to as "Restricted
Payments"), unless, at the time of such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or
would occur as a consequence thereof;
(2) Alpine would, at the time of such Restricted Payment and after
giving PRO FORMA effect thereto as if such Restricted Payment had been made
at the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional Debt pursuant to the Fixed Charge
Coverage Ratio test set forth in the covenant entitled "Limitation on Debt;"
and
41
<PAGE>
(3) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by Alpine and its Restricted Subsidiaries after the
date of the initial issuance of the Notes, is less than the sum of
(A) 50% of the Consolidated Net Income of Alpine for the period
(taken as one accounting period) from May 1, 1995 to the end of Alpine's
most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment (or, if
such Consolidated Net Income for such period is a deficit, 100% of such
deficit), plus
(B) the aggregate net cash proceeds received after the date of the
initial issuance of the Notes by Alpine from the issuance or sale (other
than to any Restricted Subsidiary) of Qualified Equity Interests of
Alpine, plus
(C) the aggregate net cash proceeds received after the date of the
initial issuance of the Notes by Alpine from the issuance or sale (other
than to any Restricted Subsidiary) of debt securities or Disqualified
Stock that have been converted into or exchanged for Qualified Capital
Stock of Alpine, together with the aggregate net cash proceeds received
by Alpine at the time of such conversion or exchange, plus
(D) to the extent that any Restricted Investment that was made after
the date of the initial issuance of the Notes is sold for cash or
otherwise liquidated or repaid for cash, the lesser of (A) the cash
proceeds with respect to such Restricted Investment (less the cost of
disposition, if any) and (B) the initial amount of such Restricted
Investment.
(b) Notwithstanding paragraph (a) above, Alpine and any Restricted
Subsidiary may take the following actions so long as (with respect to clauses
(v), (vi) and (vii) below) no Default or Event of Default shall have occurred
and be continuing:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at the date of declaration such payment would have
complied with the provisions of the Indenture;
(ii) the redemption, repurchase, retirement or other acquisition of any
Equity Interests of Alpine in exchange for, or out of the proceeds of, the
substantially concurrent sale (other than to a Subsidiary) of Qualified
Equity Interests of Alpine;
(iii) the purchase, redemption, defeasance or other acquisition or
retirement for value of Debt of Alpine or a Subsidiary Guarantor that is
subordinated to the Notes or the applicable Subsidiary Guarantee, as the
case may be, in exchange for, or out of the net cash proceeds of a
substantially concurrent incurrence or sale (other than to a Subsidiary) of,
Debt of Alpine or a Subsidiary Guarantor that is subordinated to the Notes
or the applicable Subsidiary Guarantee, as the case may be, so long as (A)
the principal amount of such new Debt does not exceed the principal amount
(or, if such subordinated Debt being refinanced provides for an amount less
than the principal amount thereof to be due and payable upon a declaration
of acceleration thereof, such lesser amount as of the date of determination)
of the subordinated Debt being so purchased, redeemed, acquired or retired,
(B) such new subordinated Debt is subordinated to the Notes or the
applicable Subsidiary Guarantee, as the case may be, to the same extent as
such subordinated Debt so purchased, redeemed, acquired or retired and (C)
such new subordinated Debt has a Weighted Average Life to Maturity longer
than the Weighted Average Life to Maturity of the Notes and a final Stated
Maturity of principal later than the final Stated Maturity of the Notes;
(iv) the defeasance, redemption, repurchase or other retirement of Debt
of Alpine or a Subsidiary Guarantor that is subordinated to the Notes or the
applicable Subsidiary Guarantee, as the case may be, in exchange for, or out
of the proceeds of, the substantially concurrent sale (other than to a
Subsidiary) of Qualified Equity Interests of Alpine;
(v) scheduled dividend payments on outstanding Preferred Stock of
Alpine, whether outstanding on the date of the initial issuance of the Notes
or thereafter issued; provided that the aggregate amount
42
<PAGE>
of such dividends paid after the date of the initial issuance of the Notes
in reliance on this clause (v) may not exceed $1.7 million per year, less
the amount of interest paid or accrued during such period on any Debt of
Alpine issued in exchange for shares of Alpine's Preferred Stock;
(vi) the redemption, repurchase, retirement or other acquisition of any
Preferred Stock of Alpine in exchange for, or out of the proceeds of the
substantially concurrent sale (other than to a Subsidiary) of Debt of Alpine
that is subordinated to the Notes; provided that, after giving effect to any
such transaction, the sum of the scheduled dividend payments on Preferred
Stock of Alpine that remains outstanding plus the amount of interest due on
outstanding subordinated Debt issued pursuant to this clause (vi), may not
exceed $1.7 million per year; and
(vii) other Restricted Payments in an aggregate amount not to exceed $4.0
million.
The actions described in clauses (ii), (iv), (v), (vi) and (vii) above will
reduce the amount that would otherwise be available for Restricted Payments
under clause (3) of paragraph (a) above. The actions described in clauses (i)
and (iii) above will not reduce the amount otherwise available for Restricted
Payments under clause (3) of paragraph (a) above.
Not later than the date of making any Restricted Payment, Alpine will
deliver to the Trustee an Officers' Certificate stating that such Restricted
Payment is permitted and setting forth the basis upon which the calculations
required by this covenant were computed, which calculations may be based upon
Alpine's latest available quarterly financial statements. (Section 1011)
LIMITATION ON DISPOSITION OF PROCEEDS OF ASSET SALES. Alpine will not, and
will not permit any Restricted Subsidiary to, engage in any Asset Sale unless
(i) the consideration received by Alpine or such Restricted Subsidiary for such
Asset Sale is not less than the fair market value of the assets sold (as
determined by the Board of Directors of Alpine, whose good faith determination
will be conclusive and evidenced by a Board Resolution) and (ii) the
consideration received by Alpine or such Restricted Subsidiary in respect of
such Asset Sale consists of at least 85% cash or cash equivalents, provided that
the amount of (A) any Debt of Alpine or any Restricted Subsidiary (as shown on
its most recent balance sheet or in the notes thereto), other than liabilities
that are by their terms subordinated to the Notes or a Subsidiary Guarantee,
that is assumed by the transferee of any such assets and (B) any notes or other
obligations received by Alpine or such Restricted Subsidiary from such
transferee that are immediately converted by Alpine or such Restricted
Subsidiary into cash (to the extent of the cash received) will be deemed to be
cash for purposes of this provision.
If Alpine or any Restricted Subsidiary engages in an Asset Sale, Alpine may
use the Net Cash Proceeds thereof, within 270 days after such Asset Sale, to (i)
permanently repay any Debt then outstanding under the New Credit Agreement or
any other then outstanding Debt of Alpine or of any Subsidiary Guarantor that is
PARI PASSU with (or senior to) the Notes or the applicable Subsidiary Guarantee,
as the case may be, or in the case where such Restricted Subsidiary has not
provided a Subsidiary Guarantee, any Debt of such Restricted Subsidiary or (ii)
invest (or enter into a legally binding agreement to invest) in properties and
assets to replace the properties and assets that were the subject of the Asset
Sale or in properties and assets that will be used in businesses of Alpine or
its Restricted Subsidiaries, as the case may be, existing on the date of the
original issuance of the Notes. If any such legally binding agreement to invest
such Net Cash Proceeds is terminated, then Alpine may, within 90 days of such
termination or within 270 days of such Asset Sale, whichever is later, apply
such Net Cash Proceeds as provided in clause (i) or (ii) (without regard to the
parenthetical contained in such clause (ii)) above. Pending the final
application of any such Net Cash Proceeds, Alpine may temporarily reduce
borrowings under any revolving credit facility or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Indenture. The amount of
such Net Cash Proceeds not so used as set forth above in this paragraph
constitutes "Excess Proceeds."
When the aggregate amount of Excess Proceeds exceeds $7.5 million, Alpine
will, within 15 business days, make an offer to purchase (an "Excess Proceeds
Offer") from all holders of Notes, in accordance with the procedures set forth
below, the maximum principal amount of Notes that may be purchased with the
Excess Proceeds. The offer price as to each Note will be payable in cash in an
amount equal to 100% of the
43
<PAGE>
Accreted Value of such Note as of the date such Excess Proceeds Offer is
consummated, plus accrued and unpaid interest to such date. To the extent that
the Accreted Value of Notes tendered pursuant to an Excess Proceeds Offer is
less than the Excess Proceeds, Alpine may use such remaining Excess Proceeds for
general corporate purposes. If the aggregate Accreted Value of Notes validly
tendered and not withdrawn by holders thereof exceeds the Excess Proceeds, Notes
to be purchased will be selected on a PRO RATA basis. Upon completion of such
offer to purchase, the amount of Excess Proceeds will be reset to zero.
The Indenture also will provide that, to the extent that Alpine or any of
its Restricted Subsidiaries receives securities or other non-cash property or
assets as proceeds of an Asset Sale in compliance with the foregoing provisions,
Alpine will not be required to make any application of such non-cash proceeds
required by this covenant until it receives cash or cash equivalent proceeds
from a sale, repayment, exchange, redemption or retirement of or extraordinary
dividend or return of capital on such non-cash property. (Section 1012)
PURCHASE OF NOTES UPON A CHANGE OF CONTROL. If a Change of Control occurs
at any time, then each holder of Notes will have the right to require that
Alpine purchase such holder's Notes, in whole or in part in integral multiples
of $1,000, at a purchase price (the "Change of Control Purchase Price") in cash
in an amount equal to 101% of the Accreted Value thereof as of the Change of
Control Purchase Date referred to below, plus accrued and unpaid interest to
such date, pursuant to the offer described below (the "Change of Control Offer")
and the other procedures set forth in the Indenture.
Within 30 days following any Change of Control, Alpine will notify the
Trustee thereof and give written notice of such Change of Control to each holder
of Notes by first-class mail, postage prepaid, at its address appearing in the
security register, stating, among other things, (i) the purchase price and the
purchase date, which will be a Business Day no earlier than 30 days nor later
than 60 days from the date such notice is mailed, or such later date as is
necessary to comply with requirements under the Exchange Act (the "Change of
Control Purchase Date"); (ii) that any Note not tendered will continue to accrue
interest and accrete OID; (iii) that, unless Alpine defaults in the payment of
the purchase price, any Notes accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest and accrete OID after the Change of
Control Purchase Date; and (iv) certain other procedures that a holder of Notes
must follow to accept a Change of Control Offer or to withdraw such acceptance.
Alpine will comply with the applicable tender offer rules, including Rule
14e-l under the Exchange Act, and any other applicable securities laws and
regulations in connection with a Change of Control Offer.
Alpine will not, and will not permit any Restricted Subsidiary to, create or
permit to exist or become effective any restriction (other than restrictions
existing under Debt as in effect on the date of the original issuance of the
Notes or any renewals, extensions, substitutions, refinancings or replacements
of such Debt, provided that the restrictions contained in the agreements
governing such Debt are no more restrictive than those contained in the
agreements governing the Debt being refinanced) that would materially impair the
ability of Alpine to make a Change of Control Offer to purchase the Notes or, if
such Change of Control Offer is made, to pay for the Notes tendered for
purchase. (Section 1013)
If a Change of Control Offer is made, there can be no assurance that Alpine
will have available funds sufficient to pay the Change of Control Purchase Price
for all of the Notes that might be delivered by holders of the Notes seeking to
accept the Change of Control Offer. The failure of Alpine to make or consummate
the Change of Control Offer or pay the Change of Control Purchase Price when due
would result in an Event of Default and would give the Trustee and the holders
of the Notes the rights described under "Events of Default."
One of the events which constitutes a Change of Control under the Indenture
is the disposition of "all or substantially all" of Alpine's assets. This term
has not been interpreted under New York law (which is the governing law of the
Indenture) to represent a specific quantitative test. As a consequence, in the
event holders of the Notes elect to require Alpine to purchase the Notes and
Alpine elects to contest such election, there can be no assurance as to how a
court interpreting New York law would interpret the phrase.
44
<PAGE>
Except as described above with respect to a Change of Control, the Indenture
does not contain provisions that permit the holders of the Notes to require that
Alpine repurchase or redeem the Notes in the event of a takeover,
recapitalization or similar restructuring. The existence of a holder's right to
require Alpine to purchase such holder's Notes upon a Change of Control may
deter a third party from acquiring Alpine in a transaction that constitutes a
Change of Control.
LIMITATION ON UNRESTRICTED SUBSIDIARIES. Alpine will not make, and will not
permit any of its Restricted Subsidiaries to make, any Investment in
Unrestricted Subsidiaries if, at the time thereof, the amount of such Investment
would exceed the amount of Restricted Payments then permitted to be made
pursuant to the "Limitation on Restricted Payments" covenant.
The Board of Directors may designate any Restricted Subsidiary (other than
Superior, Adience and their subsidiaries) as an Unrestricted Subsidiary or any
Person about to become a Subsidiary as an Unrestricted Subsidiary if, in either
case, such designation complies with the next paragraph, and at the time of
designation (and, if applicable, after giving effect to such acquisition), such
Subsidiary: (a) has no Debt other than Non-Recourse Debt; (b) is not party to
any agreement, contract, arrangement or understanding with Alpine or any
Restricted Subsidiary of Alpine unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to Alpine or such
Restricted Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of Alpine; and (c) is a Person with respect to which
neither Alpine nor any of its Restricted Subsidiaries has any obligation (x) to
subscribe for additional Equity Interests or (y) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default; provided
that in no event shall the business currently operated by Superior, Adience and
their subsidiaries be transferred to or held by an Unrestricted Subsidiary. For
purposes of making such determination, all outstanding Investments by Alpine and
its Restricted Subsidiaries in the Subsidiary so designated will be deemed to be
Restricted Payments at the time of such designation (valued as set forth below)
and will reduce the amount available for Restricted Payments under clause (3) of
paragraph (a) of the "Limitation on Restricted Payments" covenant. All such
outstanding Investments will be deemed to constitute Investments in an amount
equal to the greatest of (x) the net book value of such Investments at the time
of such designation, (y) the fair market value of such Investments at the time
of such designation and (z) the original fair market value of such Investments
at the time they were made less any capital returned in cash. Such designation
will only be permitted if such Restricted Payment would be permitted at such
time and if such Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary.
The Board of Directors of Alpine may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that such designation will be
deemed to be an incurrence of Debt by a Restricted Subsidiary of Alpine of any
outstanding Debt of such Unrestricted Subsidiary and such designation will only
be permitted if (i) such Debt is permitted under the covenant "Limitation on
Debt of Restricted Subsidiaries" and (ii) no Default or Event of Default would
be in existence following such designation. (Section 1014)
LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES. Alpine will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions to
Alpine or any other Restricted Subsidiary on its Capital Stock, (ii) pay any
Debt owed to Alpine or any other Restricted Subsidiary, (iii) make loans or
advances to Alpine or any other Restricted Subsidiary or (iv) transfer any of
its properties or assets to Alpine or any other Restricted Subsidiary, except
for such encumbrances or restrictions existing under or by reason of (a) any
agreement in effect on the date of the initial issuance of the Notes, (b)
applicable law, (c) customary non-assignment provisions in leases or other
contracts entered into in the ordinary course of business and consistent with
past practices, (d) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the nature described in
clauses (iv)(b) and (c) on the
45
<PAGE>
property so acquired, (e) customary restrictions imposed on the transfer of
copyrighted or patented materials, (f) the entering into of a contract for the
sale or other disposition of assets, directly or indirectly, so long as such
restrictions do not extend to assets that are not subject to such sale or other
disposition, (g) provisions in Debt of Restricted Subsidiaries that is permitted
by the Indenture to be incurred that only restrict the transfer of the assets
purchased with the proceeds of such Debt, (h) any agreement or other instrument
of a Person acquired by Alpine or any Restricted Subsidiary in existence at the
time of such acquisition (but not created in contemplation thereof), which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the
Person, so acquired, or (i) pursuant to an agreement effecting a renewal,
refunding, refinancing or extension of Debt incurred pursuant to an agreement
referred to in clause (a) or (h) above; provided that the restrictions contained
in the agreements governing such Debt are no more restrictive than those
contained in the agreements governing the Debt being refinanced. (Section 1015)
LIMITATION ON TRANSACTIONS WITH AFFILIATES. Alpine will not, and will not
permit any of its Restricted Subsidiaries to, sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into any contract, agreement, understanding, loan, advance
or guarantee with, or for the benefit of, any Affiliate (each of the foregoing
including any series or combination of the foregoing, an "Affiliate
Transaction"), unless (i) such Affiliate Transaction is on terms that are no
less favorable to Alpine or the relevant Restricted Subsidiary than those that
would have been obtained in a comparable transaction by Alpine or such
Restricted Subsidiary with an unrelated Person and (ii) Alpine delivers to the
Trustee (a) with respect to any Affiliate Transaction, an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (i) above, (b)
with respect to any Affiliate Transaction involving aggregate payments in excess
of $1.0 million, a majority of the disinterested members of the Board of
Directors of Alpine determines in its reasonable good faith judgment, which
shall be conclusive and evidenced by a Board Resolution, that such Affiliate
Transaction complies with clause (i) above and (c) with respect to any Affiliate
Transaction involving aggregate payments in excess of $5.0 million, an opinion
as to the fairness to Alpine or such Restricted Subsidiary from a financial
point of view issued by an investment banking firm of national standing;
provided that (x) any employment agreement or compensation plan or arrangement
entered into by Alpine or any of its Restricted Subsidiaries in the ordinary
course of business of Alpine or such Restricted Subsidiary, (y) transactions
between or among Alpine and/or its Restricted Subsidiaries (other than
partially-owned Restricted Subsidiaries any of the other equity holders of which
are Affiliates of Alpine) and (z) transactions permitted by the provisions of
the Indenture described above under the covenant "Limitation on Restricted
Payments" will not be deemed Affiliate Transactions. (Section 1016)
LIMITATION ON LIENS. Alpine will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien, other than a Permitted Lien, on any property or asset
now owned or hereafter acquired, or any income or profits therefrom, unless (x)
in the case of any Lien securing Debt that is subordinated to the Notes, the
Notes are secured by a Lien on such property, asset, income or profit that is
senior in priority to such Lien and (y) in the case of any other Lien, the Notes
are equally and ratably secured with the obligation or liability secured by such
Lien, in either case until such time as such Debt, obligation or liability is no
longer secured by a Lien.
Notwithstanding the foregoing, Alpine or its Restricted Subsidiaries may
incur the following Liens ("Permitted Liens"):
(i) Liens in favor of Alpine;
(ii) Liens on property or assets of Alpine or any Restricted Subsidiary
securing Debt (and related interest, fees and other charges) under the New
Credit Agreement or under one or more other credit facilities permitted to
be incurred by clause (i) of the definition of Permitted Debt or clause
(vii) of the definition of Permitted Subsidiary Debt, including Liens
securing intercompany Debt (and related interest, fees and other charges)
representing loans of the proceeds of borrowings under the New Credit
Agreement or such other credit facilities by the Company or a Restricted
Subsidiary to a Restricted Subsidiary; provided, however, that (A) such
Liens cover only the types of property and assets covered by the Liens
contemplated by the New Credit Agreement on the date of original issuance of
the Notes
46
<PAGE>
and (B) such Debt is in a principal amount not to exceed the principal
amount of the outstanding Debt permitted by clause (i) of the definition of
Permitted Debt or clause (vii) of the definition of Permitted Subsidiary
Debt;
(iii) Liens on property or assets that were existing at the time of
acquisition thereof by Alpine or any Restricted Subsidiary of Alpine;
provided that such Liens do not extend to any property or assets of Alpine
or any Restricted Subsidiary other than the property or assets acquired in
connection with the incurrence of such Acquired Debt;
(iv) Liens on property or assets of Alpine and its Restricted
Subsidiaries to secure Debt permitted by clause (iii) of the definition of
Permitted Debt or clause (iii) of the definition of Permitted Subsidiary
Debt, provided such Liens cover only the property or assets acquired with
the proceeds of such Debt;
(v) Liens existing on the date of the initial issuance of the Notes;
(vi) Liens incurred in the ordinary course of business of Alpine or any
Restricted Subsidiary of Alpine with respect to obligations that do not
exceed $5.0 million at any one time outstanding and that (a) are not
incurred in connection with the borrowing of money or the obtaining of
advances or credit (other than trade credit in the ordinary course of
business) and (b) do not in the aggregate materially detract from the value
of the property or materially impair the use thereof in the operation of
business by Alpine or such Restricted Subsidiary;
(vii) Liens securing Acquired Debt created prior to (and not in
connection with or in contemplation of) the incurrence of such Debt by
Alpine or any Restricted Subsidiary; provided that such Liens do not extend
to any property or assets of Alpine or any Restricted Subsidiary other than
the property or assets acquired in connection with the incurrence of such
Acquired Debt;
(viii) Liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(ix) Liens for taxes, assessments or governmental charges or claims that
are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded;
provided that any reserve or other appropriate provision as shall be
required in conformity with GAAP shall have been made therefor;
(x) Liens incurred or pledges and deposits in connection with workers'
compensation, unemployment insurance and other social security benefits
incurred by Alpine or any Restricted Subsidiary of Alpine;
(xi) Liens imposed by law, including, without limitation, mechanics',
carriers', warehousemen's, materialmen's, suppliers' and vendors' Liens,
incurred by Alpine or any Restricted Subsidiary in the ordinary course of
business;
(xii) zoning restrictions, easements, licenses, covenants, reservations,
restrictions on the use of real property or minor irregularities of title
incident thereto, which do not, in the aggregate, have a material adverse
effect on the operation of the business of Alpine and its Restricted
Subsidiaries taken as a whole;
(xiii) Liens securing Debt permitted to be incurred by clause (viii) of
the definition of Permitted Debt or clause (vi) of the definition of
Permitted Subsidiary Debt, so long as such Liens are limited to the
collateral securing the Debt being refinanced and the proceeds of such
collateral; and
(xiv) any extension, renewal or replacement, in whole or in part, of any
Lien described in the foregoing clauses (i) through (xiii); provided that
any such extension, renewal or replacement shall be no more restrictive in
any material respect than the Lien so extended, renewed or replaced and
shall not extend to any additional property or assets. (Section 1017)
LIMITATIONS ON SALE AND LEASEBACK TRANSACTIONS. Alpine will not, and will
not permit any of its Restricted Subsidiaries to, enter into any sale and
leaseback transaction; provided that Alpine or its
47
<PAGE>
Restricted Subsidiaries may enter into such sale and leaseback transaction if
(i) Alpine or such Restricted Subsidiary could have (a) incurred Debt in an
amount equal to the Attributable Debt relating to such sale and leaseback
transaction pursuant to the covenants described above under the captions
"Limitation on Debt" and "Limitation on Debt of Restricted Subsidiaries" and (b)
incurred a Lien to secure such Debt pursuant to the covenant "Limitation on
Liens," (ii) the proceeds of such sale and leaseback transaction are at least
equal to the fair market value (as determined in good faith by the Board of
Directors and set forth in an Officers' Certificate delivered to the Trustee) of
the property that is the subject of such sale and leaseback transaction and
(iii) Alpine will apply or cause to be applied the proceeds of such transaction
in compliance with the covenant entitled "Limitation on Disposition of Proceeds
of Asset Sales." (Section 1018)
REPORTS. Whether or not required by the rules and regulations of the
Commission, so long as any Notes are outstanding, Alpine will furnish to the
holders of Notes (i) all quarterly and annual financial information that would
be required to be contained in a filing with the Commission on Forms 10-Q and
10-K if Alpine were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" that
describes the financial condition and results of operations of Alpine and its
Restricted Subsidiaries and, with respect to the annual information only, a
report thereon by Alpine's certified independent accountants and (ii) all
reports that would be filed with the Commission on Form 8-K if Alpine were
required to file such reports. In addition, whether or not required by the rules
and regulations of the Commission, Alpine will file a copy of all such
information and reports with the Commission for public availability (unless the
Commission will not accept such a filing) and make such information available to
investors who request it in writing. (Section 1019)
MERGER, CONSOLIDATION OR SALE OF ASSETS.
Alpine may not consolidate or merge with or into (whether or not Alpine is
the surviving corporation), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets in one
or more related transactions, to any Person or Persons unless
(i) Alpine is the surviving corporation or the Person formed by or
surviving any such consolidation or merger (if other than Alpine) or to
which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia;
(ii) the entity or Person formed by or surviving any such consolidation
or merger (if other than Alpine) or the entity or Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made assumes all the obligations of Alpine under the Notes and the Indenture
pursuant to a supplemental indenture in a form reasonably satisfactory to
the Trustee;
(iii) immediately after such transaction no Default or Event of Default
exists;
(iv) Alpine or the Person formed by or surviving any such consolidation
or merger, or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made (a) will have Consolidated Net Worth
(immediately after the transaction) equal to or greater than the
Consolidated Net Worth of Alpine immediately preceding the transaction and
(b) would, after giving PRO FORMA effect thereto as if such transaction had
occurred at the beginning of the most recently ended four full fiscal
quarter period for which internal financial statements are available, have
been permitted to incur at least $1.00 of additional Debt pursuant to the
Fixed Charge Coverage Ratio test set forth in the covenant entitled
"Limitation on Debt"; and
(v) Alpine delivers, or causes to be delivered, to the Trustee, in form
and substance reasonably satisfactory to the Trustee, an officers'
certificate and an opinion of counsel, each stating that such consolidation,
merger, sale, conveyance, assignment, transfer, lease or other disposition
comply with the requirements of the Indenture. (Section 801)
EVENTS OF DEFAULT AND REMEDIES
The following are Events of Default under the Indenture:
(i) default for 30 days in the payment when due of interest on the
Notes;
48
<PAGE>
(ii) default in payment when due of the principal of or premium, if any,
on the Notes;
(iii) failure to make a Change of Control Offer or an Excess Proceeds
Offer, in each case, within the time periods specified in the Indenture or
default in the performance, or breach, of any covenant described under
"Merger, Consolidation or Sale of Assets;"
(iv) failure by Alpine, a Subsidiary Guarantor or a Pledgor for 60 days
after notice from the Trustee or from holders of at least 25% of the
aggregate principal amount of the Notes outstanding to comply with any of
its other agreements in the Indenture, the Notes or the Pledge Agreement;
(v) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any Debt
for money borrowed by Alpine or any Significant Subsidiary (or the payment
of which is guaranteed by Alpine or any Significant Subsidiary), whether
such Debt or guarantee now exists or is created after the date of original
issuance of the Notes, which default (x) is caused by a failure to pay
principal of, premium, if any, or interest on such Debt prior to the
expiration of the grace period provided in such Debt on the date of such
default (a "Payment Default") or (y) results in the acceleration of such
Debt prior to its express maturity and, in each case, the principal amount
of any such Debt, together with the principal amount of any other such Debt
under which there has been a Payment Default or the maturity of which has
been so accelerated, aggregates $5.0 million or more;
(vi) failure by Alpine or any Significant Subsidiary to pay final
judgments aggregating in excess of $5.0 million, which judgments are not
paid, discharged or stayed for a period of 60 days;
(vii) except as permitted by the Indenture, any Subsidiary Guarantee
shall be held in any judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect or any Subsidiary
Guarantor, or any Person acting on behalf of any Subsidiary Guarantor, shall
deny or disaffirm its obligations under its Subsidiary Guarantee; and
(viii) certain events of bankruptcy or insolvency with respect to Alpine
or any of its Significant Subsidiaries or any group of Subsidiaries that,
taken together, would constitute a Significant Subsidiary. (Section 501)
If any Event of Default occurs and is continuing, the Trustee or the holders
of at least 25% in principal amount of the then outstanding Notes may declare
the Accreted Value as of the date on which the Notes first become due and
payable plus accrued and unpaid interest on all the Notes to such date to be
immediately due and payable. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency with
respect to Alpine or any Significant Subsidiary, all outstanding Notes will
become due and payable without further action or notice; provided, however,
that, in the event of the bankruptcy or insolvency of Adience, the Notes will
not be subject to such automatic acceleration (but the Trustee or the holders of
at least 25% in principal amount of the then outstanding Notes may declare the
Notes immediately due and payable), unless the holder or holders of in excess of
$5.0 million principal amount of Debt have accelerated their obligations, in
which event the outstanding Notes will become due and payable without further
action or notice. Holders of the Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
holders of a majority in principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from holders of the Notes notice of any continuing Default or Event of
Default (except a continuing Default or Event of Default in the payment of the
principal of (or premium on) or interest on the Notes) if it determines that
withholding notice is in their interest. (Section 502)
At any time after the declaration of acceleration has been made and before a
judgment or decree for payment of the money due has been obtained by the Trustee
as provided in the Indenture, the holders of a majority in principal amount of
the outstanding Notes may rescind and annul such declaration and its
consequences if (a) Alpine or any Subsidiary Guarantor has paid or deposited, or
caused to be paid or deposited, with the Trustee a sum sufficient to pay (1) all
overdue interest on all outstanding Notes, (2) all other amounts under the
outstanding Notes that have become due otherwise than by such declaration of
acceleration, and interest on any unpaid principal at the rate borne by the
Notes, (3) to the extent that
49
<PAGE>
payment of such interest is lawful, interest upon overdue interest at the rate
borne by the Notes, and (4) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due the Trustee under the
Indenture; and (b) all Events of Default, other than the non-payment of
principal of (or premium, if any, on) Notes that have become due solely by such
declaration of acceleration, have been cured or waived as provided in the
Indenture. (Section 502)
The holders of a majority in principal amount of the Notes then outstanding
may on behalf of the holders of all of the Notes waive any past default under
the Indenture or the Pledge Agreement, except a default in the payment of the
principal of (or premium on) or interest on the Notes or in respect of a
covenant or provision that cannot be modified or amended without the consent of
the holder of each outstanding Note affected. (Section 513)
Alpine is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and Alpine is required, within 10 business days
of the occurrence of any Default or Event of Default, to deliver to the Trustee
a statement specifying such Default or Event of Default. (Section 1008)
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Alpine may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding Notes ("Legal
Defeasance") except for (i) the rights of holders of outstanding Notes to
receive payments in respect of the principal of and premium, if any, and
interest on such Notes when such payments are due, (ii) Alpine's obligations
with respect to the Notes concerning issuing temporary Notes, mutilated,
destroyed, lost or stolen Notes, registration of Notes and the maintenance of an
office or agency for payment and money for security payments held in trust,
(iii) the rights, powers, trusts, duties and immunities of the Trustee, and
Alpine's obligations in connection therewith and (iv) the Legal Defeasance
provisions of the Indenture. In addition, Alpine may, at its option and at any
time, elect to have the obligations of Alpine released with respect to certain
covenants that are described in the Indenture ("Covenant Defeasance") and
thereafter any omission to comply with such obligations will not constitute a
Default or Event of Default with respect to the Notes. In the event Covenant
Defeasance occurs, certain events (not including non-payment, bankruptcy,
receivership, rehabilitation and insolvency events) described under "Events of
Default and Remedies" will no longer constitute an Event of Default with respect
to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance, (i)
Alpine must irrevocably deposit with the Trustee, in trust, for the benefit of
the holders of the Notes, cash in United States dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent public accountants,
to pay the principal of and premium, if any, and interest on the outstanding
Notes on the stated maturity or on the applicable redemption date, as the case
may be, of such principal or installment of principal of, premium, if any, or
interest on the outstanding Notes; (ii) in the case of Legal Defeasance, Alpine
will have delivered to the Trustee an opinion of counsel reasonably acceptable
to the Trustee confirming that (a) Alpine has received from, or there has been
published by, the Internal Revenue Service a ruling or (b) since the date of the
Indenture, there has been a change in the applicable federal income tax law, in
either case to the effect that and based thereon, such opinion of counsel will
confirm that the holders of the outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred; (iii) in the case of Covenant Defeasance, Alpine
will have delivered to the Trustee an opinion of counsel reasonably acceptable
to the Trustee confirming that the holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred; (iv) no Default or Event of Default
will have occurred and be continuing on the date of such deposit or insofar as
Events of Default from bankruptcy or insolvency events are concerned, at any
time in the period ending on the 123rd day after the date of deposit; (v) such
Legal Defeasance or Covenant Defeasance will not result in a breach or violation
of, or constitute a default under any material
50
<PAGE>
agreement or instrument (other than the Indenture) to which Alpine or any of its
Subsidiaries is a party or by which Alpine or any of its Subsidiaries is bound;
(vi) Alpine will have delivered to the Trustee an opinion of counsel to the
effect that after the 123rd day following the deposit, the trust funds will not
be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally; (vii)
Alpine will have delivered to the Trustee an officers' certificate stating that
the deposit was not made by Alpine with the intent of preferring the holders of
Notes over the other creditors of Alpine with the intent of defeating,
hindering, delaying or defrauding creditors of Alpine or others; and (viii)
Alpine will have delivered to the Trustee an officers' certificate and an
opinion of counsel, each stating that all conditions precedent provided for
relating to the Legal Defeasance or the Covenant Defeasance have been complied
with. (Article 12)
AMENDMENT, SUPPLEMENT AND WAIVER
The Indenture, the Notes and the Pledge Agreement may be amended or
supplemented with the consent of the holders of at least a majority in principal
amount of the Notes then outstanding (including consents obtained in connection
with a tender offer or exchange offer for Notes); provided, however, that
without the consent of each holder affected, an amendment or supplement may not:
(i) reduce the principal amount of Notes whose holders must consent to an
amendment, supplement or waiver, (ii) reduce the principal of or change the
fixed maturity of any Note or alter the provisions with respect to the
redemption of the Notes, (iii) reduce the rate of or change the time for payment
of interest on any Note, (iv) waive a Default or Event of Default in the payment
of principal of or premium, if any, or interest on the Notes (except a
rescission of acceleration of the Notes by the holders of at least a majority in
aggregate principal amount of the Notes and a waiver of the payment default that
resulted from such acceleration), (v) make any Note payable in money other than
that stated in the Notes, (vi) make any change in the provisions of the
Indenture or the Pledge Agreement relating to waivers of past defaults or the
rights of holders of Notes to receive payments of principal of or premium, if
any, or interest on the Notes, (vii) waive a redemption payment with respect to
any Note or (viii) make any change in the foregoing amendment and waiver
provisions. (Section 902)
Notwithstanding the foregoing, without the consent of any holder of Notes,
Alpine and the Trustee may amend or supplement the Indenture, the Notes or the
Pledge Agreement to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of Alpine's obligations to holders of the Notes in
the case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the holders of the Notes or that does not
adversely affect the legal rights under the Indenture or the Pledge Agreement of
any such holder, or to comply with requirements of the Commission in order to
effect or maintain the qualification of the Indenture under the Trust Indenture
Act. (Section 901)
Alpine or any Subsidiary Guarantor may omit in any particular instance to
comply with certain covenants or conditions set forth in the Indenture or the
Pledge Agreement if, before or after the time for such compliance, the holders
of a majority in aggregate principal amount of the Notes at the time outstanding
shall, by act of such holders, waive such compliance in such instance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived. (Section 1020)
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of Alpine, to obtain payment of claims in certain
cases, or to realize on certain property received in respect of any such claim
as security or otherwise. The Trustee will be permitted to engage in other
transactions; however, if it acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the Commission for permission to continue
as Trustee with such conflict or resign as Trustee. (Sections 608 and 611)
The holders of a majority in principal amount of the then outstanding Notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default will
occur (which has
51
<PAGE>
not been cured), the Trustee will be required, in the exercise of its power, to
use the degree of care of a prudent man in the conduct of his own affairs.
Subject to such provisions, the Trustee will be under no obligation to exercise
any of its rights or powers under the Indenture at the request of any holder of
Notes, unless such holder shall have offered to the Trustee security and
indemnity satisfactory to it against any loss, liability or expense. (Section
602)
BOOK-ENTRY DELIVERY AND FORM
The certificates representing the Old Notes were, and the certificates
representing the New Notes will be, issued in fully registered form. Except as
described in the next paragraph, the Old Notes initially were represented by a
single, permanent global Old Note in definitive, fully registered form without
interest coupons (the "Old Global Note") that was deposited with the Trustee as
custodian for DTC and registered in the name of a nominee of DTC. Except as
described in the next paragraph, the New Notes initially will be represented by
a single, permanent global New Note in definitive, fully registered form without
interest coupons (the "New Global Note") that will be deposited with the Trustee
as custodian for DTC and registered in the name of a nominee for DTC. The Old
Global Note and the New Global Note are collectively referred to as the "Global
Note." The Old Global Note (and any Old Notes issued in exchange therefor) is
subject to certain restrictions on transfer set forth therein and in the
Indenture and will bear the respective legends regarding such transfer
restrictions.
Notes (i) originally purchased by or transferred to institutional
"accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) ("Institutional Accredited Investors") who are not "qualified
institutional buyers" (as defined in Rule 144A ("Rule 144A") under the
Securities Act) ("QIBs"), (ii) except as described below, Persons outside the
United States pursuant to sales in accordance with Regulation S under the
Securities Act or (iii) held by QIBs who elect to take physical delivery of
their certificates instead of holding their interest through the Global Note
(and which are then unable to trade through DTC) (collectively referred to
herein as the "Non-Global Purchasers"), will be in registered form without
interest coupons ("Certificated Notes"). Upon the transfer of Certificated Notes
initially issued to a Non-Global Purchaser to a QIB, such Certificated Notes
will, unless the transferee requests otherwise or the Global Note has previously
been exchanged in whole for Certificated Notes, be exchanged for an interest in
the Global Note.
DTC has advised Alpine as follows: DTC is a limited purpose trust company
organized under the laws of the State of New York, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the Uniform Commercial
Code and a "Clearing Agency" registered pursuant to the provision of Section 17A
of the Exchange Act. DTC was created to hold securities for its participants and
facilitate the clearance and settlement of securities transactions between
participants through electronic book-entry changes in accounts of its
participants, thereby eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers, banks, trust
companies and clearing corporations and certain other organizations. Indirect
access to the DTC system is available to others such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, either directly or indirectly ("indirect participants").
DTC or its custodian will credit, on its internal system, the respective
principal amount of the individual beneficial interests represented by the
Global Note to the accounts of persons who have accounts with such depositary.
Ownership of beneficial interests in the Global Note will be limited to persons
who have accounts with DTC ("participants") or persons who hold interests
through participants. Ownership of beneficial interests in the Global Note will
be shown on, and the transfer of that ownership will be effected only through,
records maintained by DTC or its nominee (with respect to interests of
participants) and the records of participants (with respect to interests of
persons other than participants). QIBs may hold their interests in the Global
Note directly through DTC if they are participants in such system, or indirectly
through organizations which are participants in such system.
So long as DTC or its nominee is the registered owner or holder of the
Global Note, DTC or such nominee, as the case may be, will be considered the
sole record owner or holder of the Notes represented by
52
<PAGE>
such Global Note for all purposes under the Indenture and the Notes. No
beneficial owners of an interest in the Global Note will be able to transfer
that interest except in accordance with DTC's applicable procedures, in addition
to those provided for under the Indenture.
Payments of the principal of, premium, if any, and interest on the Global
Note will be made to DTC or its nominee, as the case may be, as the registered
owner thereof. Neither Alpine, the Trustee, nor any paying agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global Note or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
Alpine expects that DTC or its nominee, upon receipt of any payment of
principal, premium, if any, or interest in respect of the Global Note will
credit participants' accounts with payments in amounts proportionate to their
respective beneficial ownership interests in the principal amount of such Global
Note, as shown on the records of DTC or its nominee. Alpine also expects that
payments by participants to owners of beneficial interests in such Global Note
held through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers registered in the names of nominees for such customers. Such payments
will be the responsibility of such participants.
Transfers between participants in DTC will be effected in the ordinary way
in accordance with DTC rules. If a holder requires physical delivery of
Certificated Notes for any reason, including to sell Notes to persons in states
which require such delivery of such Notes or to pledge such Notes, such holder
must transfer its interest in the Global Note, in accordance with the normal
procedures of DTC and the procedures set forth in the Indenture.
Neither Alpine nor the Trustee will have any responsibility for the
performance by DTC or its participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
Subject to certain conditions, any person having a beneficial interest in
the Global Note may, upon request to the Trustee, exchange such beneficial
interest for Notes in the form of Certificated Notes. Upon any such issuance,
the Trustee is required to register such Certificated Notes in the name of, and
cause the same to be delivered to, such person or persons (or the nominee of any
thereof). If such Certificated Notes are Old Notes, they will bear a restrictive
legend to the effect that such Old Notes have not been registered under the
Securities Act and may not be sold or otherwise transferred unless they are
registered under the Securities Act or unless an exemption from such
registration requirements is available. In addition, if DTC is at any time
unwilling or unable to continue as a depositary for the Global Note and a
successor depositary is not appointed by Alpine within 90 days, Alpine will
issue Certificated Notes in exchange for the Global Note, which, in the case of
Old Notes issued in exchange for the Global Note will bear a restrictive legend.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full definition of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.
(Section 101)
"ACCRETED VALUE" means, for any particular date of determination (any such
date being herein referred to as a "Specified Date"), the amount provided below
for each $1,000 principal amount at maturity of Notes outstanding:
53
<PAGE>
A. If the Specified Date occurs on one of the following Interest Payment
Dates, the Accreted Value will equal the amount set forth below:
<TABLE>
<CAPTION>
ACCRETED
INTEREST PAYMENT DATE VALUE
----------------------------------------------------- ----------
<S> <C>
January 15, 1996..................................... $ 920.31
July 15, 1996........................................ 923.48
January 15, 1997..................................... 926.87
July 15, 1997........................................ 930.50
January 15, 1998..................................... 934.39
July 15, 1998........................................ 938.54
January 15, 1999..................................... 942.99
July 15, 1999........................................ 947.75
January 15, 2000..................................... 952.84
July 15, 2000........................................ 958.29
January 15, 2001..................................... 964.12
July 15, 2001........................................ 970.36
January 15, 2002..................................... 977.04
July 15, 2002........................................ 984.18
January 15, 2003..................................... 991.82
July 15, 2003........................................ 1,000.00
</TABLE>
B. If the Specified Date occurs before the first Interest Payment Date, the
Accreted Value will equal the sum of (1) the original issue price and (2) an
amount equal to the product of (i) the Accreted Value for the first Interest
Payment Date less the original issue price multiplied by (ii) a fraction, the
numerator of which is the number of days from the issue date of the Notes to the
Specified Date, using a 360-day year of twelve 30-day months, and the
denominator of which is the number of days elapsed from the issue date of the
Notes to the first Interest Payment Date, using a 360-day year of twelve 30-day
months.
C. If the Specified Date occurs between two Interest Payment Dates, the
Accreted Value will equal the sum of (1) the Accreted Value for the Interest
Payment Date immediately preceding such Specified Date and (2) an amount equal
to the product of (i) the Accreted Value for the immediately following Interest
Payment Date less the Accreted Value for the immediately preceding Interest
Payment Date multiplied by (ii) a fraction, the numerator of which is the number
of days from the immediately preceding Interest Payment Date to the Specified
Date, using a 360-day year of twelve 30-day months, and the denominator of which
is 180.
"ACQUIRED DEBT" means Debt of a Person (i) existing at the time such Person
becomes a Subsidiary or (ii) assumed in connection with the acquisition of
assets from such Person.
"ADIENCE ACQUISITION CONSIDERATION" means the shares of Alpine 8% Preferred
Stock and/or PolyVision common stock to be delivered pursuant to the debt
exchange agreement, dated October 11, 1994, as amended, and the stock purchase
agreement, dated October 11, 1994, as amended, relating to the acquisition of
Adience by Alpine.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided, however,
that beneficial ownership of 10% or more of the voting securities of a Person
will be deemed to be control.
"ASSET SALE" means any sale, issuance, conveyance, transfer, lease or other
disposition by Alpine or any Restricted Subsidiary (including, without
limitation, by way of merger, consolidation or sale and leaseback transaction)
(collectively, a "transfer"), directly or indirectly, in one or a series of
related transactions, to any
54
<PAGE>
Person other than Alpine or a Restricted Subsidiary of: (i) any Capital Stock of
any Restricted Subsidiary; (ii) substantially all of the properties and assets
of Alpine or any Restricted Subsidiary representing a division or line of
business; or (iii) any other properties or assets of Alpine or any Restricted
Subsidiary, other than in the ordinary course of business. For the purposes of
this definition, the term "Asset Sale" shall not include any transfer of
properties or assets (A) that is governed by the provisions of the Indenture
described under "Merger, Consolidation or Sale of Assets," (B) to an
Unrestricted Subsidiary, if permitted under the "Limitation on Restricted
Payments" covenant, (C) by or on behalf of a creditor pursuant to a pledge
agreement, security agreement, mortgage or other similar agreement or
instrument, (D) consisting of Adience's former corporate headquarters located in
Pittsburgh, Pennsylvania, (E) consisting of Adience Acquisition Consideration,
(F) consisting of shares of PolyVision Capital Stock issued or issuable to
officers, directors or employees of Alpine or its Subsidiaries upon exercise of
stock options or pursuant to grants or awards under employee benefit plans,
provided that the fair market value of such Capital Stock at the respective
dates of such grant or award, as determined by the Board of Directors of Alpine
whose good faith determination shall be conclusive and evidenced by one or more
Board Resolutions, shall be less than $3.0 million in the aggregate or (G) that
have a fair market value of less than $1.0 million or that are sold for net
proceeds of less than $1.0 million. A transfer of assets by Alpine to a
Restricted Subsidiary or by a Restricted Subsidiary to Alpine or to another
Restricted Subsidiary will not be deemed to be an Asset Sale, and a transfer of
assets that constitutes a Restricted Payment and that is permitted by the
"Limitation on Restricted Payments" covenant, will not be deemed to be an Asset
Sale.
"ATTRIBUTABLE DEBT" in respect of a sale and leaseback transaction means, at
the time of determination, the present value (discounted at the actual rate of
interest implicit in such transaction) of the obligation of the lessee for net
rental payments during the remaining term of the lease included in such sale and
leaseback transaction (including any period for which such lease has been
extended or may, at the option of the lessor, be extended).
"CAPITAL LEASE OBLIGATION" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet prepared in
accordance with GAAP.
"CAPITAL STOCK" of any Person means any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock of such Person.
"CASH EQUIVALENTS" means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof having maturities of not more than 12 months from the
date of acquisition, (ii) certificates of deposit and eurodollar time deposits
with maturities of 12 months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding 12 months and overnight bank deposits,
in each case with any commercial or chartered bank having capital and surplus in
excess of $250.0 million, (iii) repurchase obligations with a term of not more
than 30 days for underlying securities of the types described in clauses (i) and
(ii) entered into with any financial institution meeting the qualifications
specified in clause (ii) above, and (iv) commercial paper having at the time of
investment therein or a contractual commitment to invest therein a rating of A-1
by S&P or the equivalent thereof by Moody's, and in each case maturing within
nine months after the date of the acquisition.
"CHANGE OF CONTROL" means the occurrence of any of the following events:
(a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than Steven S. Elbaum or Bragi F.
Schut and their respective Affiliates (the "Management Investors"), is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a Person will be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of more than 33 1/3% of the outstanding
Voting Stock of Alpine;
(b) Alpine consolidates with, or merges with or into, another Person or
conveys, transfers, leases or otherwise disposes of all or substantially all
of its assets to any Person, or any Person consolidates
55
<PAGE>
with, or merges with or into, Alpine, in any such event pursuant to a
transaction in which the outstanding Voting Stock of Alpine is converted
into or exchanged for cash, securities or other property, other than any
such transaction where (i) the outstanding Voting Stock of Alpine is not
converted or exchanged at all (except to the extent necessary to reflect a
change in the jurisdiction of incorporation of Alpine) or is converted into
or exchanged for (A) Voting Stock (other than Disqualified Stock) of the
surviving or transferee corporation or (B) cash, securities and other
property (other than Capital Stock of the entity surviving such transaction)
in an amount that could be paid by Alpine as a Restricted Payment as
described under the "Limitation on Restricted Payments" covenant and (ii)
immediately after such transaction, clause (a) above is not violated with
respect to the outstanding Voting Stock of the surviving or transferee
corporation;
(c) during any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors of Alpine
(together with any new directors whose election to such Board of Directors,
or whose nomination for election by the stockholders of Alpine, was approved
by a vote of 66 2/3% of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute
a majority of the Board of Directors of Alpine then in office; or
(d) Alpine is liquidated or dissolved or adopts a plan of liquidation or
dissolution other than in a transaction that complies with the provisions
described under "Merger, Consolidation or Sale of Assets."
"CONSOLIDATED CASH FLOW" means, for any period, Consolidated Net Income for
such period (exclusive of amounts attributable to discontinued operations, as
determined in accordance with GAAP) plus, without duplication, (i) Consolidated
Income Tax Expense for such period (other than income tax expense (either
positive or negative) excluded in computing Consolidated Net Income, plus (ii)
Consolidated Interest Expense for such period, plus (iii) depreciation,
amortization (including amortization of goodwill and other intangibles) and
other non-cash charges (excluding any such non-cash charge that results in an
accrual or a reserve for cash charges in any future period) for such period to
the extent such depreciation, amortization and other non-cash charges were
deducted in computing such Consolidated Net Income less (iv) all non-cash items
(excluding any non-cash charge which represents an accrual or reserve for cash
charges for any future period) to the extent included in computing such
Consolidated Net Income, in each case, on a consolidated basis and determined in
accordance with GAAP.
"CONSOLIDATED INCOME TAX EXPENSE" means, for any period, the income tax
expense of Alpine and its Restricted Subsidiaries for such period determined on
a consolidated basis in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, without duplication,
the sum of (a) the consolidated interest expense included in a consolidated
income statement (without deduction of interest income) of Alpine and its
Restricted Subsidiaries for such period determined in accordance with GAAP,
including without limitation (i) imputed interest on Capital Lease Obligations,
(ii) commissions, discounts and other fees and charges owed with respect to
letters of credit securing financial obligations and bankers' acceptance
financings, (iii) the net costs associated with Hedging Obligations, (iv)
amortization of other financing fees and expenses, (v) the interest portion of
any deferred payment obligations, (vi) amortization of debt discount or premium,
if any, (vii) all other non-cash interest expense, (viii) capitalized interest
and (ix) all interest payable with respect to discontinued operations, plus (b)
all interest on any Debt of any other Person guaranteed by Alpine or any of its
Restricted Subsidiaries, plus (c) imputed interest on Attributable Debt of
Alpine and its Restricted Subsidiaries.
"CONSOLIDATED NET INCOME" means, for any period, the aggregate of the net
income (loss) of Alpine and its Restricted Subsidiaries, and before any
reduction in respect of preferred stock dividends, for such period, on a
consolidated basis, determined in accordance with GAAP, provided that (i) any
gain or loss, together with any related provisions for taxes on such gain or
loss, realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions), or (b)
the disposition of any securities or the extinguishment of any Debt of Alpine or
any of its Restricted Subsidiaries will be
56
<PAGE>
excluded; (ii) any extraordinary gain or loss, together with any related
provision for taxes on such extraordinary gain or loss, will be excluded; (iii)
the net income (loss) of a Person that is not a Restricted Subsidiary or that is
accounted for by the equity method of accounting will be included only to the
extent of the amount of dividends or distributions paid in cash to Alpine or a
Restricted Subsidiary thereof; (iv) the net income of any Restricted Subsidiary
to the extent that the payment of dividends or distributions by such Restricted
Subsidiary is restricted, directly or indirectly, except to the extent that such
net income could be paid to Alpine or a Restricted Subsidiary thereof by way of
loans, advances, intercompany transfers, principal repayments or otherwise, will
be excluded; (v) the net income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition will be
excluded; and (vi) the cumulative effect of a change in accounting principles
will be excluded.
"CONSOLIDATED NET WORTH" means the common and preferred stockholders' equity
of Alpine and its Restricted Subsidiaries (excluding any Disqualified Stock and
any accumulated foreign currency translation adjustment), as determined on a
consolidated basis and in accordance with GAAP.
"DEBT" means (without duplication), with respect to any Person, (i) any
indebtedness (including Acquired Debt and Attributable Debt), whether or not
contingent, in respect of borrowed money or evidenced by bonds, notes,
debentures or similar instruments or letters of credit (or reimbursement
agreements in respect thereof) or representing Capital Lease Obligations or the
balance deferred and unpaid of the purchase price of any property or
representing any Hedging Obligations, except any such balance that constitutes
an accrued expense or trade payable, if and to the extent any such indebtedness
(other than letters of credit and Hedging Obligations) would appear as a
liability upon a balance sheet of such Person prepared in accordance with GAAP,
(ii) all indebtedness of others secured by a Lien on any asset of such Person,
whether or not such indebtedness is assumed by such Person, and (iii) to the
extent not otherwise included, the guarantee of any Debt of any other Person by
such Person.
"DEFAULT" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"DISQUALIFIED STOCK" means any class or series of Capital Stock that, by its
terms, by the terms of any security into which it is convertible or exchangeable
or by contract or otherwise, is, or upon the happening of an event or passage of
time would be, required to be redeemed prior to the final Stated Maturity of the
Notes or is redeemable at the option of the holder thereof at any time prior to
such final Stated Maturity, or is convertible into or exchangeable for, at any
time prior to such final Stated Maturity, debt securities that are PARI PASSU
with the Notes or are due and payable, or redeemable at the option of the holder
thereof at any time, prior to such final Stated Maturity.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into or exchangeable for Capital Stock).
"FIXED CHARGE COVERAGE RATIO" means, for any period, the ratio of the
Consolidated Cash Flow for such period to the Fixed Charges for such period
(exclusive of amounts attributable to discontinued operations, as determined in
accordance with GAAP).
"FIXED CHARGES" means, for any period, the sum of (a) the Consolidated
Interest Expense for such period and (b) preferred stock dividends paid in cash
by Alpine or its Restricted Subsidiaries to any Person other than Alpine or a
Restricted Subsidiary.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"HEDGING OBLIGATIONS" means the obligations of a Person under (i) interest
rate swap agreements, interest rate cap agreements and interest rate collar
agreements and (ii) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates or the value of foreign
currencies.
57
<PAGE>
"INVESTMENTS" means all investments by Alpine or its Restricted Subsidiaries
in other Persons (including Affiliates) in the form of loans (including
guarantees), advances (excluding commission, travel and similar advances to
officers and employees made in the ordinary course of business), or capital
contributions, purchases or other acquisitions for consideration of Debt, Equity
Interests or other securities and all other items that are or would be
classified as investments in other Persons on a balance sheet prepared in
accordance with GAAP.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law (including
any conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction).
"NET CASH PROCEEDS" means the aggregate cash proceeds received by Alpine or
any of its Restricted Subsidiaries in respect of any Asset Sale, net of the
direct costs relating to such Asset Sale (including, without limitation, legal,
accounting and investment banking fees, and sales commissions), taxes paid or
payable as a result thereof (after taking into account any available tax credits
or deductions and any tax sharing arrangements), amounts required to be applied
to the repayment of Debt (other than Debt that is by its terms subordinated to
Notes) upon sale of the asset or assets that are the subject of such Asset Sale,
and any reserve for adjustment in respect of the sale price of such asset or
assets.
"NEW CREDIT AGREEMENT" means the credit agreement dated on or about the date
of the Indenture, between Shawmut Capital Corporation, as agent, and the other
lenders parties thereto (including, without limitation, any guarantees, security
documents and other documents related thereto, and reimbursement and indemnity
agreements pertaining to letter of credit facilities entered into thereunder),
as amended, restated, supplemented or otherwise modified from time to time;
provided that with respect to any agreement providing for the refinancing of
Debt under the New Credit Agreement, such agreement shall be the New Credit
Agreement under the Indenture only if a notice to that effect is delivered by
Alpine to the Trustee and there shall be at any time only one instrument that is
the New Credit Agreement under the Indenture.
"NON-RECOURSE DEBT" means, with respect to an Unrestricted Subsidiary of
Alpine, Debt or that portion of Debt (i) as to which neither Alpine nor any of
its Restricted Subsidiaries (a) provide credit support (including any
undertaking, agreement or instrument that would constitute Debt), or (b) is
directly or indirectly liable; and (ii) no default with respect to which
(including any rights that the holders thereof may have to take enforcement
action against an Unrestricted Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Debt (other than the Notes) of Alpine or
any of its Restricted Subsidiaries to declare a default on such other Debt or
cause the payment thereof to be accelerated or payable prior to its stated
maturity.
"NON-U.S. RESTRICTED SUBSIDIARY" means a Restricted Subsidiary that is not a
U.S. Restricted Subsidiary.
"PARI PASSU," when used with respect to the ranking of any Debt of any
Person in relation to other Debt of such Person, means that such Debt being so
ranked (a) either (i) is not subordinated in right of payment to such other Debt
of such Person or (ii) is subordinated in right of payment to other Debt of such
Person as is the other and is so subordinated to the same extent and (b) is not
subordinated in right of payment to the other or to any Debt of such Person as
to which the other is not so subordinated.
"PERMITTED INVESTMENTS" means
(i) any Investments in Alpine or in a Restricted Subsidiary;
(ii) any Investments in Cash Equivalents;
(iii) Investments by Alpine or any Restricted Subsidiary in a Person, if
as a result of such Investment (a) such Person becomes a Restricted
Subsidiary that is engaged in the same or a similar line of business to that
which Alpine and its Restricted Subsidiaries were engaged in on the date of
the
58
<PAGE>
Investment or (b) such Person is merged or consolidated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated
into, Alpine or a Restricted Subsidiary that is engaged in the same or a
similar line of business to that which Alpine and its Restricted
Subsidiaries were engaged in on the date of the Investment;
(iv) securities and other non-cash consideration received by Alpine or a
Restricted Subsidiary in an Asset Sale permitted by the "Limitation on
Disposition of Proceeds of Asset Sales" covenant;
(v) Investments in PolyVision on the date of the initial issuance of the
Notes and Investments in indebtedness of PolyVision in an aggregate amount
not to exceed $7.5 million pursuant to agreements in effect on the date of
the original issuance of the Notes; provided, however, that (A) all or any
portion of such Investments may be converted into (or exchanged for) equity
securities of PolyVision so long as such conversion or exchange is approved
by the Board of Directors of Alpine (including a majority of the
disinterested directors of Alpine) as in the best interest of Alpine, and
(B) Alpine may receive equity securities of PolyVision in payment of
interest accrued on up to $7.5 million of such indebtedness; and
(vi) delivery of the Adience Acquisition Consideration.
"PREFERRED STOCK" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's preferred or preference stock, whether now outstanding or issued after
the date of the Indenture, and includes, without limitation, all classes and
series of preferred or preference stock.
"QUALIFIED CAPITAL STOCK" means any Capital Stock or Equity Interest other
than Disqualified Stock.
"QUALIFIED EQUITY INTEREST" means any Qualified Capital Stock and all
warrants, options or other rights to acquire Qualified Capital Stock (but
excluding any debt security that is convertible into or exchangeable for Capital
Stock).
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"RESTRICTED SUBSIDIARY" means any Subsidiary that is not an Unrestricted
Subsidiary.
"SIGNIFICANT SUBSIDIARY" means any Restricted Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of the Indenture.
"STATED MATURITY" when used with respect to any Debt or any installment of
principal thereof or interest thereon means the date specified in the instrument
evidencing or governing such Debt as the fixed date on which the principal
amount of such Debt or such installment of principal or interest is due and
payable.
"SUBSIDIARY" means any Person a majority of the equity ownership or Voting
Stock of which is at the time owned, directly or indirectly, by Alpine or by one
or more other Subsidiaries or by Alpine and one or more other Subsidiaries.
"SUBSIDIARY GUARANTOR" means the Restricted Subsidiaries that, from time to
time, provide a Subsidiary Guarantee.
"UNRESTRICTED SUBSIDIARY" means (i) PolyVision France, S.A., (ii) any
Subsidiary that is designated by the Board of Directors as an Unrestricted
Subsidiary in accordance with the "Limitation on Unrestricted Subsidiaries"
covenant and (iii) any Subsidiary of an Unrestricted Subsidiary.
"U.S. RESTRICTED SUBSIDIARY" means a Restricted Subsidiary organized under
the laws of the United States of America or any State thereof or the District of
Columbia.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Debt at any
date, the number of years obtained by dividing (i) the sum of the products
obtained by multiplying (a) 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 (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment, by (ii) the then outstanding principal amount of
such Debt.
59
<PAGE>
"VOTING STOCK" means any class or classes of Capital Stock pursuant to which
the holders thereof have the general voting power under ordinary circumstances
to elect at least a majority of the board of directors, managers or trustees of
any Person (irrespective of whether or not, at the time, stock of any other
class or classes shall have, or might have, voting power by reason of the
happening of any contingency).
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
GENERAL
Subject to certain limitations set forth below, the following summary, in
the opinion of Proskauer Rose Goetz & Mendelsohn LLP, fairly presents the
material U.S. federal income tax consequences of the Exchange Offer and the
ownership and disposition of the New Notes and contains in all material respects
an accurate description of the U.S. federal income tax provisions discussed
herein. The summary is based upon the Internal Revenue Code (the "Code"),
Treasury regulations (including proposed Treasury regulations) ("Regulations"),
Internal Revenue Service ("IRS") rulings and pronouncements and judicial
decisions currently in effect, all of which are subject to change, possibly on a
retroactive basis.
This summary does not discuss all aspects of U.S. federal income taxation
that may be relevant to investors in light of their personal investment
circumstances, including any elections made by the investors under any
applicable tax law. This summary applies to beneficial owners of the Notes who
hold such Notes as capital assets and does not apply to certain types of holders
subject to special treatment under the U.S. federal income tax laws (for
example, dealers in securities, tax-exempt organizations, insurance companies,
persons other than the initial holders of the New Notes, persons that will hold
Notes as a position in an integrated transaction (including a "straddle")
consisting of Notes and one or more other positions and persons that have a
"functional currency" other than the U.S. dollar) and does not discuss the
consequences to a holder under state, local or foreign tax laws.
Alpine has not sought and will not seek any rulings from the IRS with
respect to the positions discussed below. There can be no assurance that the IRS
will not take a different position concerning the tax consequences of the
Exchange Offer and ownership or disposition of the Old Notes or New Notes or
that any such position would not be sustained.
As used herein, the term "U.S. Holder" means a beneficial owner of a Note
that is for U.S. federal income tax purposes (i) a citizen or resident of the
United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any political
subdivision thereof, (iii) an estate or trust the income of which is subject to
United States federal income taxation regardless of its source or (iv) any other
person or entity whose income or gain in respect of a Note is effectively
connected with the conduct of a United States trade or business. As used herein,
the term "Non-U.S. Holder" means a beneficial holder of a Note that is not a
U.S. Holder.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS
REGARDING THE FEDERAL, STATE, LOCAL AND OTHER TAX CONSIDERATIONS OF THE EXCHANGE
OFFER AND THE OWNERSHIP AND DISPOSITION OF THE NOTES.
U.S. HOLDERS
EXCHANGE OFFER. The exchange pursuant to the Exchange Offer of Old Notes
for New Notes will not be treated as a taxable exchange for U.S. federal income
tax purposes and the New Notes will be treated as a continuation of the Old
Notes, because the terms of the New Notes are identical in all material respects
to the terms of the Old Notes. Accordingly, a U.S. Holder will not recognize
gain or loss upon such exchange.
INTEREST AND ORIGINAL ISSUE DISCOUNT. Interest on a Note generally will be
taxable to a U.S. Holder as ordinary interest income at the time it is paid or
accrued in accordance with the U.S. Holder's method of accounting for tax
purposes.
Under the Code, a U.S. Holder of a debt instrument with OID must include a
portion of the OID in gross income as interest in each taxable year or portion
thereof in which the holder holds the debt instrument even if the holder has not
received a cash payment in respect of such OID.
60
<PAGE>
In accordance with Sections 1271 through 1275 of the Code, a debt instrument
bears OID if its stated redemption price at maturity exceeds its issue price by
more than a DE MINIMIS amount. Under the DE MINIMIS rule, if OID with respect to
a debt instrument is less than one-fourth of one percent of its stated
redemption price at maturity multiplied by the number of complete years from the
issue date to the maturity date of the debt instrument, then the amount of OID
will be considered to be zero.
The stated redemption price at maturity is the sum of all payments provided
by the Note other than "qualified stated interest" payments. Qualified stated
interest is stated interest that is unconditionally payable in cash or in
property (other than debt instruments of the issuer) at least annually at a
single fixed rate. The periodic interest payments on the Note based on the
original interest rate set forth on the cover of this Offering Memorandum will
constitute qualified stated interest for this purpose. Therefore, the stated
redemption price at maturity of the Notes is their stated principal amount. The
issue price of the Notes is the price at which a substantial portion of such
Notes are sold to investors.
The Notes will be issued with OID in excess of the DE MINIMIS amount, and
therefore a U.S. Holder will be required to include in income an amount equal to
the sum of the "daily portions" of such OID for all days during the taxable year
in which it holds the Notes, including the purchase date and excluding the
disposition date. The amount of OID will be computed by the "constant yield
method" under which the daily portions of OID required to be included in a U.S.
Holder's gross income in a taxable year will be determined by allocating to each
day during an "accrual period" in which the U.S. Holder holds the Note a pro
rata portion of the increase during such accrual period in the "adjusted issue
price" of the Notes. The increase in the adjusted issue price of a debt
instrument for an accrual period is equal to the product of the adjusted issue
price at the beginning of such accrual period multiplied by the "yield to
maturity" of the debt instrument, less any qualified stated interest payable
under the debt instrument. The adjusted issue price of a debt instrument at the
beginning of an accrual period is generally defined as its issue price increased
by all accrued OID for prior accrual periods and decreased by all cash payments
other than qualified stated interest payments. The yield to maturity is the
discount rate that, when used in computing the present value of all principal
and interest payments to be made under a debt instrument, produces an amount
equal to the issue price of the debt instrument. Alpine intends to use a
semi-annual compounding period for calculation of OID. The amount of OID
required to be included in income by a U.S. Holder of a Note may be reduced if
the Note is acquired at an "acquisition premium." "Acquisition premium" is any
amount paid by the holder for an obligation in excess of its adjusted issue
price at the time of acquisition, but not in excess of the stated redemption
price at maturity.
In the event of a Change of Control, Alpine will be required to offer to
repurchase all of the Notes. Based on the Regulations, the right of U.S. Holders
of the Notes to require repurchase upon the occurrence of a Change of Control
will not affect the yield or maturity date of the Notes unless, based on all the
facts and circumstances as of the issue date, it is more likely than not that
such an event giving rise to the repurchase will occur. Alpine does not believe
that this is the case and does not intend to treat the Change of Control
provisions of the Notes as affecting the computation of the yield to maturity of
any Note.
Alpine is required to furnish certain information to the IRS, and will
furnish annually to record holders of the Notes information with respect to OID
accruing during the calendar year, as well as interest paid during that year.
SALE, EXCHANGE OR RETIREMENT OF NOTES Upon the sale, exchange (except
pursuant to the Exchange Offer as provided above), retirement or other
disposition of a Note, a U.S. Holder will recognize gain or loss equal to the
difference between the amount realized (except to the extent attributable to
accrued interest) and the U.S. Holder's adjusted tax basis in the Note. A U.S.
Holder's adjusted tax basis in a Note will be equal to the cost of the Note,
increased by accrued market discount, if any, if the U.S. Holder had included
such market discount in income (see "Market Discount" below), and by accrued OID
and decreased by any amortized bond premium (defined below) and payments
received, other than qualified stated interest. Generally, and subject to the
discussion under "Market Discount" below, any gain or loss recognized by a U.S.
Holder upon a sale, retirement or other disposition of the Note will be
long-term capital gain or loss if the Note has been held for more than one year.
61
<PAGE>
ACQUISITION AT A PREMIUM. If a subsequent U.S. Holder acquires a Note for
an amount (exclusive of accrued and unpaid interest through the acquisition
date) in excess of the Note's stated redemption price at maturity ("Bond
Premium"), the U.S. Holder may elect, in accordance with applicable Code
provisions, to amortize the Bond Premium using a constant yield method. The
amount of Bond Premium amortized in any year will be treated as a reduction of
the U.S. Holder's interest income from the Note.
MARKET DISCOUNT. If a holder purchases a Note for an amount that is less
than its issue price (or, in the
case of a subsequent purchaser, its "revised issue price," as defined in the
Code) as of the purchase date, the amount of the difference will be treated as
"market discount," unless such difference is less than a specified DE MINIMIS
amount. Market discount generally will accrue ratably during the period from the
date of the acquisition to the maturity date of the Note, unless the U.S. Holder
elects to accrue such discount on the basis of the constant interest method, in
accordance with applicable Code provisions.
A holder of a Note with market discount generally will be required to treat
as ordinary income any gain recognized on the sale, exchange, retirement or
other disposition of the Note to the extent of accrued market discount unless
the U.S. Holder elects in accordance with the applicable Code provisions to
include market discount in income as it accrues. A holder of a Note acquired at
market discount who does not make a current inclusion election will be required
to defer the deduction of all or a portion of the interest on any indebtedness
incurred or maintained to purchase or carry the Note until the maturity of the
Note or its earlier disposition in a taxable transaction.
NON-U.S. HOLDERS
Notwithstanding the foregoing and subject to the discussion of backup
withholding below, payments to Non-U.S. Holder of principal, redemption or
repurchase premium, if any, and interest (including OID) by Alpine or its agent
(in its capacity as such) will not be subject to United States federal
withholding tax, provided, in the case of redemption or repurchase premium, if
any, and interest (including OID), that (i) such Non-U.S. Holder does not
actually or constructively own 10% of more of the total combined voting power of
all classes of stock of Alpine entitled to vote, (ii) such Non-U.S. Holder is
not a controlled foreign corporation for United States tax purposes that is
related to Alpine through stock ownership, and (iii) either (A) the beneficial
owner of the Note certifies to Alpine or its agent, under penalties of perjury,
that he is not a United States person and provides his name and address or (B) a
securities clearing organization, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business (a
"financial institution") certifies to Alpine or its agent, under penalties of
perjury, that the certification described in clause (A) hereof has been received
from the beneficial owner by it or by another financial institution acting for
the beneficial owner.
If a Non-U.S. Holder is engaged in a trade or business in the United States
and redemption or repurchase premium, if any, and interest (including OID) on
the Note is effectively connected with the conduct of such trade or business,
such holder, although exempt from United States withholding tax as discussed in
the preceding paragraph (or by reason of the delivery of a properly completed
Form 4224), will be subject to U.S. federal income tax on such premium, if any,
and interest (including OID) in the same manner as if it were a U.S. Holder.
Subject to the discussion of backup withholding below, any capital gain
realized upon the sale, exchange or retirement of a Note by a Non-U.S. Holder
will not be subject to U.S. federal income or withholding taxes unless (i) such
gain is effectively connected with a U.S. trade or business of the holder, or
(ii) in the case of an individual, such holder is present in the United States
for 183 days or more in the taxable year of the retirement or disposition and
certain other conditions are met.
BACKUP WITHHOLDING AND INFORMATION REPORTING
The "backup" withholding and information reporting requirements may apply to
certain payments of principal, redemption or repurchase premium, if any, and
interest (including OID) on a Note and to certain payments of proceeds of the
sale or retirement of a Note. Alpine, its agent, a broker, or any paying agent,
as the case may be, will be required to withhold tax from any payment that is
subject to backup withholding at a rate of 31% of such payment if the holder of
the Note fails to furnish his taxpayer identification number
62
<PAGE>
(social security number or employer identification number), to certify that such
holder is not subject to backup withholding or to otherwise comply with the
applicable requirements of the backup withholding rules. Certain holders
(including, among others, all corporations) are not subject to the backup
withholding and reporting requirements.
Under current Regulations, backup withholding and information reporting will
not apply to payments made by Alpine or any agent thereof (in its capacity as
such) to a Non-U.S. Holder who has provided the required certification under
penalties of perjury that it is not a United States person, as set forth in
clause (iii) in the first paragraph under "Non-U.S. Holders" or has otherwise
established an exemption (provided that neither Alpine nor such agent has actual
knowledge that the holder is a U.S. Holder or that the conditions of any other
exemption are not in fact satisfied).
Any amounts withheld under the backup withholding rules from a payment to a
holder may be claimed as a credit against such holder's United States federal
income tax liability.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR
SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE EXCHANGE OFFER AND THE OWNERSHIP AND DISPOSITION OF
THE NOTES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER
TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
63
<PAGE>
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of New Notes received in exchange for Old Notes where
such Old Notes were acquired as a result of market-making activities or other
trading activities. Alpine has agreed that for a period of 10 days after the
Expiration Date, it will make this Prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale.
Alpine will not receive any proceeds from any sale of New Notes by
broker-dealers. New Notes received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the New Notes or a combination of such methods of
resale, at market rates prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Notes. Any broker-dealer
that resells New Notes that were received by it for its own account pursuant to
the Exchange Offer and any broker or dealer that participates in a distribution
of such New Notes may be deemed to be an "underwriter" within the meaning of the
Securities Acdt and any profit on any such resale of New Notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 10 days after the Expiration Date Alpine will promptly send
additional copies of this Prospectus and any amendment or supplement to this
Prospectus to any broker-dealer that requests such documents in the Letter of
Transmittal.
LEGAL MATTERS
The legality of the New Notes will be passed upon for Alpine by Proskauer
Rose Goetz & Mendelsohn LLP, New York, New York. York, New York.
EXPERTS
The consolidated financial statements of Alpine as of April 30, 1994 and
1995 and for each of the three fiscal years in the period ended April 30, 1995,
the combined financial statements of the Alcatel Business as of December 31,
1993 and 1994 and for each of the three years in the period ended December 31,
1994, which are incorporated by reference and the consolidated financial
statements of Adience as of December 31, 1994 and for the year then ended, all
of which are included in this Prospectus and elsewhere in the Registration
Statement, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto. These financial
statements are included herein or incorporated by reference in reliance upon the
authority of said firm as experts in giving said reports.
The pre-emergence consolidated financial statements of Adience for the year
ended December 31, 1992 and for the six months ended June 30, 1993, and the
post-emergence consolidated financial statements of Adience as of and for the
six months ended December 31, 1993 included in this Prospectus have been so
included in reliance on the report of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting. The post-emergence report includes an explanatory paragraph
regarding substantial doubt about Adience's ability to continue as a going
concern. Both the post-and the pre-emergence reports include an informative
paragraph regarding consummation of Adience's Plan of Reorganization and
adoption of the American Institute of Certified Public Accountants' Statement of
Position 90-7, "Financial Reporting by Entities in Reorganization under the
Bankruptcy Code."
64
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
THE ALCATEL BUSINESS
<S> <C>
UNAUDITED COMBINED FINANCIAL STATEMENTS:
Combined Balance Sheets at December 31, 1994 and March 31, 1995.................... F-2
Combined Statements of Changes in Owners' Investment for the three months ended
March 31, 1995.................................................................... F-3
Combined Statements of Operations for the three months ended March 31, 1994 and
1995.............................................................................. F-4
Combined Statements of Cash Flows for the three months ended March 31, 1994 and
1995.............................................................................. F-5
Notes to Combined Financial Statements............................................. F-6
ADIENCE
AUDITED CONSOLIDATED FINANCIAL STATEMENTS:
Reports of independent accountants................................................. F-7
Consolidated balance sheets at December 31, 1993 and 1994.......................... F-10
Consolidated statements of operations for the year ended December 31, 1994,
Post-emergence six months ended December 31, 1993,
Pre-emergence six months ended June 30, 1993 and the
Pre-emergence year ended December 31, 1992........................................ F-12
Consolidated statements of cash flows for the year ended December 31, 1994,
Post-emergence six months ended December 31, 1993,
Pre-emergence six months ended June 30, 1993 and the
Pre-emergence year ended December 31, 1992........................................ F-13
Consolidated statements of shareholders' equity (deficit) for the year
ended December 31, 1994,
Post-emergence six months ended December 31, 1993,
Pre-emergence six months ended June 30, 1993 and the
Pre-emergence year ended December 31, 1992........................................ F-14
Notes to consolidated financial statements......................................... F-15
</TABLE>
F-1
<PAGE>
THE COPPER CABLE GROUP OF ALCATEL NA CABLE SYSTEMS, INC. AND
ALCATEL CANADA WIRE AND CABLE, INC.
COMBINED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
------------ ----------
1994 1995
------------ ----------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash..................................................................... $ 3,124 $ 4,849
Trade accounts receivable, less allowance for
doubtful accounts of $457 and $457, respectively........................ 29,389 25,454
Receivables from affiliates.............................................. 1,259 (8,642)
Inventories.............................................................. 36,983 34,514
Deferred income taxes.................................................... 4,123 4,123
Other current assets..................................................... 1,861 747
------------ ----------
Total current assets................................................... 76,739 61,045
Property, plant and equipment, net......................................... 42,247 39,868
Intangible asset........................................................... 366 --
------------ ----------
$ 119,352 $ 100,913
------------ ----------
------------ ----------
LIABILITIES AND OWNERS' INVESTMENT
Current liabilities:
Trade accounts payable................................................... $ 13,577 $ 15,442
Accrued liabilities...................................................... 12,184 21,927
Income taxes payable..................................................... 271 (1,001)
Payables to affiliates................................................... 40,663 12,622
------------ ----------
Total current liabilities.............................................. 66,695 48,990
Deferred income taxes...................................................... 1,440 1,440
------------ ----------
Total liabilities...................................................... 68,135 50,430
Commitments and contingencies
Owners' investment......................................................... 51,217 50,483
------------ ----------
$ 119,352 $ 100,913
------------ ----------
------------ ----------
</TABLE>
The accompanying notes to combined financial statements
are an integral part of these balance sheets.
F-2
<PAGE>
THE COPPER CABLE GROUP OF ALCATEL NA CABLE SYSTEMS, INC. AND
ALCATEL CANADA WIRE AND CABLE, INC.
COMBINED STATEMENTS OF CHANGES IN OWNERS' INVESTMENT
FOR THE THREE MONTHS ENDED MARCH 31, 1995
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<S> <C>
Balance, December 31, 1994......................................................... $ 51,217
Net loss......................................................................... (734)
---------
Balance, March 31, 1995............................................................ $ 50,483
---------
---------
</TABLE>
The accompanying notes to combined financial statements
are an integral part of these statements.
F-3
<PAGE>
THE COPPER CABLE GROUP OF ALCATEL NA CABLE SYSTEMS, INC. AND
ALCATEL CANADA WIRE AND CABLE, INC.
COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1994 1995
--------- ---------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Net sales ...................................................................... $ 37,677 $ 54,138
Cost of goods sold ............................................................. 35,906 52,339
--------- ---------
Gross margin ............................................................... 1,771 1,799
Selling, general and administrative expenses ................................... 922 683
Management fees to affiliates .................................................. 1,201 1,275
Administrative fees to affiliates .............................................. 416 226
--------- ---------
Income (loss) from operations .............................................. (768) (385)
Interest expense to affiliates, net ............................................ 755 (495)
--------- ---------
Income (loss) before provision (benefit) for income taxes ...................... (13) (880)
Provision (benefit) for income taxes ........................................... 277 (146)
--------- ---------
Net income (loss) .............................................................. $ (290) $ (734)
--------- ---------
--------- ---------
</TABLE>
The accompanying notes to combined financial statements
are an integral part of these statements.
F-4
<PAGE>
THE COPPER CABLE GROUP OF ALCATEL NA CABLE SYSTEMS, INC. AND
ALCATEL CANADA WIRE AND CABLE, INC.
COMBINED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1994 1995
--------- ----------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Cash flows from operating activities:
Net (loss) .............................................................................. $ (290) $ (734)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
--
Depreciation .......................................................................... 1,464 1,569
Change in current assets and liabilities --
(Increase) decrease in:
Trade accounts receivable ............................................................. (422) (3,935)
Receivables (payables) from affiliates ................................................ (9,384) 17,178
Inventories ........................................................................... (2,208) (2,471)
Other current assets .................................................................. (175) 1,114
Trade accounts payable ................................................................ 754 1,865
Accrued liabilities ................................................................... 10,629 (11,254)
Income taxes payable .................................................................. 265 (1,272)
--------- ----------
Net cash provided by operating activities ........................................... 633 2,060
--------- ----------
Cash flows from investing activities:
Purchases of property, plant and equipment .............................................. (1,189) (335)
--------- ----------
Net cash used for investing activities .............................................. (1,189) (335)
--------- ----------
Net increase (decrease) in cash ........................................................... (556) 1,725
Cash, beginning of year ................................................................... 602 3,124
--------- ----------
Cash, end of period ....................................................................... $ 46 $ 4,849
--------- ----------
--------- ----------
</TABLE>
The accompanying notes to combined financial statements
are an integral part of these statements.
F-5
<PAGE>
THE COPPER CABLE GROUP OF ALCATEL NA CABLE SYSTEMS, INC. AND
ALCATEL CANADA WIRE AND CABLE, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
MARCH 31, 1995
(DOLLARS IN THOUSANDS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
A. INTERIM STATEMENTS
The unaudited financial statements furnished herein reflect all normal
recurring accruals which are, in the opinion of management, necessary for a fair
presentation of the results for the periods presented. Certain reclassifications
have been made to the statement of income for the period ended March 31, 1994 to
conform to presentations adopted in the current period. These statements should
be read in conjunction with the Combined Financial Statements for the year ended
December 31, 1994.
PRINCIPLES OF COMBINATION
The combined financial statements include the copper cable operations of ACW
which are located in Winnipeg, Manitoba, and the copper cable operations of ACS
which are located in Tarboro, North Carolina; Elizabethtown, Kentucky; Fordyce,
Arkansas and Claremont, North Carolina. The combined financial statements also
include fiber optic cable and data cable operations that are part of the ACW
facility located in Winnipeg, Manitoba. These operations are not material to
Alcatel Business's operating results as presented herein. All of these
operations are managed by ACS management. All significant intercompany accounts
and transactions have been eliminated.
2. RELATED PARTIES:
Under agreements with affiliated companies, the Alcatel Business pays
service charges, research and development assessments and other service fees
(management fees). Management fees incurred by the Alcatel Business under these
agreements totaled $1,201 and $1,275 for the three months ended March 31, 1994
and 1995.
Alcatel NA, Inc. and ACW provide legal, accounting, tax, treasury,
insurance, employee benefits, data processing, transportation and other services
to the Alcatel Business. Expenses that are directly attributable to the Alcatel
Business are charged directly to the Alcatel Business. Expenses that are not
directly attributable to a particular subsidiary or business unit of Alcatel NA,
Inc. or ACW are allocated each month to all subsidiaries and business units
receiving the services. Amounts allocated are based on a particular subsidiary
or business unit's relative percentage of net sales, payroll expenses and
average total assets to the net sales, payroll expenses and average total assets
of all the subsidiaries and business units receiving services. Administrative
fees allocated to the Alcatel Business for these services totaled $416 and $226
for the three months ended March 31, 1994 and 1995. Management believes that the
administrative fees for these services would not have been materially different
if they had been incurred directly by the Alcatel Business.
F-6
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
of Adience, Inc.:
We have audited the accompanying consolidated balance sheet of Adience, Inc. (a
Delaware corporation) as of December 31, 1994, and the related consolidated
statements of operations, shareholders' equity and cash flows for the year then
ended. We did not audit the financial statements of Information Display
Technology, Inc., which is reflected in the accompanying financial statements as
net assets of discontinued operations. The net assets of discontinued operations
represent 13.3% of total assets and the loss from discontinued operations
represents 15.0% of net loss prior to the write-down of this asset as discussed
in Note 1. The financial statements of Information Display Technology, Inc. were
audited by other auditors whose report has been furnished to us and our opinion,
insofar as it relates to the amounts included for Information Display
Technology, Inc., is based solely on the report of the other auditors. The
financial statements of Adience, Inc. for the six months ended December 31,
1993, were audited by other auditors whose report, dated March 28, 1994, except
for certain items which are as of October 12, 1994, on those statements included
an explanatory paragraph stating that those financial statements were prepared
assuming that the Company will continue as a going concern. The financial
statements of Adience, Inc. for the year ended December 31, 1992, and six months
ended June 30, 1993, were audited by other auditors whose report dated March 28,
1994, expressed an unqualified opinion on those statements. The opinion of such
auditors, however, does not cover the restatement of those statements for the
deconsolidation of Information Display Technology, Inc. as discussed in Note 1.
We have audited the adjustments described in Note 1 that were applied to restate
the December 31, 1992, June 30, 1993, and December 31, 1993, financial
statements for the deconsolidation of Information Display Technology, Inc. In
our opinion, such adjustments are appropriate and have been properly applied.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, based on our audit and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of Adience, Inc. as of December 31, 1994, and the results
of its operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
March 28, 1995
F-7
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS -- POST-EMERGENCE
CONSOLIDATED FINANCIAL STATEMENTS
To the Board of Directors and Shareholders of
Adience, Inc.
In our opinion, the consolidated balance sheet and the related consolidated
statements of operations, of cash flows, and of shareholders' equity (deficit)
as of and for the 6 months ended December 31, 1993, prior to restatement (not
presented separately herein), present fairly, in all material respects, the
financial position, results of operations and cash flows of Adience, Inc., and
its subsidiaries (Adience) as of and for the 6 months ended December 31, 1993,
in conformity with generally accepted accounting principles. These financial
statements are the responsibility of Adience's management; our responsibility is
to express an opinion on these financial statements based on our audit. We
conducted our audit of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for the opinion expressed above. We have not
audited the consolidated financial statements of Adience for any period
subsequent to December 31, 1993, nor have we examined any adjustments applied to
the 1993 financial statements.
As discussed in Note 1 to the consolidated financial statements, the Adience
Plan of Reorganization was confirmed on May 4, 1993, and was consummated on June
30, 1993. Adience has accounted for the reorganization in accordance with the
American Institute of Certified Public Accountants Statement of Position 90-7,
"Financial Reporting by Entities in Reorganization Under the Bankruptcy Code."
Accordingly, Adience's assets and liabilities as of June 30, 1993, were restated
by management, with the assistance of independent advisors, to their reorganized
value, which approximated their fair value at the date of reorganization. The
financial statements subsequent to emergence from Chapter 11 have been prepared
using a different basis of accounting and, therefore, are not comparable to the
pre-emergence consolidated financial statements.
The accompanying consolidated financial statements have been prepared assuming
Adience will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, Adience has experienced continuing losses
from operations, has not met operating and financial plans for the 9 months
ended September 30, 1994, and has significant indebtedness that raise
substantial doubt about Adience's ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
As described in Note 7, The Alpine Group, Inc., has reached agreements to
acquire a majority of the outstanding common stock and a majority of the
outstanding 11 percent Senior Secured Notes of Adience.
PRICE WATERHOUSE LLP
Pittsburgh, Pennsylvania
March 28, 1994, except for
Notes 1, 6 and 7, which are
as of October 12, 1994
F-8
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS -- PRE-EMERGENCE
CONSOLIDATED FINANCIAL STATEMENTS
To the Board of Directors and Shareholders of
Adience, Inc.
In our opinion, the consolidated statements of operations, of cash flows, and of
shareholders' equity (deficit) for the year ended December 31, 1992 and for the
6 months ended June 30, 1993, prior to restatement (not presented separately
herein) present fairly, in all material respects, the results of operations and
cash flows of Adience, Inc., and its subsidiaries (Adience) for the year ended
December 31, 1992, and for the 6 months ended June 30, 1993, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of Adience's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above. We have not
examined any adjustments applied to the 1992 and 1993 financial statements.
As discussed in Note 1 to the consolidated financial statements, the Adience
Plan of Reorganization was confirmed on May 4, 1993, and was consummated on June
30, 1993. Adience has accounted for the reorganization in accordance with the
American Institute of Certified Public Accountants Statement of Position 90-7,
"Financial Reporting by Entities in Reorganization Under the Bankruptcy Code."
Accordingly, Adience's assets and liabilities as of June 30, 1993, were restated
by management, with the assistance of independent advisors, to their reorganized
value, which approximated their fair value at the date of reorganization.
PRICE WATERHOUSE LLP
Pittsburgh, Pennsylvania
March 28, 1994
F-9
<PAGE>
ADIENCE, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF DOLLARS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1993 1994
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.......................................................... $ 554 $ 3,226
Accounts receivable, less allowance (1993 - $1,015; 1994 - $835)................... 15,593 15,462
Inventories........................................................................ 15,212 9,817
Costs and estimated earnings in excess of billings on uncompleted contracts........ 328 443
Prepaid expenses, deposits and other............................................... 1,741 1,074
Deferred income taxes.............................................................. 2,918 3,508
Net assets held for sale........................................................... -- 665
------------ ------------
Total current assets........................................................... 36,346 34,195
------------ ------------
Net assets of discontinued operations................................................ 13,982 8,030
Property, plant and equipment
Land............................................................................... 2,641 2,517
Buildings.......................................................................... 10,265 10,458
Machinery and equipment............................................................ 21,703 21,377
------------ ------------
34,609 34,352
Less allowances for depreciation............................................... 3,530 6,619
------------ ------------
31,079 27,733
Other assets......................................................................... 4,175 3,866
Reorganization value in excess of amounts allocable to identifiable assets, net...... 9,190 8,130
------------ ------------
Total assets................................................................... $ 94,772 $ 81,954
------------ ------------
------------ ------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-10
<PAGE>
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1993 1994
------------ ------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Revolving line of credit........................................................... $ 9,185 $ 12,468
Current portion of long-term obligations........................................... 759 662
Accounts payable................................................................... 8,887 9,162
Salaries, wages and withholdings................................................... 770 1,096
Payable to former shareholder...................................................... 569 494
Accrued expenses................................................................... 2,756 3,766
Accrued interest................................................................... 225 2,515
Billings in excess of costs and estimated earnings on uncompleted contracts........ 150 66
Accrued workers' compensation...................................................... 5,980 5,199
Accrued income taxes............................................................... 1,569 1,578
Deferred income taxes.............................................................. 66 23
------------ ------------
Total current liabilities...................................................... 30,916 37,029
------------ ------------
Payable to affiliate................................................................. 861 3,683
Payable to former shareholder........................................................ 3,189 1,562
Long-term obligations................................................................ 46,211 46,450
Deferred income taxes................................................................ 4,086 4,713
Shareholders' equity (deficit):
Common stock, $.01 par value; authorized 20,000,000 shares; issued and outstanding
10,000,000 shares in 1993; 10,100,000 shares in 1994.............................. 100 101
Additional paid-in capital........................................................... 23,900 23,974
Retained deficit..................................................................... (14,367) (35,142)
Foreign currency translation......................................................... (124) (416)
------------ ------------
Total shareholders' equity (deficit)........................................... 9,509 (11,483)
------------ ------------
Total liabilities and shareholders' equity (deficit)........................... $ 94,772 $ 81,954
------------ ------------
------------ ------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-11
<PAGE>
ADIENCE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
POST-EMERGENCE
PRE-EMERGENCE ----------------------------
---------------------------- SIX MONTHS
YEAR ENDED SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, ENDED JUNE DECEMBER 31, DECEMBER 31,
1992 30, 1993 1993 1994
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net revenues........................................... $ 97,276 $ 44,431 $ 54,572 $ 96,273
Costs and expenses:
Cost of revenues..................................... 81,262 35,928 47,779 84,468
Selling, general and administrative.................. 22,829 10,510 9,302 18,180
Amortization of intangible asset..................... -- -- 9,011 1,053
------------- ------------- ------------- -------------
104,091 46,438 66,092 103,701
------------- ------------- ------------- -------------
Operating loss......................................... (6,815) (2,007) (11,520) (7,428)
Other income (expense):
Interest and other income (expense).................. (17) 245 615 574
Interest expense..................................... (13,302) (2,271) (3,781) (7,653)
------------- ------------- ------------- -------------
(13,319) (2,026) (3,166) (7,079)
------------- ------------- ------------- -------------
Loss from continuing operations before reorganization
items, income taxes and extraordinary item............ (20,134) (4,033) (14,686) (14,507)
Reorganization items:
Professional fees.................................... (950) (102) (746) --
Write-off of unamortized debt discount............... -- (455) -- --
Write-off of unamortized loan origination fees....... -- (2,065) -- --
Adjust accounts to fair value........................ -- 23,165 -- --
Other................................................ (4,848) -- -- --
------------- ------------- ------------- -------------
(5,798) 20,543 (746) --
------------- ------------- ------------- -------------
(Loss) income from continuing operations before income
taxes and extraordinary item.......................... (25,932) 16,510 (15,432) (14,507)
Income taxes (benefit)................................. (1,031) 260 (808) 319
------------- ------------- ------------- -------------
(Loss) income from continuing operations before
extraordinary item.................................... (24,901) 16,250 (14,624) (14,826)
Discontinued operations:
(Loss) income from discontinued operations (net of
taxes (benefits) of $(40), $1, $286, and $900)...... (983) 2 341 (2,610)
Loss on disposal of discontinued operations (net of
taxes (benefits) of $(791), $0, $0, and $0)......... (3,973) (400) (84) (3,339)
------------- ------------- ------------- -------------
(4,956) (398) 257 (5,949)
------------- ------------- ------------- -------------
(Loss) income before extraordinary item................ (29,857) 15,852 (14,367) (20,775)
Extraordinary item -- gain on discharge of debt........ -- 17,480 -- --
------------- ------------- ------------- -------------
Net (loss) income...................................... $ (29,857) $ 33,332 $ (14,367) $ (20,775)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Earnings per common share:
Loss from continuing operations...................... * * $ (1.46) $ (1.48)
(Loss) income from discontinued operations........... * * 0.02 (0.59)
Extraordinary item................................... * * -- --
------------- ------------- ------------- -------------
Net loss per common share.............................. * * $ (1.44) $ (2.07)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Average common shares outstanding...................... * * 10,000 10,054
</TABLE>
------------------------
* Earnings per common share are not meaningful prior to June 30, 1993 due to the
reorganization - see Note 1.
The accompanying notes are an integral part of these consolidated financial
statements.
F-12
<PAGE>
ADIENCE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
POST-EMERGENCE
PRE-EMERGENCE ----------------------------
---------------------------- SIX MONTHS
YEAR ENDED SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, ENDED JUNE DECEMBER 31, DECEMBER 31,
1992 30, 1993 1993 1994
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net (loss) income...................................... $ (29,857) $ 33,332 $ (14,367) $ (20,775)
Non-cash expenses and revenues included in net (loss)
income:
Depreciation and amortization........................ 5,660 1,675 11,242 6,050
Deferred income taxes................................ (2,040) -- (1,078) (6)
Provision for doubtful accounts...................... 1,880 413 360 271
Loss (income) from discontinued operations........... (345) 2 (341) 2,610
Loss on disposal of discontinued operations.......... 4,764 400 84 3,339
Loss on sale of divisions............................ -- -- 220 --
(Gain) loss on disposal of property, plant and
equipment........................................... 254 23 (170) (46)
Net assets held for sale write-down.................. -- -- -- 1,009
Inventory write-down................................. -- -- -- 1,788
Changes in operating assets and liabilities excluding
effects from disposals:
Short-term investments............................... 2,037 (4) 258 --
Accounts receivable.................................. 6,526 (2,099) 1,749 311
Inventories.......................................... 376 515 451 3,607
Costs and estimated earnings in excess of billings on
uncompleted contracts............................... 1,333 (829) 1,032 (115)
Income tax receivable................................ (282) 2,742 288 --
Prepaid expenses, deposits and other................. 608 213 244 667
Accounts payable, salaries, wages and withholdings,
accrued expenses, workers' compensation and payable
to former shareholder............................... 7,090 3,299 (1,554) 1,418
Billings in excess of costs and estimated earnings on
uncompleted contracts............................... (575) 601 (522) (84)
Accrued income taxes................................. -- 1,549 20 9
Payable to affiliate................................. 3,916 414 (947) 2,822
Other................................................ (1,074) 514 -- (387)
Operating cash flows from reorganization items:
Write-off of unamortized debt discount and loan
origination fees.................................... -- 2,520 -- --
Adjust accounts to fair value........................ -- (23,165) -- --
Extraordinary gain on discharge of debt.............. -- (17,480) -- --
Other................................................ 5,798 -- -- --
------------- ------------- ------------- -------------
Net cash provided (used) by operating activities....... 6,069 4,635 (3,031) 2,488
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment.............. (1,898) (635) (894) (2,278)
Proceeds from sale of property, plant and equipment.... -- -- 237 --
Proceeds from sale of divisions........................ 2,406 -- 244 --
Deferred computer costs................................ (554) (256) (765) (476)
------------- ------------- ------------- -------------
Net cash used by investing activities.................. (46) (891) (1,178) (2,754)
CASH FLOW FROM FINANCING ACTIVITIES
Net borrowings (payments) on revolving line of
credit................................................ (6,061) (4,409) 5,087 3,283
Principal payments on long-term obligations............ (867) (369) (324) (345)
------------- ------------- ------------- -------------
Net cash provided (used) by financing activities....... (6,928) (4,778) 4,763 2,938
------------- ------------- ------------- -------------
Net increase (decrease) in cash and cash equivalents... (905) (1,034) 554 2,672
Cash and cash equivalents at beginning of period....... 1,939 1,034 0 554
------------- ------------- ------------- -------------
Cash and cash equivalents at end of period............. $ 1,034 $ 0 $ 554 $ 3,226
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Supplemental cash flow information:
Cash paid for interest............................... $ 2,973 $ 585 $ 2,977 $ 4,564
Cash paid for income taxes........................... $ 831 $ 14 $ 211 $ 327
</TABLE>
See Note 1 for significant non-cash transactions not reflected above.
The accompanying notes are an integral part of these consolidated financial
statements.
F-13
<PAGE>
ADIENCE, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
TOTAL
RETAINED FOREIGN SHAREHOLDERS'
COMMON ADDITIONAL EARNINGS CURRENCY TREASURY EQUITY
STOCK PAID-IN CAPITAL (DEFICIT) TRANSLATION STOCK ESOP (DEFICIT)
------ --------------- --------- ----------- -------- ------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1992................. $ 300 $ -- $ (3,475) $ 584 $ (396) $(2,151) $ (5,138)
Net loss................................. -- -- (29,857) -- -- -- (29,857)
Prepaid contribution to ESOP............. -- -- -- -- -- 818 818
Foreign currency translation
adjustment.............................. -- -- -- (500) -- -- (500)
------ ------- --------- ----- -------- ------ -------------
Balance at December 31, 1992............... 300 -- (33,332) 84 (396) (1,333) (34,677)
Net loss -- pre-emergence................ -- -- (7,313) -- -- -- (7,313)
Prepaid contribution to ESOP............. -- -- -- -- -- 470 470
Foreign currency translation
adjustment.............................. -- -- -- (44) -- -- (44)
------ ------- --------- ----- -------- ------ -------------
Balance at June 30, 1993 --
pre-emergence........................... 300 -- (40,645) 40 (396) (863) (41,564)
Adjustments for reorganization:
Extraordinary gain on discharge of
debt.................................. 55 13,145 17,480 -- -- -- 30,680
Fresh start reporting adjustments...... -- 10,896 23,165 -- 396 863 35,320
Issuance of New Common Stock........... (255) (141) -- -- -- -- (396)
------ ------- --------- ----- -------- ------ -------------
Balance at June 30, 1993 --
post-emergence............................ 100 23,900 -- 40 -- -- 24,040
Net loss................................. -- -- (14,367) -- -- -- (14,367)
Foreign currency translation
adjustment.............................. -- -- -- (164) -- -- (164)
------ ------- --------- ----- -------- ------ -------------
Balance at December 31, 1993............... 100 23,900 (14,367) (124) -- -- 9,509
Net loss................................. -- -- (20,775) -- -- -- (20,775)
Issuance of common stock................. 1 74 -- -- -- -- 75
Foreign currency translation
adjustment.............................. -- -- -- (292) -- -- (292)
------ ------- --------- ----- -------- ------ -------------
Balance at December 31, 1994............... $ 101 $ 23,974 $(35,142) $ (416) $ -- $ -- $ (11,483)
------ ------- --------- ----- -------- ------ -------------
------ ------- --------- ----- -------- ------ -------------
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
F-14
<PAGE>
ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1994
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA, UNLESS OTHERWISE NOTED)
1. BASIS OF PRESENTATION AND COMPANY REORGANIZATION
On December 21, 1994, The Alpine Group, Inc. ("Alpine") acquired
approximately 82% of the outstanding common stock, par value $.01 per share
("Adience Common Stock"), of Adience, Inc. ("Adience") from certain stockholders
of Adience. Together with the approximately 4.9% of such shares already owned by
Alpine, Alpine increased its ownership to approximately 86.9% of the outstanding
shares of Adience Common Stock.
As of December 21, 1994 Alpine and Information Display Technology, Inc.
("IDT"), a majority-owned subsidiary of Adience, entered into an Agreement and
Plan of Merger, which provides for the merger of Alpine's information display
group (a business segment of Alpine), comprised of Alpine/PolyVision, Inc.
("APV") and Posterloid Corporation ("Posterloid"), with and into two separate
wholly-owned subsidiaries of IDT formed for the purpose of acquiring APV and
Posterloid. Subsequent to the merger, Alpine intends to distribute a majority of
its ownership in the information display group, consisting of IDT, APV and
Posterloid to its stockholders. The distribution is expected to be completed in
the next six months. As a result of the planned distribution, Adience's
consolidated financial statements and notes thereto have been reclassified to
reflect the operations of IDT as discontinued for the fiscal year ended December
31, 1992, the six months ended June 30 and December 31, 1993 and the fiscal year
ended December 31, 1994. The investment in IDT has been reflected as "Net assets
of discontinued operations." The results of operations for IDT are presented in
the Consolidated Statements of Operations under the caption "Loss from
discontinued operations" (see Note 9).
The accompanying consolidated financial statements of Adience do not reflect
any adjustments related to the allocation of the Alpine purchase price to assets
and liabilities based upon their estimated fair values as of the date of
acquisition, except for the writedown of the investment in IDT.
Adience has experienced continued losses from continuing operations (before
reorganization items) both pre- and post-emergence under Chapter 11. The
continued viability of Adience is dependent upon, among other factors, the
ability to generate sufficient cash from operations, financing, or other sources
that will meet ongoing obligations over a sustained period. Management has
formulated the outline of a strategic plan with the following objectives:
streamline manufacturing operations, eliminate duplicative costs, discontinue
unprofitable product lines, improve marketing efforts and develop and introduce
new products. Management believes that the successful implementation of this
plan will enable Adience to continue as a going concern for a reasonable period.
In addition, in conjunction with the acquisition of Adience by Alpine, Alpine
has committed to provide Adience up to $3 million for the twelve months ended
December 31, 1995, to achieve its strategic plan. There can be no assurance
however, that such activities will achieve the intended improvement in results
of operations or financial position.
A Prepackaged Plan of Reorganization under Chapter 11 of the Bankruptcy Code
(the "Prepackaged Plan") was filed by Adience and the Unofficial Committee of
Noteholders of Adience on February 22, 1993. The Prepackaged Plan was confirmed
by the United States Bankruptcy Court for the Western District of Pennsylvania
on May 4, 1993 and consummated on June 30, 1993.
The Prepackaged Plan provided for a restructuring of Adience's capital
structure and allowed the holders of $66 million aggregate principal amount of
Adience's 15% Senior Subordinated Reset Notes ("Old Reset Notes") to exchange
them for $49 million aggregate principal amount of new 11% Senior Secured Notes
("New Secured Notes") due June 15, 2002, plus common stock representing 55% of
the outstanding common stock of Adience. The Prepackaged Plan included
forgiveness of accrued interest totaling approximately $8.8 million. The value
of the cash and securities distributed was $17.5 million less than the allowed
claims with the resultant gain recorded as an extraordinary gain.
F-15
<PAGE>
ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA, UNLESS OTHERWISE NOTED)
Neither Adience Canada, Inc. ("Adience Canada"), a wholly-owned subsidiary,
or IDT, a majority-owned subsidiary of Adience, guarantee the new 11% Notes
issued by Adience under the reorganization plan. The new Notes are secured by a
lien on all the assets of Adience, including the stock of IDT.
Adience Canada and IDT did not file plans of reorganization.
The sum of allowed claims plus post petition liabilities exceeded the
reorganization value of the assets of Adience immediately before the date of
consummation. Also, Adience experienced a change in control as
pre-reorganization holders of common stock received less than 50% of the new
common stock issued pursuant to the Prepackaged Plan. AICPA SOP 90-7, Financial
Reporting by Entities in Reorganization under the Bankruptcy Code ("SOP 90-7"),
requires that under these circumstances, a new reporting entity is created and
assets and liabilities should be recorded at their fair values. This accounting
treatment is referred to as "fresh start reporting". Adience's basis of
accounting for financial reporting purposes changed on June 30, 1993 as a result
of applying SOP 90-7. Specifically, application of SOP 90-7 required the
adjustment of Adience's assets and liabilities to reflect a reorganization value
generally approximating the fair value of Adience as a going concern on an
unleveraged basis, the elimination of its retained deficit, and adjustments to
its capital structure to reflect consummation of the Prepackaged Plan. Fresh
start reporting was not adopted by Adience Canada or IDT.
Adience applied SOP 90-7 in preparing its consolidated balance sheet as of
June 30, 1993. The balance sheet became the opening balance sheet for Adience,
Inc., as reorganized, on July 1, 1993. The consolidated statements of operations
and cash flows after June 30, 1993 are not comparable to the respective
financial statements prior to such date, and the consolidated results of
operations for the six months ended June 30, 1993 and the six months ended
December 31, 1993 have therefore not been aggregated.
Reorganization value at the June 30, 1993 consummation date was determined
by management with the assistance of independent advisors. The methodology
employed involved estimation of enterprise value (i.e., the market value of
Adience's debt and shareholders' equity), taking into account a discounted cash
flow analysis, as well as the capitalization of earnings and cash flow
approaches. The discounted cash flow analysis was based on five-year cash flow
projections prepared by management.
The five-year cash flow projections were based on estimates and assumptions
about circumstances and events that have not yet taken place. Such estimates and
assumptions are inherently subject to significant economic and competitive
uncertainties and contingencies beyond the control of the corporation,
including, but not limited to, those with respect to the future course of
Adience's business activity. Accordingly, there will usually be differences
between projections and actual results because events and circumstances
frequently do not occur as expected; and those differences may be material. The
assumptions included: a rate of sales growth of approximately 2.5% per annum in
excess of the anticipated rate of inflation; an increase in selling, general and
administrative expenses, after adjustment for non-recurring items, in line with
the rate of sales growth; operating profit margins for each of the five years
being approximately equal to one half of the average annual operating profit
margins achieved during the most recent profitable period of 1988-1990; and
effective tax rates of 33%.
F-16
<PAGE>
ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA, UNLESS OTHERWISE NOTED)
At June 30, 1993, the adjustment to record confirmation of the plan of $23
million was allocated to assets and liabilities as follows:
<TABLE>
<S> <C>
Inventories....................................................... $ 1,287
Property, plant and equipment..................................... 19,448
Reorganization value in excess of amounts allocable to
identifiable assets.............................................. 18,329
Intangible assets................................................. (3,032)
Deferred income taxes............................................. (1,108)
Additional paid-in capital........................................ (10,896)
Prepaid contribution to employee stock ownership plan............. (863)
---------
$ 23,165
---------
---------
</TABLE>
Current assets and liabilities were recorded at fair value. Property, plant
and equipment was recorded at reorganization value, which approximated fair
value in continued use, based on an independent appraisal. In addition, under
SOP 90-7, the long-term debt was recorded at present values on June 30, 1993.
The resulting unamortized discount is being accreted to interest expense over
the term of the Adience Senior Notes (See Note 7).
Based on the allocation of equity value in conformity with SOP 90-7, the
portion of the equity value which was not attributed to specific tangible or
identifiable intangible assets of reorganized Adience of $18,329 was reported as
"reorganization value in excess of amounts allocable to identifiable assets".
This value was initially being amortized on a straight line basis in equal
annual amounts over 9 years. On a quarterly basis, management evaluates the
recoverability of the unamortized portion of the reorganization value in excess
of amounts allocable to identifiable assets by comparing actual cash flows with
the projected cash flows used to arrive at the reorganization value. When and if
a material difference exists, management will reevaluate whether the assumptions
made in the preparation of the projected cash flows are still reasonable. If
management is of the opinion that new projected cash flows are required and that
a permanent impairment of the remaining reorganization value has occurred, a
reduction of some or all of the unamortized value is immediately recognized.
In the fourth quarter of 1993, Adience recorded a charge of $8 million to
reduce the recorded reorganization value in excess of amounts allocable to
identifiable assets based on management's comparison of actual cash flows
post-emergence through December 31, 1993, with the projected cash flows used to
arrive at the reorganization value. This comparison resulted in the preparation
of new cash flow projections, which in turn led Adience to the conclusion that
permanent impairment of the reorganization value had occurred and that an
immediate reduction of approximately 50% of the remaining unamortized value
should be recognized. This special charge increased the net loss for the six
months ended December 31, 1993 by $8 million or $.80 per share. No further
reduction to the reorganization value in excess of amounts allocable to
identifiable assets was deemed necessary during 1994. At December 31, 1993 and
1994, accumulated amortization was approximately $9,011 and $10,064,
respectively.
F-17
<PAGE>
ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA, UNLESS OTHERWISE NOTED)
The effect of the plan of reorganization and the adoption of the provisions
of SOP 90-7 in Adience's consolidated balance sheet as of June 30, 1993 was as
follows:
ADIENCE, INC.
CONSOLIDATING BALANCE SHEET
AS OF JUNE 30, 1993
UNAUDITED
<TABLE>
<CAPTION>
ADJUSTMENTS TO RECORD CONFIRMATION OF THE PLAN
ADIENCE, INC. ----------------------------------------------
(DEBTOR-IN-POSSESSION) DR(CR)
PRE-CONFIRMATION DEBT EXCHANGE
BALANCE SHEET DISCHARGE OF STOCK FRESH START
-------------------- --------- -------- -----------------
<S> <C> <C> <C> <C>
Assets
Current Assets:
Cash and cash equivalents.................. $(2,219)
Short-term investments (certificate of
deposit).................................. 258
Accounts receivable, less allowance
(1993-$1,592)............................. 14,111
Intercompany accounts receivable
(payable)................................. (2,631)
Inventories................................ 13,879 $ 1,287(3)
Costs and estimated earnings in excess of
billings on uncompleted contracts......... 1,101
Income tax receivable...................... 0
Prepaid expenses, deposits and other....... 1,038 (80)(3)
Deferred income taxes...................... (921) 1,359(3)
------- --------- -------- --------
Total current assets..................... 24,616 2,566
------- --------- -------- --------
Net assets held for disposition..............
Deferred income taxes........................ (222)
Investment in subsidiaries................... 19,118
Property, plant and equipment
Land....................................... 823 1,730
Buildings.................................. 7,120 2,730
Machinery and equipment.................... 8,954 10,082
------- --------- -------- --------
16,897 14,542
Less allowances for depreciation........... 4,906 4,906
------- --------- -------- --------
11,991 19,448(3)
Other assets................................. 7,020 (2,952)(3)
Reorganization value in excess of amounts
allocable to identifiable assets............ 0 18,329(3)
------- --------- -------- --------
Total assets............................. $62,523 $ 37,391
------- --------- -------- --------
------- --------- -------- --------
<CAPTION>
ADIENCE,
INC.
REORGANIZED CONSOLIDATED
BALANCE ADIENCE ELIMIN ADIENCE, INC.
SHEET CANADA DR(CR) CONSOLIDATED
---------- -------- ----------- --------------
<S> <C> <C> <C> <C>
Assets
Current Assets:
Cash and cash equivalents.................. $(2,219) $ 35 $ 2,184 $ 0
Short-term investments (certificate of
deposit).................................. 258 258
Accounts receivable, less allowance
(1993-$1,592)............................. 14,111 2,949 17,060
Intercompany accounts receivable
(payable)................................. (2,631) 827 1,804 0
Inventories................................ 15,166 932 16,098
Costs and estimated earnings in excess of
billings on uncompleted contracts......... 1,101 259 1,360
Income tax receivable...................... 0 223 223
Prepaid expenses, deposits and other....... 958 411 4 1,373
Deferred income taxes...................... 438 0 438
---------- -------- ----------- --------------
Total current assets..................... 27,182 5,636 3,992 36,810
---------- -------- ----------- --------------
Net assets held for disposition.............. 11,833 11,833
Deferred income taxes........................ (222) 2 220 0
Investment in subsidiaries................... 19,118 (19,118) 0
Property, plant and equipment
Land....................................... 2,553 55 2,608
Buildings.................................. 9,850 629 10,479
Machinery and equipment.................... 19,036 1,931 20,967
---------- -------- ----------- --------------
31,439 2,615 34,054
Less allowances for depreciation........... 0 1,775 1,775
---------- -------- ----------- --------------
31,439 840 32,279
Other assets................................. 4,068 720 4,788
Reorganization value in excess of amounts
allocable to identifiable assets............ 18,329 18,329
---------- -------- ----------- --------------
Total assets............................. $99,914 $7,198 $ (3,073) $104,039
---------- -------- ----------- --------------
---------- -------- ----------- --------------
</TABLE>
F-18
<PAGE>
ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA, UNLESS OTHERWISE NOTED)
ADIENCE, INC.
CONSOLIDATING BALANCE SHEET
AS OF JUNE 30, 1993
UNAUDITED
<TABLE>
<CAPTION>
ADJUSTMENTS TO RECORD CONFIRMATION OF THE PLAN
ADIENCE, INC. ------------------------------------------------
PRE-CONFIRMATION DR(CR)
(DEBTOR-IN-POSSESSION) DEBT EXCHANGE
BALANCE SHEET DISCHARGE OF STOCK FRESH START
-------------- --------- --------- ----------
<S> <C> <C> <C> <C>
Liabilities and shareholders' equity (deficit)
Liabilities not subject to compromise:
Current liabilities:
Revolving lines of credit..................... $ 1,914
Current portion of long term obligations...... 834
Accounts payable.............................. 6,759
Salaries, wages and withholdings.............. 583
Payable to former shareholder................. 553
Accrued expenses.............................. 2,945 $ 450 (1)
Billings in excess of costs and estimated
earnings on uncompleted contracts............ 321
Accrued workers' compensation................. 6,076
Accrued interest.............................. 0 (2,924 )(1)
Income tax payable............................ 1,549
Deferred income taxes......................... 0
------- --------- --------- --------
Total current liabilities................... 21,534 (2,474 )
Payable to former shareholder................... 3,291
Long term obligations........................... 1,531
Deferred income taxes........................... (2) $ (2,467)(3)
Liabilities subject to compromise:
Old Senior Subordinated Reset Notes........... 65,975 65,975 (1)
Accrued interest.............................. 11,758 11,758 (1)
New Senior Secured Notes...................... 0 (44,579 )(1)
Shareholders' equity (deficit):
Old common stock, $.015 par value; authorized
20,000,000 shares; issued 13,400,000
shares....................................... 300 $ 300 (2)
New common stock, $.01 par value; authorized
20,000,000 shares; issued and outstanding
10,000,000 shares............................ 0 (55 )(1) (45 )(2)
Additional paid in capital.................... 0 (13,145 )(1) 141 (2) (10,896)(3)
Retained (deficit) earnings................... (40,689) (17,480 )(1) (23,165)(3)
Foreign currency translation.................. 84
------- --------- --------- --------
(40,305) (30,680 ) 396 (34,061)
Less:
3,400,000 shares of common stock in treasury,
at cost...................................... (396) (396 )(2)
Prepaid contribution to employee stock
ownership plan (ESOP)........................ (863) (863)(3)
------- --------- --------- --------
Total shareholders' equity (deficit)........ (41,564) (30,680 ) 0 (34,924)
------- --------- --------- --------
Total liabilities and shareholders' equity
(deficit).................................. $62,523 $ 0 $ 0 $ (37,391)
------- --------- --------- --------
------- --------- --------- --------
<CAPTION>
ADIENCE, INC. CONSOLIDATED
REORGANIZED ADIENCE ELIMIN ADIENCE, INC.
BALANCE SHEET CANADA DR(CR) CONSOLIDATED
-------------- --------- ---------- --------------
<S> <C> <C> <C> <C>
Liabilities and shareholders' equity (deficit)
Liabilities not subject to compromise:
Current liabilities:
Revolving lines of credit..................... $ 1,914 $ $(2,184) $ 4,098
Current portion of long term obligations...... 834 834
Accounts payable.............................. 6,759 837 7,596
Salaries, wages and withholdings.............. 583 98 681
Payable to former shareholder................. 553 553
Accrued expenses.............................. 2,495 370 2,865
Billings in excess of costs and estimated
earnings on uncompleted contracts............ 321 351 672
Accrued workers' compensation................. 6,076 6,076
Accrued interest.............................. 2,924 2,924
Income tax payable............................ 1,549 1,549
Deferred income taxes......................... 0 51 51
------- --------- ---------- --------------
Total current liabilities................... 24,008 1,707 (2,184) 27,899
Payable to former shareholder................... 3,291 3,291
Long term obligations........................... 1,531 1,531
Deferred income taxes........................... 2,465 14 (220) 2,699
Liabilities subject to compromise:
Old Senior Subordinated Reset Notes........... 0 0
Accrued interest.............................. 0 0
New Senior Secured Notes...................... 44,579 44,579
Shareholders' equity (deficit):
Old common stock, $.015 par value; authorized
20,000,000 shares; issued 13,400,000
shares....................................... 0 10 10 0
New common stock, $.01 par value; authorized
20,000,000 shares; issued and outstanding
10,000,000 shares............................ 100 100
Additional paid in capital.................... 23,900 23,900
Retained (deficit) earnings................... (44) 5,467 5,423 0
Foreign currency translation.................. 84 44 40
------- --------- ---------- --------------
24,040 5,477 5,477 24,040
Less:
3,400,000 shares of common stock in treasury,
at cost...................................... 0 0
Prepaid contribution to employee stock
ownership plan (ESOP)........................ 0 0
------- --------- ---------- --------------
Total shareholders' equity (deficit)........ 24,040 5,477 5,477 24,040
------- --------- ---------- --------------
Total liabilities and shareholders' equity
(deficit).................................. $ 99,914 $7,198 $ 3,073 $104,039
------- --------- ---------- --------------
------- --------- ---------- --------------
</TABLE>
F-19
<PAGE>
ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA, UNLESS OTHERWISE NOTED)
The following entries record the provisions of the Plan and the adoption of
fresh start reporting:
<TABLE>
<CAPTION>
DEBIT CREDIT
--------- -----------
<C> <S> <C> <C>
(1) RECORD DEBT DISCHARGE:
Accrued expenses......................................................................... 450
Liabilities subject to compromise:
Old Senior Subordinated Reset Notes.................................................... 65,975
Accrued interest....................................................................... 11,758
Discount on New Senior Secured Notes..................................................... 4,500
New Senior Secured Notes............................................................... 49,079
Accrued interest....................................................................... 2,924
New common stock....................................................................... 55
Additional paid-in capital............................................................. 13,145
Gain on debt discharge................................................................. 17,480
(2) RECORD EXCHANGE OF STOCK FOR STOCK:
Old common stock......................................................................... 300
Additional paid-in capital............................................................... 141
New common stock....................................................................... 45
Treasury stock......................................................................... 396
(3) RECORD ASSETS AND LIABILITIES AT FAIR VALUE UNDER FRESH START REPORTING AND ELIMINATE
RETAINED DEFICIT:
Inventories.............................................................................. 1,287
Deferred income taxes.................................................................... 1,359
Property, plant and equipment............................................................ 19,448
Reorganization value in excess of amounts allocable to identifiable assets............... 18,329
Prepaid expenses, deposits and other................................................... 80
Other assets........................................................................... 2,952
Deferred income taxes.................................................................. 2,467
Retained deficit....................................................................... 23,165
Additional paid-in capital............................................................. 10,896
Prepaid ESOP contribution.............................................................. 863
</TABLE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CONSOLIDATION
The consolidated financial statements include the accounts of Adience and
Adience Canada. All material intercompany accounts and transactions have been
eliminated from the consolidated financial statements.
The accounts of IDT are included in the consolidated balance sheets under
the caption "Net assets of discontinued operations." The intercompany payable to
IDT is separately disclosed in the accompanying balance sheets since the right
of offset does not exist between the companies (see Note 1).
CASH FLOW REPORTING
Cash and cash equivalents include all highly liquid investments with a
maturity of three months or less.
F-20
<PAGE>
ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA, UNLESS OTHERWISE NOTED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVENTORIES
Inventories are stated at the lower of cost or market with cost determined
on the first-in, first-out (FIFO) or average cost method. Inventories consist
primarily of raw materials of $4,474 and $3,197, work-in-process of $2,088 and
$1,643 and finished goods of $8,650 and $4,977 at December 31, 1993 and 1994,
respectively.
REVENUE RECOGNITION
Approximately 48% of 1992, 34% of the six months ended June 30, 1993, 51% of
the six months ended December 31, 1993 and 42% of 1994 revenues were recorded on
the percentage of completion method of accounting, measured on the basis of
costs incurred to estimated total costs which approximates contract performance
to date. Provisions for losses on uncompleted contracts are made if it is
determined that a contract will ultimately result in a loss.
Substantially all remaining revenue is comprised of direct product shipments
to customers and short duration refractory material sales, installation and
maintenance work, which are recorded as revenue when shipped and/or installed.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment was stated at cost. In conjunction with the
adoption of fresh start reporting, all property, plant and equipment was
adjusted to reflect reorganization value, which approximates fair value in
continued use, based on an independent appraisal. Improvements to existing
equipment that materially extend the life of properties are capitalized as
incurred.
Expenditures for normal maintenance and repairs are charged to expense as
incurred and amounted to $4,174 in 1992, $2,010 for the six months ended June
30, 1993, $2,292 for the six months ended December 31, 1993 and $4,139 in 1994.
Depreciation expense is computed using the straight-line method based upon the
estimated useful lives of the respective assets. Amortization of assets under
capital leases is included in depreciation expense.
GOODWILL
Goodwill resulting from acquisitions accounted for on the purchase method of
accounting, was being amortized over 15 to 40 years on the straight-line method.
Goodwill relating to domestic acquisitions was written off in conjunction with
fresh start reporting. Remaining goodwill will be amortized over 15 years.
REORGANIZATION VALUE IN EXCESS OF AMOUNTS ALLOCABLE TO IDENTIFIABLE ASSETS
Reorganization value in excess of amounts allocable to identifiable assets
is amortized on a straight-line basis over its estimated useful life (see Note
1).
INCOME TAXES
Deferred income taxes are recorded to reflect certain items of income and
expense recognized in different periods for financial reporting and tax
purposes. Adience accounts for income taxes in accordance with the liability
method.
In 1992, Adience adopted Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes" (SFAS No. 109), which requires an asset and
liability approach in accounting for income taxes. Prior to 1992, Adience
applied the provisions of SFAS No. 96. There was no cumulative effect for this
change in accounting principle as of January 1, 1992. However, as of December
31, 1993 and December 31, 1994, a deferred asset was recognized and an
offsetting valuation reserve has been established for carryforwards not meeting
the "more likely than not" criterion under SFAS No. 109.
F-21
<PAGE>
ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA, UNLESS OTHERWISE NOTED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FINANCIAL INSTRUMENTS
The fair values of financial instruments approximate their recorded values
as of December 31, 1993 and 1994.
CONCENTRATIONS OF CREDIT RISK
Adience's products are sold and revenues are derived from companies in
diversified industries. Credit is extended to customers based upon an evaluation
of the customers' financial condition and generally collateral is not required.
At December 31, 1993 and December 31, 1994, accounts receivable from customers
in the steel and steel-related industries total approximately $9,548 and $9,054,
respectively. Credit losses relating to customers in the steel and steel-related
industries have been within management's expectations.
RECLASSIFICATIONS
Certain items in the December 31, 1992, June 30, 1993 and December 31, 1993
financial statements have been reclassified and restated to conform with changes
in classification adopted and required in 1994.
EARNINGS PER COMMON SHARE
Earnings per common share is computed by dividing income or loss by the
weighted average number of shares outstanding. Earnings per share for
pre-emergence periods is not presented since such information is not comparable
with post-emergence earnings per share.
F-22
<PAGE>
ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA, UNLESS OTHERWISE NOTED)
3. PRO FORMA RESULTS OF OPERATIONS (UNAUDITED)
The following consolidating pro forma statement of operations reflects the
financial results of Adience as if the reorganization had been effective January
1, 1993:
ADIENCE, INC.
CONSOLIDATING PRO FORMA STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
ADIENCE
PRO FORMA PRO FORMA
PRO FORMA ADJUSTMENTS INCOME ADIENCE ADIENCE, INC.
ADIENCE -------------------------- STATEMENT CANADA CONSOLIDATED
12/31/93 DEBIT CREDIT 12/31/93 12/31/93 12/31/93
---------- ------------ ------------ ---------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net revenues.................... $ 85,833 $ 85,833 $ 13,170 $ 99,003
Costs and expenses:
Cost of revenues.............. 73,720 $ 571(1) 74,291 9,987 84,278
Selling, general and
administrative............... 17,184 $ 145(1) 17,039 2,628 19,667
Amortization of intangible
asset........................ 9,011 9,011 9,011
---------- ------------ ------ ---------- ----------- --------
99,915 571 145 100,341 12,615 112,956
---------- ------------ ------ ---------- ----------- --------
Operating (loss) profit......... (14,082) (14,508) 555 (13,953)
Other income (expense):
Interest and other income..... 770 770 90 860
Interest expense.............. (6,051) 1,297(2) (7,348) (1) (7,349)
---------- ------------ ------ ---------- ----------- --------
(5,281) 1,297 0 (6,578) 89 (6,489)
---------- ------------ ------ ---------- ----------- --------
(Loss) income from continuing
operations before
reorganization items and income
taxes.......................... (19,363) (21,086) 644 (20,442)
Reorganization items:
Professional fees............. (848) 848(3) 0 0
Write-off of unamortized debt
discount..................... (455) 455(3) 0 0
Write-off of unamortized loan
fees......................... (2,065) 2,065(3) 0 0
Adjust accounts to fair
value........................ 23,165 23,165(3) 0 0
---------- ------------ ------ ---------- ----------- --------
19,797 23,165 3,368 0 0 0
---------- ------------ ------ ---------- ----------- --------
Income (loss) from continuing
operations before income
taxes.......................... 434 (21,086) 644 (20,442)
Income taxes (benefit).......... (926) (926) 378 (548)
---------- ------------ ------ ---------- ----------- --------
Income (loss) from continuing
operations..................... $ 1,360 $ 25,033 $ 3,513 $ (20,160) $ 266 $ (19,894)
---------- ------------ ------ ---------- ----------- --------
---------- ------------ ------ ---------- ----------- --------
<FN>
------------------------
(1) Reflects a six month impact of additional depreciation expense resulting
from the write-up of property, plant and equipment and the reduction of
goodwill amortization which was written off in conjunction with fresh start
reporting.
</TABLE>
F-23
<PAGE>
ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA, UNLESS OTHERWISE NOTED)
3. PRO FORMA RESULTS OF OPERATIONS (UNAUDITED) (CONTINUED)
<TABLE>
<S> <C>
(2) Interest expense on reorganized long-term debt.
(3) Elimination of the effect of non-recurring reorganization items on
operations.
</TABLE>
4. CONTRACTS IN PROGRESS
The status of contract costs on uncompleted construction contracts was as
follows:
<TABLE>
<CAPTION>
COSTS AND ESTIMATED BILLINGS IN EXCESS
EARNINGS IN EXCESS OF COSTS AND
OF BILLINGS ESTIMATED EARNINGS TOTAL
--------------------- ------------------- ---------
<S> <C> <C> <C>
December 31, 1993:
Costs and estimated earnings...................................... $ 352 $ 138 $ 490
Billings.......................................................... 24 288 312
----- ----- ---------
$ 328 $ 150 $ 178
----- ----- ---------
----- ----- ---------
December 31, 1994:
Costs and estimated earnings...................................... $ 460 $ 102 $ 562
Billings.......................................................... 17 168 185
----- ----- ---------
$ 443 $ 66 $ 377
----- ----- ---------
----- ----- ---------
</TABLE>
5. OTHER ASSETS
Included in other assets are the following:
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1993 1994
------------- -------------
<S> <C> <C>
Notes receivable from former shareholder (Note 10)................................... $ 669 $ --
Notes receivable from sale of discontinued operations and other (Note 9)............. 155 --
Goodwill and organization costs...................................................... 609 931
Loan origination fees................................................................ 705 624
Investments.......................................................................... 376 397
Pension asset........................................................................ 780 823
Deferred computer costs.............................................................. 667 840
Cash surrender value of life insurance policies...................................... 15 15
Other................................................................................ 199 236
------ ------
$ 4,175 $ 3,866
------ ------
------ ------
</TABLE>
F-24
<PAGE>
ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1994
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA, UNLESS OTHERWISE NOTED)
6. LINES OF CREDIT
On the consummation date of the plan of reorganization, June 30, 1993,
Adience entered into a financing agreement with Congress Financial Corporation
("Congress") that had a renewal date of June 30, 1994 (the "Renewal Date").
Certain revisions were made to the terms of the agreement during 1994 and 1995,
including the extension of the Renewal Date to June 30, 1996. The facility
remains in effect year to year thereafter, unless terminated upon sixty days
written notice by either party on the anniversary of the Renewal Date in any
year. Under the revised agreement, Adience may request loan advances not to
exceed the lesser of $14 million or available collateral (85% of eligible
accounts receivable less than 90 days, 50% of eligible bagged inventory plus 30%
of eligible raw material and finished goods inventory which does not constitute
bagged inventory). The loan is collateralized by accounts receivable, inventory,
fixed assets, intangible assets and Adience's shares of IDT. In addition, IDT
has guaranteed the Adience line of credit and has pledged as collateral its own
accounts receivable, inventory and equipment. The interest rate on the loan is
2.5% over the prime rate (effective rate of 11% at December 31, 1994). At
December 31, 1994, Adience had borrowed $12,468 under the credit facility
including checks in transit of $1,689.
In addition, IDT entered into a financing agreement with Congress, that
expires June 30, 1995. The facility remains in effect year to year thereafter,
unless terminated upon sixty days written notice by either party on the
anniversary of the Renewal Date in any year. If the Congress facility is not
renewed or if alternate financing is not obtained, management believes that IDT
will be able to generate sufficient cash flow from operations to meet its
working capital needs. Certain revisions were also made to the terms of the
agreement during 1994. Under the revised agreement, IDT may request loan
advances not to exceed the lesser of $5 million or available collateral (85% of
eligible accounts receivable less than 90 days plus 30% of eligible raw material
and finished goods inventory). The loan is collateralized by accounts
receivable, inventory and fixed assets. Adience guarantees IDT's debt to
Congress. The interest rate on the loan is 2.5% over the prime rate. At December
31, 1994, IDT had borrowed $800 under the credit facility. Letters of credit
issued under the facility totaled $700 at December 31, 1994, which reduced the
availability under the financing arrangement in a like amount.
Alpine intends to pursue a long-term financing in 1995 to refinance the
Adience existing credit line, as well as for other purposes as deemed
appropriate (see Note 7).
Both Adience and IDT pay commitment fees on the unused portion of their
credit facility of 0.5% per annum. Under the terms of the financing agreements,
both companies are required to maintain certain financial ratios and meet other
financial conditions. The agreements do not allow the companies to incur
additional indebtedness, pay cash dividends, make certain investments, advances
or loans and limits annual capital expenditures. As of December 31, 1994,
Adience and IDT were in compliance with the covenants of their respective
agreements. Adience's ability to continue to comply with such conditions is
dependent upon Adience's ability to achieve specified levels of sales,
profitable operations and borrowing availability. Waivers or amendments may be
required in the future to ensure compliance. Inability to achieve compliance in
the future could affect Adience's access to further borrowings or require it to
secure additional capital by other means.
F-25
<PAGE>
ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA, UNLESS OTHERWISE NOTED)
7. LONG-TERM OBLIGATIONS
Long-term obligations consisted of the following:
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1993 1994
------------ ------------
<S> <C> <C>
Senior Secured Notes due 2002, interest at 11% $ 49,079 $ 49,079
Capital lease obligations.................................................. 745 587
Notes payable with monthly installments of principal interest of $22
through December 1997, interest at 10%.................................... 836 653
Other (interest ranges from 10% to 13%).................................... 560 556
------------ ------------
51,220 50,875
Less: current portion...................................................... 759 662
------------ ------------
50,461 50,213
Discount on New Senior Secured Notes 4,250 3,763
------------ ------------
$ 46,211 $ 46,450
------------ ------------
------------ ------------
</TABLE>
In connection with the Plan of Reorganization, $49,079 of Adience Senior
Secured Notes with an annual interest rate of 11% (the "Adience Senior Notes")
were issued under an indenture agreement dated as of June 30, 1993. The Adience
Notes are redeemable at the option of Adience after December 15, 1997. The
Adience Notes are not guaranteed by the subsidiaries of Adience. The Adience
Notes are secured by a lien on all the assets of Adience, including the stock of
IDT.
Adience, on a consolidated basis, has agreed to certain restrictive
covenants which are customary for such financings including, among other things,
limitations on additional indebtedness, limitations on asset sales and
restrictions on the payment of dividends.
As part of Alpine's acquisition of Adience, Alpine entered into a debt
exchange agreement, dated as of October 11, 1994, as amended (the "Debt Exchange
Agreement"), with the holders of approximately 90% in principal amount of the
Adience Senior Notes, pursuant to which Alpine has the option to cause such
holders to exchange their Adience Senior Notes, in the principal amount of $44
million plus accrued interest, for a combination of approximately $35.3 million
in cash and other non-cash consideration. If the exchange does not occur prior
to June 30, 1995, the Debt Exchange Agreement may be terminated by either Alpine
or the Adience Senior Note holders. The Debt Exchange Agreement also allows
Adience to defer the December 15, 1994 and June 15, 1995 interest payments due
to such holders of the Adience Senior Notes until the date the debt exchange
occurs, or if such debt exchange does not occur, then all accrued interest will
be due on December 15, 1995.
Alpine intends to pursue a long-term financing in 1995 to provide for the
redemption at a discount of the Adience Senior Notes.
Principal maturities of long-term obligations are as follows:
<TABLE>
<S> <C>
1995....................................................... $ 662
1996....................................................... 540
1997....................................................... 428
1998....................................................... 122
1999....................................................... 44
Thereafter................................................. 49,079
---------
$ 50,875
---------
---------
</TABLE>
F-26
<PAGE>
ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA, UNLESS OTHERWISE NOTED)
7. LONG-TERM OBLIGATIONS (CONTINUED)
Property, plant and equipment at December 31, 1993 and 1994 includes equipment,
automobiles and trucks under capital leases with a net book value of $1,497 and
$1,370, respectively. During the year ended 1993, the six months ended June 30
and December 31, 1993, and the year ended 1994 Adience incurred capital lease
obligations of $524, $90, $309 and $265, respectively.
8. OPERATING LEASES
Adience leases certain buildings, machinery, and equipment under both short-
and long-term lease arrangements. Future minimum lease commitments under
non-cancelable operating leases are not significant. Rental expense relating to
such leases was approximately $1,600 in 1992, $800 for the six months ended June
30, 1993, $1,000 for the six months ended December 31, 1993 and $1,900 in 1994.
9. DISCONTINUED OPERATIONS
Alpine and IDT entered into an Agreement and Plan of Merger, dated as of
December 21, 1994, which provides for the merger of two of Alpine's
subsidiaries, APV and Posterloid, with and into two separate wholly-owned
subsidiaries of IDT formed for the purpose of acquiring APV and Posterloid (the
"IDT Merger") (see Note 1). After the IDT Merger, Alpine intends to distribute
to its stockholders, or otherwise dispose of a substantial portion of IDT common
stock owned by Alpine.
In connection with the IDT Merger and Distribution, Adience's consolidated
financial statements and notes thereto have been reclassified to reflect the
operations of IDT as discontinued. In conjunction with this treatment, the
Company recorded a non-cash charge of $3,339 to write-down the investment in IDT
to estimated fair market value. The impact of the write-down on 1994 earnings
was $0.33 per share.
Net assets of discontinued operations consist primarily of accounts
receivable of $11,453 and $9,258, inventories of $3,438 and $3,812 and property,
plant and equipment of $1,738 and $1,506 at December 31, 1993 and 1994,
respectively. Accounts payable and accrued expenses include $5,204 and $5,885 at
December 31, 1993 and 1994, respectively, related to IDT's operations.
During 1992, Adience's Geotec operation was sold for approximately $1.1
million in cash and $1.2 million in notes receivable, after concluding that
Geotec's operations no longer fit Adience's long-term strategic plans. In
addition, Adience's Hotwork division, which provided preheating services to
refractory maintenance companies, was sold during 1992 for $1.2 million in cash.
During the six months ended June 30, 1993 and December 31, 1993, adjustments to
the previously reported loss were made on these sales of approximately $400 and
$84, respectively, which has been reflected as an additional loss on the
disposal of discontinued operations in the consolidated statements of
operations.
In November 1991, Adience sold its wholly owned subsidiary, Energy
Technology, Inc. ("Entec"), for approximately $6.5 million. In addition, during
1991, Adience sold certain assets and all of the businesses of its Texas
operations ("Texops"), Chemsteel, Inc., and Ward Duct Connectors, Inc. During
1992, an adjustment to the previously reported gain was made on these sales of
approximately $1.1 million, which has been reflected as an additional loss on
disposal of discontinued operations in the consolidated statements of
operations.
The operating results of the discontinued operations are shown separately in
the accompanying consolidated statements of operations. Net revenues of
discontinued operations were $61,499, $23,740, $24,307 and $32,365 for the year
ended December 31, 1992, the six months ended June 30 and December 31, 1993 and
the year ended December 31, 1994, respectively.
F-27
<PAGE>
ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA, UNLESS OTHERWISE NOTED)
10. RELATED PARTY TRANSACTIONS
In connection with the plan of reorganization, Adience entered into a new
multi-year agreement signed in 1994, to be effective as of October 1, 1992, with
the former principal shareholder, Chairman of the Board and Chief Executive
Officer and a severance compensation agreement with his son for a period of
seven and five years, respectively. The present value of these payments has been
reflected in "Reorganization items-other" and total approximately $4.8 million
for the year ended December 31, 1992.
Note receivable from the former principal shareholder of Adience (current
portion included in "Prepaid expenses, deposits and other"; 1993--$515;
long-term portion included in "Other assets"; 1993--$669) has been netted
against amounts payable to the former principal shareholder in the accompanying
December 31, 1994 consolidated balance sheet.
Steib & Company, a New York general partnership, was granted options to
purchase 1,275,000 shares of Company common stock as partial compensation for
services to be performed under an advisory agreement with the Company. Steven S.
Elbaum, a member of the Company's Board of Directors, is a general partner of
Steib & Company. Total amounts paid during 1994 related to the advisory
agreement amounted to $188.
In connection with Alpine's acquisition of substantially all of Adience's
common stock, Alpine purchased 5.8% of Adience's common stock from Steib &
Company ("Steib"). Alpine reimbursed Steib & Company for costs incurred by Steib
in connection with Steib's investment in the Adience common stock. In connection
with these transactions, a three year advisory agreement between Adience and
Steib was canceled, as was Steib's option to purchase 1,275,000 shares of
Adience common stock.
11. RESEARCH AND DEVELOPMENT EXPENSE
Adience incurred research and development expense of $1,191, $541, $541 and
$1,102 for the year ended December 31, 1992, the six months ended June 30 and
December 31, 1993 and year ended December 31, 1994, respectively.
12. INCOME TAXES
(Loss) income from continuing operations before income taxes, and
extraordinary item consisted of:
<TABLE>
<CAPTION>
PRE-EMERGENCE POST-EMERGENCE
----------------------------------- ------------------------------------
YEAR ENDED SIX MONTHS ENDED SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1992 JUNE 30, 1993 DECEMBER 31, 1993 DECEMBER 31, 1994
----------------- ---------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Domestic................... $ (26,531) $ 15,864 $ (15,430) $ (15,191)
Canadian................... 599 646 (2) 684
-------- ------- -------- --------
$ (25,932) $ 16,510 $ (15,432) $ (14,507)
-------- ------- -------- --------
-------- ------- -------- --------
</TABLE>
F-28
<PAGE>
ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA, UNLESS OTHERWISE NOTED)
12. INCOME TAXES (CONTINUED)
Federal, foreign, and state income taxes (benefits) from continuing
operations consisted of the following:
<TABLE>
<CAPTION>
PRE-EMERGENCE POST-EMERGENCE
----------------------------------- ------------------------------------
YEAR ENDED SIX MONTHS ENDED SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1992 JUNE 30, 1993 DECEMBER 31, 1993 DECEMBER 31, 1994
----------------- ---------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Current:
Federal......................... $ (3,105) $ -- $ -- $ (4,297)
Foreign......................... 338 261 113 345
State........................... 200 -- 149 --
------- ------- ------- -------
Total current................. (2,567) 261 262 (3,952)
------- ------- ------- -------
Deferred:
Federal......................... (5,924) 4,215 (627) (668)
Foreign......................... 23 -- 38 (26)
State........................... (902) 504 (125) --
Reorganization valuation
adjustment..................... -- (1,108) -- --
Change in valuation allowance... 8,339 (3,612) (356) 4,965
------- ------- ------- -------
Total deferred................ 1,536 (1) (1,070) 4,271
------- ------- ------- -------
Total income tax provision
(benefit).................... $ (1,031) $ 260 $ (808) $ 319
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
The effective income tax rate from continuing operations varied from the
statutory federal income tax (benefit) rate as follows:
<TABLE>
<CAPTION>
PRE-EMERGENCE POST-EMERGENCE
--------------------------- ----------------------------
SIX MONTHS SIX MONTHS
YEAR ENDED ENDED ENDED YEAR ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, DECEMBER 31,
1992 1993 1993 1994
------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
Statutory federal income tax rate.............. (34.0)% 35.0% (35.0)% (35.0)%
Increases (decreases):
State income taxes, net federal tax
benefit..................................... (3.6) 1.5 -- --
Effect on Canadian income taxes.............. 0.6 0.1 1.0 2.2
Change in valuation allowance................ 33.1 (11.2) (1.3) 31.2
Amortization of reorganization value......... -- -- 21.4 2.5
Other reorganization adjustments............. -- (4.4) 9.9 --
Provision recorded to reorganization value... -- (3.3) -- --
Asset write-up for books..................... -- (3.1) -- --
Non taxable debt discharge................... -- (17.7) -- --
Reduction in NOL carryforward................ -- 3.1 -- --
Other items.................................. (0.1) 1.6 (1.2) 1.3
------ ------ ------ ------
(4.0)% 1.6% (5.2)% 2.2%
------ ------ ------ ------
------ ------ ------ ------
</TABLE>
F-29
<PAGE>
ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA, UNLESS OTHERWISE NOTED)
12. INCOME TAXES (CONTINUED)
Deferred tax liabilities (assets) are comprised of the following at December
31, 1993 and December 31, 1994:
<TABLE>
<CAPTION>
1993 1994
---------- ----------
<S> <C> <C>
Property, plant and equipment................................................... $ 7,245 $ 6,263
Pension accrual................................................................. 287 287
Accounting method change from LIFO.............................................. 618 309
---------- ----------
Gross deferred tax liabilities.............................................. 8,150 6,859
---------- ----------
Inventory reserves.............................................................. (225) (853)
Accrued commissions and labor costs............................................. (4,041) (2,829)
Bad debt reserve................................................................ (428) (352)
State income & sales/use tax liability.......................................... (25) (24)
Environmental liability......................................................... (620) (707)
IRS interest accrual............................................................ (400) (400)
Inventory Section 263A costs.................................................... (214) (214)
NOL carryforwards............................................................... (5,274) (9,604)
Foreign tax credits............................................................. (543) (510)
Minimum tax credits............................................................. (402) (402)
Other........................................................................... (144) (101)
---------- ----------
Gross deferred tax assets................................................... (12,316) (15,996)
Valuation allowance............................................................. 5,400 10,365
---------- ----------
Net deferred tax liability...................................................... $ 1,234 $ 1,228
---------- ----------
---------- ----------
</TABLE>
SFAS 109 requires a valuation allowance when it is "more likely than not
that some portion or all of the deferred tax assets will not be realized." It
further states that "forming a conclusion that a valuation allowance is not
needed is difficult when there is negative evidence such as cumulative losses in
recent years." The ultimate realization of this deferred income tax asset
depends on Adience's ability to generate sufficient taxable income in the
future. While Adience believes that the deferred income tax asset will be fully
or partially realized by future operating results, losses in recent years and a
desire to be conservative make it appropriate to record a valuation allowance.
As of December 31, 1994, Adience has a net operating loss carryforward for
domestic federal income tax purposes of approximately $24,000 which will expire
in 2007, 2008 and 2009. Minimum tax and foreign tax credits of $912 are also
available to offset federal income tax liabilities to the extent that regular
tax exceeds tentative minimum tax in subsequent years. Upon consummation of the
Plan of Reorganization, Adience had an ownership change, as defined by Section
382 of the Internal Revenue Code, which may limit Adience's ability to utilize
the pre-ownership change portion of its net operating loss and/or credit. In
addition under the provisions of SOP 90-7, subsequent utilization of net
operating loss carryforwards will be reflected as an adjustment to
reorganization value in excess of amounts allocable to identifiable assets or
paid-in capital. An examination of Adience's consolidated U.S. income tax
returns for 1988 through 1990 is currently underway. Any resulting adjustments
for those years will impact Adience's net operating loss carryforwards.
F-30
<PAGE>
ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA, UNLESS OTHERWISE NOTED)
13. EMPLOYEE BENEFITS
EMPLOYEE STOCK OWNERSHIP PLAN
During 1989, Adience established an Employee Stock Ownership Plan ("ESOP")
for most salaried and certain hourly U.S. employees who meet minimum age and
service requirements. To fund the ESOP, Adience borrowed $2.5 million repayable
over five years in equal quarterly payments plus interest. Proceeds of this
borrowing were loaned to the ESOP on the same terms and used by the ESOP, along
with cash contributions from Adience, to purchase 646,875 shares of Adience's
common stock from its principal shareholder during 1989 and 1990. In connection
with the Reorganization, the ESOP shares were reduced by 55% to 291,093 shares.
Effective June 30, 1993 all shares held by the ESOP were allocated to the ESOP
participants' accounts. On July 1, 1993, Adience suspended any future
recognition of expense related to the ESOP. Accordingly, Adience has no
intention at this time to issue more shares of its common stock to the ESOP.
Contributions to the ESOP charged to expense for the the year ended 1992 and six
months ended June 30, 1993 amounted to $625 and $355, respectively.
OTHER EMPLOYEE BENEFIT PLANS
During 1992, Adience initiated a 401(k) Savings Plan. This plan covers
substantially all non-bargaining employees, including those employed by IDT, who
meet minimum age and service requirements. Adience matches employee
contributions of up to 8 percent of compensation at a rate of 25 percent. In
addition, effective January 1, 1994, Adience declared a discretionary
contribution equal to 3 percent of employees' salaries. Amounts charged against
income totaled $93 for the year ended December 31, 1992, $63 for the six months
ended June 30, 1993, $58 for the six months ended December 31, 1993 and $415 for
the year ended December 31, 1994.
Adience and subsidiaries maintain various defined benefit pension plans
covering substantially all hourly employees. The plans provide pension benefits
based on the employee's years of service or the average salary for a specific
number of years of service. Adience's funding policy is to make annual
contributions to the extent deductible for federal income tax purposes.
Plan assets and projected benefit obligations for service to date for
Adience's defined benefit pension plans aggregated approximately $6,811 and
$5,900, respectively, at December 31, 1994. The comparable amounts at December
31, 1993 were $6,786 (assets) and $5,785 (obligations). The components of net
periodic pension cost for the year ended December 31, 1992, the six months ended
June 30 and December 31, 1993 and the year ended December 31, 1994 are not
material to the consolidated financial statements. Plan assets are invested in
cash, short-term investments, equities, and fixed income instruments. The
actuarial present value of the projected benefit obligation at December 31, 1993
and 1994 was determined using a weighted average discount rate of 7.5%. The
expected long-term rate of return on plan assets was 7.5% at December 31, 1993
and 1994.
Certain union employees of Adience and subsidiaries are covered by
multi-employer defined benefit retirement plans. Expense relating to these plans
amounted to $782, $474, $619 and $1,138 for the year ended December 31, 1992,
the six months ended June 30, 1993 and December 31, 1993 and the year ended
December 31, 1994, respectively.
In December 1990, the Financial Accounting Standards Board issued SFAS No.
106 "Employers' Accounting for Postretirement Benefits Other Than Pensions"
(SFAS No. 106), that requires that the projected future cost of providing
postretirement benefits, such as health care and life insurance, be recognized
as an expense as employees render service instead of when the benefits are paid.
Adience currently provides only life insurance benefits to certain of its hourly
and salaried employees on a fully insured basis. Adoption of SFAS No. 106 did
not have a material impact on Adience's consolidated financial
F-31
<PAGE>
ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA, UNLESS OTHERWISE NOTED)
13. EMPLOYEE BENEFITS (CONTINUED)
statements. In November 1992, the Financial Accounting Standards Board issued
new rules that require that the projected future cost of providing
postemployment benefits be recognized as an expense as employees render service
instead of when the benefits are paid. Adience believes its accrual for
postemployment benefits (workers' compensation) is adequate.
14. STOCK PLANS
On May 24, 1994, the Board of Directors of Adience adopted the 1994 Stock
Option Plan ("Stock Option Plan") and 1994 Directors Stock Grant Plan ("Stock
Grant Plan"). Under the Stock Option Plan, 1,250,000 shares have been reserved
for issuance upon the exercise of stock options, which may be granted to
employees by the Compensation Committee of the Company's Board of Directors.
Under the Stock Option Plan, options generally become exercisable six months
following the date of grant or over a period determined by the Board of
Directors and expire ten years from the date of grant. The Stock Option Plan
provides for the option price to be paid in cash, shares of Adience's common
stock owned by the option holder, or a combination of such shares and cash. As
of December 31, 1994, 225,000 options have been granted under the Stock Option
Plan. Each option granted entitles the holder to acquire one share of Adience
common stock at an exercise price not to be less that the fair market value of
the underlying shares on the date of grant. There is currently no public market
for the common stock.
The Stock Grant Plan provides that up to 300,000 shares of common stock may
be granted to the members of the Board of Directors, at no cost to the
directors. The Stock Grant Plan authorized the automatic grant of 10,000 shares
of common stock to each director on June 13, 1994, and 10,000 shares of common
stock to each director on the date of each of the next two successive annual
meetings of shareholders of Adience provided the director is then re-elected to
the board, up to an aggregate of not more than 30,000 shares for each director.
These grants have been made in lieu of a cash retainer which would have been
paid to each director.
The aggregate fair market value of the shares granted under the Stock Grant
Plan is considered unearned compensation at the time of grant and compensation
is earned ratably over the year. Adience recognized $75 in expense for the year
ended December 31, 1994.
15. COMMITMENTS AND CONTINGENCIES
At December 31, 1994, Adience had $200 in irrevocable standby letters of
credit outstanding, not reflected in the accompanying consolidated financial
statements, as guarantees in force for various insurance policies, performance
and bid bonds. These instruments are usually for a period of one year or the
duration of the contract. The letters of credit reduce Adience's availability
under the Congress credit facility.
In February 1992, IDT was cited by the Ohio Environmental Protection Agency
(the "Ohio EPA") for violations of Ohio's hazardous waste regulations, including
speculative accumulation of waste (holding waste on-site beyond the legal limit)
and illegal disposal of hazardous waste on the site of its Alliance, Ohio
manufacturing facility. IDT had $783 accrued at December 31, 1993 for the clean
up of this site. This amount is included under the caption "Net assets of
discontinued operations" in the accompanying balance sheet.
In December 1993, IDT and Adience signed a consent order with the Ohio EPA
and Ohio Attorney General which required IDT and Adience to pay to the State of
Ohio a civil penalty of $200 (of which IDT paid $175 and Adience paid $25) and
to remediate the site in accordance with specified cleanup goals. In addition,
the consent order requires the payment of stipulated penalties of up to $1 per
day for failure to satisfy certain requirements of the consent order including
milestones in the closure plan. In October 1994, IDT and Adience filed a
proposed amendment to the consent order which would allow IDT and Adience to
establish risk-based cleanup goals, an approach which has been approved by the
Ohio EPA for other
F-32
<PAGE>
ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA, UNLESS OTHERWISE NOTED)
15. COMMITMENTS AND CONTINGENCIES (CONTINUED)
contaminated sites. If the Ohio EPA approves this proposed amendment, use of
this approach is expected to reduce the extent and cost of remediation required
at this site. The Ohio EPA has not yet responded to this proposed amendment. At
December 31, 1994, environmental accruals amounted to $750, which represents
management's reasonable estimate of the amounts remaining to be incurred in this
matter, including the costs of effecting the closure plan, bonding and insurance
costs, penalties and legal and consultants' fees. This amount is included under
the caption "Net assets of discontinued operations" in the accompanying balance
sheet. Since 1991, Adience and IDT have together paid $693 (excluding the civil
penalty) for the environmental clean-up related to the Alliance facility. If the
Ohio EPA does not accept the proposed amendment to the consent order, the cost
of the remediation may exceed the amounts currently accrued.
Under the acquisition agreement pursuant to which IDT acquired the property
from Adience in 1990, Adience represented and warranted that, except as
otherwise disclosed to IDT, no hazardous material has been stored or disposed of
on the property. No disclosure of storage or disposal of hazardous material on
the site was made. Accordingly, Adience is required to indemnify IDT for any
losses in excess of $250. IDT has notified Adience that it is claiming the right
to indemnification for all costs in excess of $250 incurred by IDT in this
matter and has received assurance that Adience will honor such claim. Since
1991, Adience has reimbursed IDT $643; if Adience is financially unable to honor
its remaining obligation, such costs would be borne by IDT.
Adience is also engaged in various other legal actions arising in the
ordinary course of business. Management believes, after discussions with
internal and external counsel, that the ultimate outcome of the proceedings will
not have a material adverse effect on Adience's consolidated financial position.
F-33
<PAGE>
ADIENCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA, UNLESS OTHERWISE NOTED)
16. QUARTERLY DATA AND FOURTH QUARTER ADJUSTMENTS (UNAUDITED)
The following table sets forth selected highlights for each of the fiscal
quarters during the year ended December 31, 1994 and the six months ended June
30 and December 31, 1993:
<TABLE>
<CAPTION>
PRE-EMERGENCE POST-EMERGENCE
---------------------- --------------------------
QUARTER ENDED 1993 MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
--------------------------------------------------------------- ----------- --------- ------------ ------------
<S> <C> <C> <C> <C>
Net revenues................................................... $ 21,881 $ 22,550 $ 25,327 $ 29,245
Cost of revenues............................................... 17,323 18,605 21,562 26,217
Operating loss................................................. (84) (1,923) (959) (10,561)
(Loss) income before extraordinary item........................ (1,930) 17,782 (2,265) (12,102)
Net (loss) income.............................................. (1,930) 35,262 (2,265) (12,102)
Loss per common share before extraordinary item................ * * $ (0.23) $ (1.21)
Net loss per common share...................................... * * $ (0.23) $ (1.21)
Average common shares outstanding.............................. * * 10,000 10,000
</TABLE>
<TABLE>
<CAPTION>
POST-EMERGENCE
--------------------------------------------------
QUARTER ENDED 1994 MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
--------------------------------------------------------------- ----------- --------- ------------ ------------
<S> <C> <C> <C> <C>
Net revenues................................................... $ 22,126 $ 23,287 $ 27,796 $ 23,064
Cost of revenues............................................... 19,255 19,523 22,777 22,913
Operating (loss) profit........................................ (1,867) (1,186) 647 (5,022)
Loss before extraordinary item................................. (3,885) (2,795) (1,225) (12,870)
Net loss....................................................... (3,885) (2,795) (1,225) (12,870)
Net loss per common share...................................... $ (0.39) $ (0.28) $ (0.12) $ (1.28)
Average common shares outstanding.............................. 10,000 10,019 10,100 10,100
* Earnings per common share are not meaningful prior to June 30, 1993 due to the reorganization -- see Note 1.
</TABLE>
Fourth quarter results for 1994 include a non-cash charge of $2.8 million
related to asset write-downs at Adience. Certain assets of Adience were
evaluated for disposition, and the net book value of these assets was adjusted
to estimated fair market value. The impact of these asset write-downs on fourth
quarter results was $0.28 per common share. These write-downs resulted from
Adience's business improvement program which includes selling non strategic
assets and reassessing the net realizable value of certain inventory product
lines in light of the current economic environment and the related impact on
estimated revenue levels for those product lines.
Additionally, fourth quarter results were reduced by a non-cash charge of
$3.3 million to write-down the investment in IDT to estimated fair market value.
The impact of the write-down on the net loss per common share was $0.33. See
Note 9 to Consolidated Financial Statements for further detail.
Losses from discontinued operations totaled $2.7 million for the fourth
quarter ending December 31, 1994 or $0.27 per common share.
Net loss per common share for the fourth quarter of 1993 included a special
charge of $8 million for write-down of Adience's reorganization value in excess
of amounts allocable to identifiable assets and a $314 loss on the sale of two
divisions. Excluding these adjustments, net loss per common share for the fourth
quarter was $(0.38).
F-34
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The General Corporation Law of the State of Delaware permits corporations
incorporated under the law of the State of Delaware (such as Alpine) and its
stockholders to limit directors' exposure to liability for certain breaches of
the directors' fiduciary duty, either in a suit on behalf of such corporation or
in an action by stockholders of such corporation.
Alpine's Certificate of Incorporation eliminates the liability of directors
to stockholders or Alpine for monetary damages arising out of the directors'
breach of their fiduciary duty of care. Alpine's By-laws authorize Alpine to
indemnify its directors, officers, incorporations, employees and agents with
respect to certain costs, expenses and amounts incurred in connection with an
action, suit or proceeding by reason of the fact that such person was serving as
a director, officer, incorporator, employee or agent of Alpine. In addition,
Alpine's By-laws permit Alpine to provide additional indemnification rights to
its officers and directors and to indemnify them to the greatest extent possible
under the Delaware General Corporation Law.
Alpine maintains a standard form of officers' and directors' liability
insurance policy which provides coverage to the officers and directors of Alpine
for certain liabilities, including certain liabilities which may arise out of
this Registration Statement.
The Purchase Agreement provides for reciprocal indemnification between
Alpine and its controlling persons, on the one hand, and the Initial Purchasers
and their controlling persons, on the other hand, against certain liabilities in
connection with this offering, including liabilities under the Securities Act.
ITEM 21. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
--------- -------------------------------------------------------------------------------------------------------
<S> <C>
2(a) Asset Purchase Agreement, dated as of March 17, 1995 by and among Alcatel NA Cable Systems, Inc.,
Alcatel Canada Wire, Inc. Superior Cable Corporation and Superior Teletec Inc. (incorporated herein by
reference to Exhibit 1 to the Current Report on Form 8-K of Alpine dated May 24, 1995)
2(b) Amendment dated May 11, 1995 to Asset Purchase Agreement by and among Alcatel NA Cable Systems, Inc.,
Alcatel Canada Wire, Inc., Superior Cable Corporation and Superior Teletec Inc. (incorporated herein
by reference to Exhibit 2 to the Current Report on Form 8-K of Alpine dated May 24, 1995)
2(c) Agreement and Plan of Merger, dated as of December 21, 1994, as amended, by and among Information
Display Technology, Inc., IDT PolyVision Acquisition Corp., IDT Posterloid Acquisition Corp., The
Alpine Group, Inc., Alpine/Poly Vision, Inc. and Posterloid Corporation (incorporated herein by
reference to Exhibit 2 to Amendment No. 1 to Alpine's Statement on Schedule 13D relating to its
beneficial ownership of equity securities of Information Display Technology, Inc. dated December 28,
1994)
2(d) Amendment to the Agreement and Plan of Merger, dated as of December 21, 1994, by and among Information
Display Technology, Inc., IDT PolyVision Acquisition Corp., IDT Posterloid Acquisition Corp., The
Alpine Group, Inc., Alpine/PolyVision, Inc. and Posterloid Corporation (incorporated herein by
reference to Exhibit 1 to Amendment No. 2 to Alpine's Statement on Schedule 13D relating to its
beneficial ownership of equity securities of Information Display Technology Inc. dated May 5, 1995)
2(e) Amended and Restated Stock Purchase Agreement, dated as of October 11, 1994, by and among The Alpine
Group, Inc. and certain stockholders of Adience, Inc. ("Adience") as listed therein, as amended
(incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K dated
January 5, 1995)
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
--------- -------------------------------------------------------------------------------------------------------
<S> <C>
3(a) Certificate of Incorporation of Alpine (incorporated herein by reference to Exhibit 3(a) to the Annual
Report on Form 10-K of Alpine for the fiscal year ended April 30, 1995 (the "1995 10-K"))
3(b) Amendment to the Certificate of Incorporation of Alpine (incorporated herein by reference to Exhibit
3(aa) of Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 (Registration No.
33-53434) of Alpine, as filed with the Commission on May 12, 1993)
3(c) Certificate of the powers, Designations, Preferences and Rights of the 9% Cumulative Convertible
Preferred Stock of Alpine (incorporated herein by reference to Exhibit 1 to the Quarterly Report on
Form 10-Q of Alpine for the quarter ended January 31, 1989)
3(d) Certificate of the Powers, Designations, Preferences and Rights of the 9% Cumulative Convertible Senior
Preferred Stock of Alpine (incorporated herein by reference to Exhibit 3(c) to the Annual Report on
Form 10-K of Alpine for the fiscal year ended April 30, 1992 ("1992 10-K"))
3(e) Certificate of the Powers, Designations, Preferences and Rights of the 8.5% Cumulative Convertible
Senior Preferred Stock of Alpine (incorporated herein by reference to Exhibit 3(e) to the Annual
Report on Form 10-K of Alpine for the Fiscal year ended April 30, 1994)
3(f) Certificate of the Powers, Designations, Preferences and Rights of the 8% Cumulative Convertible Senior
Preferred Stock of the Company (incorporated herein by reference to Exhibit 3(f) to the 1995 10-K)
3(g) By-laws of Alpine (incorporated herein by reference to Exhibit 3(g) to the 1995 10-K)
3(h)* Certificate of Incorporation of Adience
3(i)* By-laws of Adience
3(j)* Articles of Incorporation of Superior Telecommunications Inc.
3(k)* By-laws of Superior Telecommunications Inc., as amended
4(a) Indenture, dated as of October 1, 1986, between Alpine and Manufacturers Hanover Trust Company
("MHTC"), as trustee, relating to the 13 1/2% Senior Subordinated Debentures due 1996 of the Company
(incorporated herein by reference to Exhibit 4 to Amendment No. 2 to the Registration Statement on
Form S-1 (Registration No. 33-7709) of Alpine, as filed with the Commission on October 3, 1986)
4(b) First Supplemental Indenture to the above Indenture, dated as of February 3, 1989, between Alpine and
MHTC, as trustee (incorporated herein by reference to Exhibit 4(b) to the 1995 10-K)
4(c) Second Supplemental Indenture to the above Indenture, dated as of October 31, 1989, between Alpine and
MHTC, as trustee (incorporated herein by reference to Exhibit 4(c) to the 1995 10-K)
4(d) Indenture, dated as of October 31, 1989, between Alpine and IBJ Schroder Bank & Trust Company ("IBJ"),
as trustee, relating to the Convertible Secured Senior Subordinated Notes due July 31, 1996, of Alpine
(incorporated herein by reference to Exhibit 4(d) to the 1995 10-K)
4(e) First Supplemental Indenture to the above Indenture, dated as of March 28, 1991, between Alpine and
IBJ, as trustee (incorporated herein by reference to Exhibit 4 to the Current Report on Form 8-K of
Alpine dated April 10, 1991 (the "April 1991 8-K"))
4(f) Second Supplemental Indenture to the above Indenture, dated as of April 10, 1992, between Alpine and
IBJ, as trustee (incorporated herein by reference to Exhibit 4(f) to the 1992 10-K)
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
--------- -------------------------------------------------------------------------------------------------------
<S> <C>
4(g) Indenture, dated as of June 30, 1993, between Adience, Inc. ("Adience") and IBJ, as trustee
(incorporated herein by reference to Registration Statement No. 33-72024 of Adience, Inc.)
4(h) Supplemental Indenture, dated as of July 21, 1995, to Indenture by and between Adience and IBJ dated as
of June 30, 1995 (incorporated herein by reference to Exhibit 10(cc) to the 1995 10-K)
4(i) Indenture, dated as of July 15, 1995, by and among Alpine, Adience, Superior Telecommunications Inc.,
Superior Cable Corporation and Marine Midland Bank ("Marine Midland"), as trustee (incorporated herein
by reference to Exhibit 10(ee) to the 1995 10-K)
4(j)* Registration Rights Agreement, dated as of July 21, 1995, by and among Alpine, Adience, Superior
Telecommunications Inc., Superior Cable Corporation, Merrill Lynch Co., Nomura Securities
International, Inc. and First Albany Corporation
4(k)* Form of Old Note
4(l)* Form of New Note
5 Opinion of Proskauer Rose Goetz & Mendelsohn LLP re: validity of securities
8 Opinion of Proskauer Rose Goetz & Mendelsohn LLP re: certain federal income tax consequences (contained
in opinion to be filed as Exhibit 5)
10(a) Amended and Restated 1984 Restricted Stock Plan of Alpine (incorporated herein by reference to Exhibit
10.5 to Form S-4 (Registration No. 33-9978) of Alpine, as filed with the Commission on October 5, 1993
(the "S-4 Registration Statement"))
10(b) Amended and Restated 1987 Long Term Equity Incentive Plan of Alpine (incorporated herein by reference
to Exhibit 10.4 to the S-4 Registration Statement)
10(c) Stock Purchase Agreement, dated as of February 14, 1992, by and between Alpine and Dataproducts
Corporation, relating to the purchase of shares of capital stock of DNE Technologies, Inc. ("DNE")
(incorporated herein by reference to Exhibit 1 to the Current Report on Form 8-K of Alpine dated March
2, 1992 (the "March 1992 8-K"))
10(d) Loan Agreement, dated as of February 13, 1992, by and among Alpine, DNE and the Connecticut Development
Authority (incorporated herein by reference to Exhibit 3 to the March 1992 8-K)
10(e) Agreement and Plan of Merger by and between Alpine and Superior TeleTec In., dated as of June 17, 1993
and amended on September 24, 1993 (incorporated herein by reference to Exhibit 2 to the S-4
Registration Statement)
10(f) Exchange Agreement, dated June 17, 1993 by and among Alpine, PV Partners, Suez Ventures, EUROC, and
Samuel Montagu Finance (incorporated herein by reference to Exhibit 10.1 to the S-4 Registration
Statement)
10(g) Development Agreement between Connecticut Innovations Incorporated and Alpine/ PolyVision, Inc., dated
as of December 9, 1992 (incorporated herein by reference to Exhibit 10(z) to the Annual Report on Form
10-K of Alpine for the fiscal year ended April 30, 1993 (the "1993 10-K"))
10(h) Loan Agreement between Connecticut Development Authority and Alpine/PolyVision, Inc., dated as of
December 9, 1992 (incorporated herein by reference to Exhibit 10(aa) to the 1993 10-K)
10(i) Master Credit Agreement, dated October 19, 1993 and amended on November 10, 1993, by and among Superior
TeleTec Transmission Products Inc., as borrower, Alpine, as guarantor, Bank of Boston Connecticut and
Creditanstalt-Bankverein, as the banks, and Bank of Boston Connecticut, as the agent (incorporated
herein by reference to Exhibit 10(a) to the Current Report on Form 8-K of Alpine dated November 24,
1993)
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
--------- -------------------------------------------------------------------------------------------------------
<S> <C>
10(j) Lease Agreement by and between ALP(TX) QRS 11-28, Inc., and Superior TeleTec Transmission Products,
Inc., dated as of December 16, 1993 (incorporated herein by reference to Exhibit (i) to the Quarterly
Report on Form 10-Q of Alpine for the Quarter ended January 31, 1994)
10(k) Amended and Restated Debt Exchange Agreement, dated as of October 11, 1994, among Alpine and certain
debtholders of Adience as listed therein (as amended through April 14, 1995) (incorporated herein by
reference to Exhibit 10(k) to the 1995 10-K)
10(l) Note Purchase Agreement by and among Alpine, Superior TeleTec, Inc., Superior Cable Corporation and
Nomura International Trust Company (incorporated herein by reference to Exhibit 3 to Alpine's Current
Report on Form 8-K dated May 24, 1995)
10(m) Letter Agreement, dated May 24, 1995 by and between Alpine and PolyVision Corporation ("PolyVision")
relating to $5,000,000 credit commitment (incorporated herein by reference to Exhibit 10(m) to the
1995 10-K)
10(n) Letter Agreement, dated May 24, 1995, by and between Alpine and PolyVision relating to $2,500,000
credit commitment (incorporated herein by reference to Exhibit 10(n) to the 1995 10-K)
10(o) First Amendment to Lease Agreement, dated as of May 10, 1995, by and between ALP (TX) QRS 11-28, Inc.
and Superior Teletec Inc. (incorporated herein by reference to Exhibit 10(o) to the 1995 10-K)
10(p) Purchase Agreement, dated as of July 14, 1995, by and among Alpine, Adience, Superior
Telecommunications Inc., Superior Cable Corporation, Merrill Lynch & Co., Nomura Securities
International, Inc. and First Albany Corporation (incorporated herein by reference to Exhibit 10(p) to
the 1995 10-K)
10(q) Employment Agreement, dated as of September 8, 1993, by and between Alpine and Steven S. Elbaum
(incorporated herein by reference to Exhibit 10(q) to the 1995 10-K)
10(r) Amendment to Employment Agreement, dated as of September 8, 1993, by and between Alpine and Steven S.
Elbaum (incorporated herein by reference to Exhibit 10(r) to the 1995 10-K)
10(s) Employment Agreement, dated as of September 8, 1993, by and between Alpine and Bragi F. Schut
(incorporated herein by reference to Exhibit 10(s) to the 1995 10-K)
10(t) Amendment to Employment Agreement, dated as of September 8, 1993, by and between Alpine and Bragi F.
Schut (incorporated herein by reference to Exhibit 10(t) to the 1995 10-K)
10(u) Employment Agreement, dated as of November 10, 1993, by and between Alpine and David S. Aldridge
(incorporated herein by reference to Exhibit 10(u) to the 1995 10-K)
10(v) Employment Agreement, dated as of November 10, 1993, by and between Alpine and James R. Kanely
(incorporated herein by reference to Exhibit 10(v) to the 1995 10-K)
10(w) Employment Agreement, dated as of November 10, 1993, by and between Alpine and Justin F. Deedy, Jr.
(incorporated herein by reference to Exhibit 10(w) to the 1995 10-K)
10(x) Second Amendment to Lease Agreement, dated as of July 21, 1995, by and between ALP(TX) ORS H-28, Inc.
and Superior Telecommunications Inc. (incorporated herein by reference to Exhibit 10(x) to the 1995
10-K)
10(y) Loan and Security Agreement, dated as of July 21, 1995, by and between Alpine, Shawmut Capital
Corporation, Nationsbank of Georgia, N.A., and Creditanstalt Corporation Finance, Inc. (incorporated
herein by reference to Exhibit 10(y) to the 1995 10-K)
10(z) Amendment to Employment Agreement, dated as of November 10, 1993, by and between Alpine and Justin F.
Deedy, Jr. (incorporated herein by reference to Exhibit 10(z) to the 1995 10-K)
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
--------- -------------------------------------------------------------------------------------------------------
<S> <C>
10(aa) Amendment to Employment Agreement, dated as of November 10, 1993, by and between Alpine and David S.
Aldridge (incorporated herein by reference to Exhibit 10(aa) to the 1995 10-K).
10(bb) Amendment dated as of June 30, 1995, to Amended and Restated Debt Exchange Agreement dated as of
October 11, 1984, among Alpine and certain debtholders of Adience as listed therein (incorporated
herein by reference to Exhibit 10(bb) to the 1995 10-K).
10(cc) Amendment to the Employment Agreement, dated as of November 10, 1993, by and between Alpine and James
R. Kanely (incorporated herein by reference to Exhibit 10(cc) to the 1995 10-K)
10(dd) Pledge Agreement, dated as of July 21, 1995, by and between Alpine and Marine Midland (incorporated
herein by reference to Exhibit 10(dd) to the 1995 10-K).
12 Statement re computation of ratios (incorporated herein by reference to Exhibit 12 to the 1995 10-K)
21 List of Subsidiaries (incorporated herein by reference to Exhibit 21 to the 1995 10-K)
23(a)* Consent of Arthur Andersen LLP (Alpine)
23(b)* Consent of Price Waterhouse LLP (Adience)
23(c) Consent of Proskauer Rose Goetz & Mendelsohn LLP (contained in opinion to be filed as Exhibit 5)
24* Power of Attorney
25* Statement of eligibility of trustee
27 (incorporated herein by reference to Exhibit 27 to the 1995 10-K)
<FN>
------------------------
* Filed herewith
</TABLE>
ITEM 22. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(a) To file, during any period in which officers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(d) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus
II-5
<PAGE>
will contain the information called for by the applicable registration form
with respect to reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other Items of the applicable
form.
(e) That every prospectus (i) that is filed pursuant to paragraph (d)
immediately preceding, or (ii) that purports to meet the requirements of
section 10(a)(3) of the Securities Act of 1933 and is used in connection
with an offering of securities subject to Rule 415 (Section230.415 of this
chapter), will be filed as a part of an amendment to the registration
statement and will not be used until such amendment is effective, and that,
for purposes of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(f) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the Registration Statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(g) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described
in Item 15, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection
with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of
such issue.
(h) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of Form
S-4, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the Registration Statement through the date of responding
to the request.
(i) To supply by means of post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the Registration Statement when
it became effective.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-2, and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on the 16th day of
August, 1995.
THE ALPINE GROUP, INC.
By /s/ STEVEN S. ELBAUM
-------------------------------------
Steven S. Elbaum
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons int he
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
------------------------------------- -------------------- --------------
<C> <S> <C>
/s/ STEVEN S. ELBAUM
-------------------------------------
Steven S. Elbaum
Chairman of the
board and
Chief Executive August 16,
Officer 1995
(principal
executive officer)
/s/ DAVID S. ALDRIDGE
-------------------------------------
David S. Aldridge
Chief Financial
Officer and
Treasurer August 16,
(principal 1995
financial
and accounting
officer)
/s/ KENNETH G. BYERS, JR.
-------------------------------------
Kenneth G. Byers, Jr. August 16,
Director 1995
/s/ RANDOLPH HARRISON
-------------------------------------
Randolph Harrison August 16,
Director 1995
/s/ JOHN C. JANSING
-------------------------------------
John C. Jansing August 16,
Director 1995
/s/ ERNEST C. JANSON, JR.
-------------------------------------
Ernest C. Janson, Jr. August 16,
Director 1995
/s/ JAMES R. KANELY
-------------------------------------
James R. Kanely August 16,
Director 1995
/s/ GENE E. LEWIS
-------------------------------------
Gene E. Lewis August 16,
Director 1995
/s/ BRAGI F. SCHUT
-------------------------------------
Bragi F. Schut August 16,
Director 1995
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
--------- ------------------------------------------------------------------------------------------------ -----
<S> <C> <C>
2(a) Asset Purchase Agreement, dated as of March 17, 1995 by and among Alcatel NA Cable Systems,
Inc., Alcatel Canada Wire, Inc. Superior Cable Corporation and Superior Teletec Inc.
(incorporated herein by reference to Exhibit 1 to the Current Report on Form 8-K of Alpine
dated May 24, 1995)............................................................................
2(b) Amendment dated May 11, 1995 to Asset Purchase Agreement by and among Alcatel NA Cable Systems,
Inc., Alcatel Canada Wire, Inc., Superior Cable Corporation and Superior Teletec Inc.
(incorporated herein by reference to Exhibit 2 to the Current Report on Form 8-K of Alpine
dated May 24, 1995)............................................................................
2(c) Agreement and Plan of Merger, dated as of December 21, 1994, as amended, by and among
Information Display Technology, Inc., IDT PolyVision Acquisition Corp., IDT Posterloid
Acquisition Corp., The Alpine Group, Inc., Alpine/Poly Vision, Inc. and Posterloid Corporation
(incorporated herein by reference to Exhibit 2 to Amendment No. 1 to Alpine's Statement on
Schedule 13D relating to its beneficial ownership of equity securities of Information Display
Technology, Inc. dated December 28, 1994)......................................................
2(d) Amendment to the Agreement and Plan of Merger, dated as of December 21, 1994, by and among
Information Display Technology, Inc., IDT PolyVision Acquisition Corp., IDT Posterloid
Acquisition Corp., The Alpine Group, Inc., Alpine/ PolyVision, Inc. and Posterloid Corporation
(incorporated herein by reference to Exhibit 1 to Amendment No. 2 to Alpine's Statement on
Schedule 13D relating to its beneficial ownership of equity securities of Information Display
Technology Inc. dated May 5, 1995).............................................................
2(e) Amended and Restated Stock Purchase Agreement, dated as of October 11, 1994, by and among The
Alpine Group, Inc. and certain stockholders of Adience, Inc. ("Adience") as listed therein, as
amended (incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on
Form 8-K dated January 5, 1995)................................................................
3(a) Certificate of Incorporation of Alpine (incorporated herein by reference to Exhibit 3(a) to the
Annual Report on Form 10-K of Alpine for the fiscal year ended April 30, 1995 (the "1995
10-K"))........................................................................................
3(b) Amendment to the Certificate of Incorporation of Alpine (incorporated herein by reference to
Exhibit 3(aa) of Post-Effective Amendment No. 1 to the Registration Statement on Form S-3
(Registration No. 33-53434) of Alpine, as filed with the Commission on May 12, 1993)...........
3(c) Certificate of the powers, Designations, Preferences and Rights of the 9% Cumulative Convertible
Preferred Stock of Alpine (incorporated herein by reference to Exhibit 1 to the Quarterly
Report on Form 10-Q of Alpine for the quarter ended January 31, 1989)..........................
3(d) Certificate of the Powers, Designations, Preferences and Rights of the 9% Cumulative Convertible
Senior Preferred Stock of Alpine (incorporated herein by reference to Exhibit 3(c) to the
Annual Report on Form 10-K of Alpine for the fiscal year ended April 30, 1992 ("1992 10-K"))...
3(e) Certificate of the Powers, Designations, Preferences and Rights of the 8.5% Cumulative
Convertible Senior Preferred Stock of Alpine (incorporated herein by reference to Exhibit 3(e)
to the Annual Report on Form 10-K of Alpine for the Fiscal year ended April 30, 1994)..........
3(f) Certificate of the Powers, Designations, Preferences and Rights of the 8% Cumulative Convertible
Senior Preferred Stock of the Company (incorporated herein by reference to Exhibit 3(f) to the
1995 10-K).....................................................................................
3(g) By-laws of Alpine (incorporated herein by reference to Exhibit 3(g) to the 1995 10-K)...........
3(h)* Certificate of Incorporation of Adience
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
--------- ------------------------------------------------------------------------------------------------ -----
<S> <C> <C>
3(i)* By-laws of Adience
3(j)* Articles of Incorporation of Superior Telecommunications Inc.
3(k)* By-laws of Superior Telecommunications Inc., as amended
4(a) Indenture, dated as of October 1, 1986, between Alpine and Manufacturers Hanover Trust Company
("MHTC"), as trustee, relating to the 13 1/2% Senior Subordinated Debentures due 1996 of the
Company (incorporated herein by reference to Exhibit 4 to Amendment No. 2 to the Registration
Statement on Form S-1 (Registration No. 33-7709) of Alpine, as filed with the Commission on
October 3, 1986)...............................................................................
4(b) First Supplemental Indenture to the above Indenture, dated as of February 3, 1989, between
Alpine and MHTC, as trustee (incorporated herein by reference to Exhibit 4(b) to the 1995
10-K)..........................................................................................
4(c) Second Supplemental Indenture to the above Indenture, dated as of October 31, 1989, between
Alpine and MHTC, as trustee (incorporated herein by reference to Exhibit 4(c) to the 1995
10-K)..........................................................................................
4(d) Indenture, dated as of October 31, 1989, between Alpine and IBJ Schroder Bank & Trust Company
("IBJ"), as trustee, relating to the Convertible Secured Senior Subordinated Notes due July 31,
1996, of Alpine (incorporated herein by reference to Exhibit 4(d) to the 1995 10-K)............
4(e) First Supplemental Indenture to the above Indenture, dated as of March 28, 1991, between Alpine
and IBJ, as trustee (incorporated herein by reference to Exhibit 4 to the Current Report on
Form 8-K of Alpine dated April 10, 1991 (the "April 1991 8-K"))................................
4(f) Second Supplemental Indenture to the above Indenture, dated as of April 10, 1992, between Alpine
and IBJ, as trustee (incorporated herein by reference to Exhibit 4(f) to the 1992 10-K)........
4(g) Indenture, dated as of June 30, 1993, between Adience, Inc. ("Adience") and IBJ, as trustee
(incorporated herein by reference to Registration Statement No. 33-72024 of Adience, Inc.).....
4(h) Supplemental Indenture, dated as of July 21, 1995, to Indenture by and between Adience and IBJ
dated as of June 30, 1995 (incorporated herein by reference to Exhibit 10(cc) to the 1995
10-K)..........................................................................................
4(i) Indenture, dated as of July 15, 1995, by and among Alpine, Adience, Superior Telecommunications
Inc., Superior Cable Corporation and Marine Midland Bank ("Marine Midland"), as trustee
(incorporated herein by reference to Exhibit 10(ee) to the 1995 10-K)
4(j)* Registration Rights Agreement, dated as of July 21, 1995, by and among Alpine, Adience, Superior
Telecommunications Inc., Superior Cable Corporation, Merrill Lynch Co., Nomura Securities
International, Inc. and First Albany Corporation
4(k)* Form of Old Note
4(l)* Form of New Note
5 Opinion of Proskauer Rose Goetz & Mendelsohn LLP re: validity of securities.....................
8 Opinion of Proskauer Rose Goetz & Mendelsohn LLP re: certain federal income tax consequences
(contained in opinion to be filed as Exhibit 5)................................................
10(a) Amended and Restated 1984 Restricted Stock Plan of Alpine (incorporated herein by reference to
Exhibit 10.5 to Form S-4 (Registration No. 33-9978) of Alpine, as filed with the Commission on
October 5, 1993 (the "S-4 Registration Statement"))............................................
10(b) Amended and Restated 1987 Long Term Equity Incentive Plan of Alpine (incorporated herein by
reference to Exhibit 10.4 to the S-4 Registration Statement)...................................
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
--------- ------------------------------------------------------------------------------------------------ -----
<S> <C> <C>
10(c) Stock Purchase Agreement, dated as of February 14, 1992, by and between Alpine and Dataproducts
Corporation, relating to the purchase of shares of capital stock of DNE Technologies, Inc.
("DNE") (incorporated herein by reference to Exhibit 1 to the Current Report on Form 8-K of
Alpine dated March 2, 1992 (the "March 1992 8-K")).............................................
10(d) Loan Agreement, dated as of February 13, 1992, by and among Alpine, DNE and the Connecticut
Development Authority (incorporated herein by reference to Exhibit 3 to the March 1992 8-K)....
10(e) Agreement and Plan of Merger by and between Alpine and Superior TeleTec In., dated as of June
17, 1993 and amended on September 24, 1993 (incorporated herein by reference to Exhibit 2 to
the S-4 Registration Statement)................................................................
10(f) Exchange Agreement, dated June 17, 1993 by and among Alpine, PV Partners, Suez Ventures, EUROC,
and Samuel Montagu Finance (incorporated herein by reference to Exhibit 10.1 to the S-4
Registration Statement)........................................................................
10(g) Development Agreement between Connecticut Innovations Incorporated and Alpine/ PolyVision, Inc.,
dated as of December 9, 1992 (incorporated herein by reference to Exhibit 10(z) to the Annual
Report on Form 10-K of Alpine for the fiscal year ended April 30, 1993 (the "1993 10-K"))......
10(h) Loan Agreement between Connecticut Development Authority and Alpine/PolyVision, Inc., dated as
of December 9, 1992 (incorporated herein by reference to Exhibit 10(aa) to the 1993 10-K)......
10(i) Master Credit Agreement, dated October 19, 1993 and amended on November 10, 1993, by and among
Superior TeleTec Transmission Products Inc., as borrower, Alpine, as guarantor, Bank of Boston
Connecticut and Creditanstalt-Bankverein, as the banks, and Bank of Boston Connecticut, as the
agent (incorporated herein by reference to Exhibit 10(a) to the Current Report on Form 8-K of
Alpine dated November 24, 1993)................................................................
10(j) Lease Agreement by and between ALP(TX) QRS 11-28, Inc., and Superior TeleTec Transmission
Products, Inc., dated as of December 16, 1993 (incorporated herein by reference to Exhibit (i)
to the Quarterly Report on Form 10-Q of Alpine for the Quarter ended January 31, 1994).........
10(k) Amended and Restated Debt Exchange Agreement, dated as of October 11, 1994, among Alpine and
certain debtholders of Adience as listed therein (as amended through April 14, 1995)
(incorporated herein by reference to Exhibit 10(k) to the 1995 10-K)...........................
10(l) Note Purchase Agreement by and among Alpine, Superior TeleTec, Inc., Superior Cable Corporation
and Nomura International Trust Company (incorporated herein by reference to Exhibit 3 to
Alpine's Current Report on Form 8-K dated May 24, 1995)........................................
10(m) Letter Agreement, dated May 24, 1995 by and between Alpine and PolyVision Corporation
("PolyVision") relating to $5,000,000 credit commitment (incorporated herein by reference to
Exhibit 10(m) to the 1995 10-K)................................................................
10(n) Letter Agreement, dated May 24, 1995, by and between Alpine and PolyVision relating to
$2,500,000 credit commitment (incorporated herein by reference to Exhibit 10(n) to the 1995
10-K)..........................................................................................
10(o) First Amendment to Lease Agreement, dated as of May 10, 1995, by and between ALP (TX) QRS 11-28,
Inc. and Superior Teletec Inc. (incorporated herein by reference to Exhibit 10(o) to the 1995
10-K)..........................................................................................
10(p) Purchase Agreement, dated as of July 14, 1995, by and among Alpine, Adience, Superior
Telecommunications Inc., Superior Cable Corporation, Merrill Lynch & Co., Nomura Securities
International, Inc. and First Albany Corporation (incorporated herein by reference to Exhibit
10(p) to the 1995 10-K)........................................................................
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
--------- ------------------------------------------------------------------------------------------------ -----
<S> <C> <C>
10(q) Employment Agreement, dated as of September 8, 1993, by and between Alpine and Steven S. Elbaum
(incorporated herein by reference to Exhibit 10(q) to the 1995 10-K)...........................
10(r) Amendment to Employment Agreement, dated as of September 8, 1993, by and between Alpine and
Steven S. Elbaum (incorporated herein by reference to Exhibit 10(r) to the 1995 10-K)..........
10(s) Employment Agreement, dated as of September 8, 1993, by and between Alpine and Bragi F. Schut
(incorporated herein by reference to Exhibit 10(s) to the 1995 10-K)...........................
10(t) Amendment to Employment Agreement, dated as of September 8, 1993, by and between Alpine and
Bragi F. Schut (incorporated herein by reference to Exhibit 10(t) to the 1995 10-K)............
10(u) Employment Agreement, dated as of November 10, 1993, by and between Alpine and David S. Aldridge
(incorporated herein by reference to Exhibit 10(u) to the 1995 10-K)...........................
10(v) Employment Agreement, dated as of November 10, 1993, by and between Alpine and James R. Kanely
(incorporated herein by reference to Exhibit 10(v) to the 1995 10-K)...........................
10(w) Employment Agreement, dated as of November 10, 1993, by and between Alpine and Justin F. Deedy,
Jr. (incorporated herein by reference to Exhibit 10(w) to the 1995 10-K).......................
10(x) Second Amendment to Lease Agreement, dated as of July 21, 1995, by and between ALP(TX) ORS H-28,
Inc. and Superior Telecommunications Inc. (incorporated herein by reference to Exhibit 10(x) to
the 1995 10-K).................................................................................
10(y) Loan and Security Agreement, dated as of July 21, 1995, by and between Alpine, Shawmut Capital
Corporation, Nationsbank of Georgia, N.A., and Creditanstalt Corporation Finance, Inc.
(incorporated herein by reference to Exhibit 10(y) to the 1995 10-K)...........................
10(z) Amendment to Employment Agreement, dated as of November 10, 1993, by and between Alpine and
Justin F. Deedy, Jr. (incorporated herein by reference to Exhibit 10(z) to the 1995 10-K)......
10(aa) Amendment to Employment Agreement, dated as of November 10, 1993, by and between Alpine and
David S. Aldridge (incorporated herein by reference to Exhibit 10(aa) to the 1995 10-K)........
10(bb) Amendment dated as of June 30, 1995, to Amended and Restated Debt Exchange Agreement dated as of
October 11, 1984, among Alpine and certain debtholders of Adience as listed therein
(incorporated herein by reference to Exhibit 10(bb) to the 1995 10-K)..........................
10(cc) Amendment to the Employment Agreement, dated as of November 10, 1993, by and between Alpine and
James R. Kanely (incorporated herein by reference to Exhibit 10(cc) to the 1995 10-K)..........
10(dd) Pledge Agreement, dated as of July 21, 1995, by and between Alpine and Marine Midland
(incorporated herein by reference to Exhibit 10(dd) to the 1995 10-K)..........................
12 Statement re computation of ratios (incorporated herein by reference to Exhibit 12 to the 1995
10-K)..........................................................................................
21 List of Subsidiaries (incorporated herein by reference to Exhibit 21 to the 1995 10-K)..........
23(a)* Consent of Arthur Andersen LLP (Alpine)
23(b)* Consent of Price Waterhouse LLP (Adience)
23(c) Consent of Proskauer Rose Goetz & Mendelsohn LLP (contained in opinion to be filed as Exhibit
5).............................................................................................
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
--------- ------------------------------------------------------------------------------------------------ -----
<S> <C> <C>
24* Power of Attorney
25* Statement of eligibility of trustee
27 (incorporated herein by reference to Exhibit 27 to the 1995 10-K)...............................
<FN>
------------------------
* Filed herewith
</TABLE>
<PAGE>
CERTIFICATE OF INCORPORATION
OF
ADIENCE, INC.
(as in effect on August 16, 1995)
FIRST. The name of the Corporation is Adience, Inc.
SECOND. The address of the Corporation's registered office in the
State of Delaware is 32 Loockerman Square, Suite L-100, in the City of Dover,
County of Kent. The name of its registered agent at such address is The
Prentice-Hall Corporation System, Inc.
THIRD. The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH. The total number of shares of stock which the Corporation
shall have authority to issue is 1,000 shares of common stock of the par value
of $1.00 per share, all of the same class.
FIFTH. (1) The name and mailing address of the incorporator is
Alex S. Navarro, c/o Proskauer Rose Goetz & Mendelsohn, 1585 Broadway, New
York, N.Y. 10036.
(2) The powers of the incorporator are to terminate upon
the filing of this Certificate of Incorporation. The name and mailing address
of the person who is to serve as a director until the first annual meeting of
stockholders or until his successor has been elected and qualified is as
follows:
Name Mailing Address
---- ---------------
Bragi F. Schut c/o The Alpine Group, Inc.
1790 Broadway
New York, N.Y. 10019
SIXTH. Election of directors need not be by written ballot.
SEVENTH. The Board of Directors is authorized to adopt, amend, or
repeal the By-Laws of the Corporation.
EIGHTH. Any person who was or is a party or is threatened to be made
a party to any threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative (whether or not by or
in the
<PAGE>
right of the Corporation) by reason of the fact that he is or was a director,
officer, incorporator, employee, or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, incorporator,
employee, partner, trustee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise (including an employee benefit plan), shall
be entitled to be indemnified by the Corporation to the full extent then
permitted by law against expenses (including counsel fees and disbursements),
judgments, fines (including excise taxes assessed on a person with respect to an
employee benefit plan), and amounts paid in settlement incurred by him in
connection with such action, suit, or proceeding. Such right of indemnification
shall inure whether or not the claim asserted is based on matters which antedate
the adoption of this Article EIGHTH. Such right of indemnification shall
continue as to a person who has ceased to be a director, officer, incorporator,
employee, partner, trustee, or agent and shall inure to the benefit of the heirs
and personal representatives of such a person. The indemnification provided by
this Article EIGHTH shall not be deemed exclusive of any other rights which may
be provided now or in the future under any provision currently in effect or
hereafter adopted of the By-Laws, by any agreement, by vote of stockholders, by
resolution of disinterested directors, by provision of law, or otherwise.
NINTH. No director of the Corporation shall be liable to the
Corporation or any of its stockholders for monetary damages for breach of
fiduciary duty as a director, provided that this provision does not eliminate
the liability of the director (i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of Title 8 of the Delaware Code, or (iv) for any
transaction from which the director derived an improper personal benefit. For
purposes of the prior sentence, the term "damages" shall, to the extent
permitted by law, include without limitation, any judgment, fine, amount paid in
settlement, penalty, punitive damages, excise or other tax assessed with respect
to an employee benefit plan, or expense of any nature (including, without
limitation, counsel fees and disbursements). Each person who serves as a
director of the Corporation while this Article NINTH is in effect shall be
deemed to be doing so in reliance on the provisions of this Article NINTH, and
neither the amendment or repeal of this Article NINTH nor the adoption of any
provision of this Certificate of Incorporation inconsistent with this Article
NINTH, shall apply to or have any effect on the liability or alleged liability
of any director of the Corporation for, arising out of, based upon, or in
connection with any acts or omissions of such director occurring prior to such
amendment, repeal, or adoption of an inconsistent provision. The provisions of
this Article NINTH are cumulative and shall be in addition to and independent of
any and all other limitations on or eliminations
<PAGE>
of the liabilities of directors of the Corporation, as such, whether such
limitations or eliminations arise under or are created by any law, rule,
regulation, by-law, agreement, vote of stockholders or disinterested directors,
or otherwise.
TENTH. Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on this Corporation.
<PAGE>
BY-LAWS
OF
ADIENCE, INC.
1. MEETINGS OF STOCKHOLDERS.
1.1 ANNUAL MEETING. The annual meeting of stock-holders shall be
held on the first Monday of May in each year, or as soon thereafter as
practicable, and shall be held at a place and time determined by the board of
directors (the "Board").
1.2 SPECIAL MEETINGS. Special meetings of the stockholders may be
called by resolution of the Board or the president and shall be called by the
president or secretary upon the written request (stating the purpose or purposes
of the meeting) of a majority of the directors then in office or of the holders
of a majority of the outstanding shares entitled to vote. Only business related
to the purposes set forth in the notice of the meeting may be transacted at a
special meeting.
1.3 PLACE AND TIME OF MEETINGS. Meetings of the stockholders may be
held in or outside Delaware at the place and time specified by the Board or the
officers or stockholders requesting the meeting.
1.4 NOTICE OF MEETINGS; WAIVER OF NOTICE. Written notice of each
meeting of stockholders shall be given to each stockholder entitled to vote at
the meeting, except that (a) it shall not be necessary to give notice to any
stockholder who
<PAGE>
submits a signed waiver of notice before or after the meeting, and (b) no notice
of an adjourned meeting need be given, except when required under section 1.5
below or by law. Each notice of a meeting shall be given, personally or by
mail, not fewer than 10 nor more than 60 days before the meeting and shall state
the time and place of the meeting, and, unless it is the annual meeting, shall
state at whose direction or request the meeting is called and the purposes for
which it is called. If mailed, notice shall be considered given when mailed to
a stockholder at his address on the corporation's records. The attendance of
any stockholder at a meeting, without protesting at the beginning of the meeting
that the meeting is not lawfully called or convened, shall constitute a waiver
of notice by him.
1.5 QUORUM. At any meeting of stockholders, the presence in person
or by proxy of the holders of a majority of the shares entitled to vote shall
constitute a quorum for the transaction of any business. In the absence of a
quorum, a majority in voting interest of those present or, if no stockholders
are present, any officer entitled to preside at or to act as secretary of the
meeting, may adjourn the meeting until a quorum is present. At any adjourned
meeting at which a quorum is present, any action may be taken that might have
been taken at the meeting as originally called. No notice of an adjourned
meeting need be given, if the time and place are announced at the meeting at
which the adjournment is taken, except that, if adjournment is for more than 30
days or if, after the
<PAGE>
adjournment, a new record date is fixed for the meeting, notice of the adjourned
meeting shall be given pursuant to section 1.4.
1.6 VOTING; PROXIES. Each stockholder of record shall be entitled to
one vote for each share registered in his name. Corporate action to be taken by
stockholder vote, other than the election of directors, shall be authorized by a
majority of the votes cast at a meeting of stockholders, except as otherwise
provided by law or by section 1.8. Directors shall be elected in the manner
provided in section 2.1. Voting need not be by ballot, unless requested by a
majority of the stockholders entitled to vote at the meeting or ordered by the
chairman of the meeting. Each stockholder entitled to vote at any meeting of
stockholders or to express consent to or dissent from corporate action in
writing without a meeting may authorize another person to act for him by proxy.
No proxy shall be valid after three years from its date, unless it provides
otherwise.
1.7 LIST OF STOCKHOLDERS. Not fewer than 10 days prior to the date
of any meeting of stockholders, the secretary of the corporation shall prepare a
complete list of stockholders entitled to vote at the meeting, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in his name. For a period of not fewer than 10 days prior to
the meeting, the list shall be available during ordinary business hours for
inspection by any stockholder for any purpose germane to the meeting. During
this period, the list shall be kept either (a) at a place within the city where
the
<PAGE>
meeting is to be held, if that place shall have been specified in the notice of
the meeting, or (b) if not so specified, at the place where the meeting is to be
held. The list shall also be available for inspection by stockholders at the
time and place of the meeting.
1.8 ACTION BY CONSENT WITHOUT A MEETING. Any action required or
permitted to be taken at any meeting of stockholders may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
stock having not fewer than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voting. Prompt notice of the taking of any such
action shall be given to those stockholders who did not consent in writing.
2. BOARD OF DIRECTORS.
2.1 NUMBER, QUALIFICATION, ELECTION AND TERM OF DIRECTORS. The
business of the corporation shall be managed by the entire Board, which
initially shall consist of one director. The number of directors may be changed
by resolution of a majority of the Board or by the stockholders, but no decrease
may shorten the term of any incumbent director. Directors shall be elected at
each annual meeting of stockholders by a plurality of the votes cast and shall
hold office until the next annual meeting of stockholders and until the election
and qualification of their respective successors, subject to the provisions of
<PAGE>
section 2.9. As used in these by-laws, the term "entire Board" means the total
number of directors the corporation would have, if there were no vacancies on
the Board.
2.2 QUORUM AND MANNER OF ACTING. A majority of the entire Board
shall constitute a quorum for the transaction of business at any meeting, except
as provided in section 2.10. Action of the Board shall be authorized by the
vote of the majority of the directors present at the time of the vote, if there
is a quorum, unless otherwise provided by law or these by-laws. In the absence
of a quorum, a majority of the directors present may adjourn any meeting from
time to time until a quorum is present.
2.3 PLACE OF MEETINGS. Meetings of the Board may be held in or
outside Delaware.
2.4 ANNUAL AND REGULAR MEETINGS. Annual meetings of the Board, for
the election of officers and consideration of other matters, shall be held
either (a) without notice immediately after the annual meeting of stockholders
and at the same place, or (b) as soon as practicable after the annual meeting of
stockholders, on notice as provided in section 2.6. Regular meetings of the
Board may be held without notice at such times and places as the Board
determines. If the day fixed for a regular meeting is a legal holiday, the
meeting shall be held on the next business day.
<PAGE>
2.5 SPECIAL MEETINGS. Special meetings of the Board may be called by
the president or by a majority of the directors.
2.6 NOTICE OF MEETINGS; WAIVER OF NOTICE. Notice of the time and
place of each special meeting of the Board, and of each annual meeting not held
immediately after the annual meeting of stockholders and at the same place,
shall be given to each director by mailing it to him at his residence or usual
place of business at least three days before the meeting, or by delivering or
telephoning or telegraphing it to him at least two days before the meeting.
Notice of a special meeting also shall state the purpose or purposes for which
the meeting is called. Notice need not be given to any director who submits a
signed waiver of notice before or after the meeting or who attends the meeting
without protesting at the beginning of the meeting the transaction of any
business because the meeting was not lawfully called or convened. Notice of any
adjourned meeting need not be given, other than by announcement at the meeting
at which the adjournment is taken.
2.7 BOARD OR COMMITTEE ACTION WITHOUT A MEETING. Any action required
or permitted to be taken by the Board or by any committee of the Board may be
taken without a meeting, if all the members of the Board or the committee
consent in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the Board or the committee
shall be filed with the minutes of the proceedings of the Board or the
committee.
<PAGE>
2.8 PARTICIPATION IN BOARD OR COMMITTEE MEETINGS BY CONFERENCE
TELEPHONE. Any or all members of the Board or any committee of the Board may
participate in a meeting of the Board or the committee by means of a conference
telephone or similar communications equipment allowing all persons participating
in the meeting to hear each other at the same time. Participation by such means
shall constitute presence in person at the meeting.
2.9 RESIGNATION AND REMOVAL OF DIRECTORS. Any director may resign at
any time by delivering his resignation in writing to the president or secretary
of the corporation, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective. Any or all of the directors may be removed at
any time, either with or without cause, by vote of the stockholders.
2.10 VACANCIES. Any vacancy in the Board, including one created by
an increase in the number of directors, may be filled for the unexpired term by
a majority vote of the remaining directors, though less than a quorum.
2.11 COMPENSATION. Directors shall receive such compensation as the
Board determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director also may be paid
for serving the corporation or its affiliates or subsidiaries in other
capacities.
<PAGE>
3. COMMITTEES.
3.1 EXECUTIVE COMMITTEE. The Board, by resolution adopted by a
majority of the entire Board, may designate an executive committee of one or
more directors, which shall have all the powers and authority of the Board,
except as otherwise provided in the resolution, section 141(c) of the General
Corporation Law of Delaware or any other applicable law. The members of the
executive committee shall serve at the pleasure of the Board. All action of the
executive committee shall be reported to the Board at its next meeting.
3.2 OTHER COMMITTEES. The Board, by resolution adopted by a majority
of the entire Board, may designate other committees of one or more directors,
which shall serve at the Board's pleasure and have such powers and duties as the
Board determines.
3.3 RULES APPLICABLE TO COMMITTEES. The Board may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. In case of the absence
or disqualification of any member of a committee, the member or members present
at a meeting of the committee and not disqualified, whether or not a quorum, may
unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of a committee shall be reported to
the Board at its next meeting. Each committee shall adopt
<PAGE>
rules of procedure and shall meet as provided by those rules or by resolutions
of the Board.
4. OFFICERS.
4.1 NUMBER; SECURITY. The executive officers of the corporation
shall be the president, one or more vice presidents (including an executive vice
president, if the Board so determines), a secretary and a treasurer. Any two or
more offices may be held by the same person. The board may require any officer,
agent or employee to give security for the faithful performance of his duties.
4.2 ELECTION; TERM OF OFFICE. The executive officers of the
corporation shall be elected annually by the Board, and each such officer shall
hold office until the next annual meeting of the Board and until the election of
his successor, subject to the provisions of section 4.4.
4.3 SUBORDINATE OFFICERS. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or employees,
each of whom shall hold office for such period and have such powers and duties
as the Board determines. The Board may delegate to any executive officer or
committee the power to appoint and define the powers and duties of any
subordinate officers, agents or employees.
4.4 RESIGNATION AND REMOVAL OF OFFICERS. Any officer may resign at
any time by delivering his resignation in writing to the president or secretary
of the corporation, to take effect
<PAGE>
at the time specified in the resignation; the acceptance of a resignation,
unless required by its terms, shall not be necessary to make it effective. Any
officer elected or appointed by the Board or appointed by an executive officer
or by a committee may be removed by the Board either with or without cause, and
in the case of an officer appointed by an executive officer or by a committee,
by the officer or committee that appointed him or by the president.
4.5 VACANCIES. A vacancy in any office may be filled for the
unexpired term in the manner prescribed in sections 4.2 and 4.3 for election or
appointment to the office.
4.6 THE PRESIDENT. The president shall be the chief executive
officer of the corporation. Subject to the control of the Board, he shall have
general supervision over the business of the corporation and shall have such
other powers and duties as presidents of corporations usually have or as the
Board assigns to him.
4.7 VICE PRESIDENT. Each vice president shall have such powers and
duties as the Board or the president assigns to him.
4.8 THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall be in charge of the corporation's books and
accounts. Subject to the control of the Board, he shall have such other powers
and duties as the Board or the president assigns to him.
<PAGE>
4.9 THE SECRETARY. The secretary shall be the secretary of, and keep
the minutes of, all meetings of the Board and the stockholders, shall be
responsible for giving notice of all meetings of stockholders and the Board, and
shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have
such powers and duties as the Board or the president assigns to him. In the
absence of the secretary from any meeting, the minutes shall be kept by the
person appointed for that purpose by the presiding officer.
4.10 SALARIES. The Board may fix the officers' salaries, if any, or
it may authorize the president to fix the salary of any other officer.
5. SHARES.
5.1 CERTIFICATES. The corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be
signed by the president or a vice president, and by the secretary or an
assistant secretary or the treasurer or an assistant treasurer, and shall be
sealed with the corporation's seal or a facsimile of the seal. Any or all of
the signatures on the certificate may be a facsimile.
5.2 TRANSFERS. Shares shall be transferable only on the
corporation's books, upon surrender of the certificate for the shares, properly
endorsed. The Board may require
<PAGE>
satisfactory surety before issuing a new certificate to replace a certificate
claimed to have been lost or destroyed.
5.3 DETERMINATION OF STOCKHOLDERS OF RECORD. The Board may fix, in
advance, a date as the record date for the determination of stockholders
entitled to notice of or to vote at any meeting of the stockholders, or to
express consent to or dissent from any proposal without a meeting, or to receive
payment of any dividend or the allotment of any rights, or for the purpose of
any other action. The record date may not be more than 60 or fewer than 10 days
before the date of the meeting or more than 60 days before any other action.
6. INDEMNIFICATION AND INSURANCE.
6.1 RIGHT TO INDEMNIFICATION. Each person who was or is a party or
is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
"proceeding"), by reason of the fact that he, or a person of whom he is the
legal representative, is or was a director or officer of the corporation or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action or inaction in an
official capacity or in any other capacity while serving as director, officer,
employee or agent, shall be
<PAGE>
indemnified and held harmless by the corporation to the fullest extent permitted
by the General Corporation Law of Delaware, as amended from time to time,
against all costs, charges, expenses, liabilities and losses (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) reasonably incurred or suffered by such person
in connection therewith, and that indemnification shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of his heirs, executors and administrators; provided, however, that,
except as provided in section 6.2, the corporation shall indemnify any such
person seeking indemnification in connection with a proceeding (or part thereof)
initiated by that person, only if that proceeding (or part thereof) was
authorized by the Board. The right to indemnification conferred in these by-
laws shall be a contract right and shall include the right to be paid by the
corporation the expenses incurred in defending any such proceeding in advance of
its final disposition; provided, however, that, if the General Corporation Law
of Delaware, as amended from time to time, requires, the payment of such
expenses incurred by a director or officer in his capacity as a director or
officer (and not in any other capacity in which service was or is rendered by
that person while a director or officer, including, without limitation, service
to an employee benefit plan) in advance of the final disposition of a proceeding
shall be made only upon delivery to the corporation of an undertaking, by or on
behalf of such director or officer, to repay all amounts
<PAGE>
so advanced, if it shall ultimately be determined that such director or officer
is not entitled to be indemnified under these by-laws or otherwise. The
corporation may, by action of its Board, provide indemnification to employees
and agents of the corporation with the same scope and effect as the foregoing
indemnification of directors and officers.
6.2 RIGHT OF CLAIMANT TO BRING SUIT. If a claim under section 6.1 is
not paid in full by the corporation within 30 days after a written claim has
been received by the corporation, the claimant may at any time thereafter bring
suit against the corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant also shall be entitled to be paid
the expense of prosecuting that claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition, where the required
undertaking, if any, is required and has been tendered to the corporation) that
the claimant has failed to meet a standard of conduct that makes it permissible
under Delaware law for the corporation to indemnify the claimant for the amount
claimed. Neither the failure of the corporation (including its Board, its
independent legal counsel or its stockholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant is
permissible in the circumstances because he has met that standard of conduct,
nor an actual determination by the corporation (including its Board, its
<PAGE>
independent counsel or its stockholders) that the claimant has not met that
standard of conduct, shall be a defense to the action or create a presumption
that the claimant has failed to meet that standard of conduct.
6.3 NON-EXCLUSIVITY OF RIGHTS. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this section 6 shall not be exclusive of any other
right any person may have or hereafter acquire under any statute, provision of
the certificate of incorporation, by-law, agreement, vote of stockholders or
disinterested directors or otherwise.
6.4 INSURANCE. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against that expense,
liability or loss under Delaware law.
6.5 EXPENSES AS A WITNESS. To the extent any director, officer,
employee or agent of the corporation is by reason of such position, or a
position with another entity at the request of the corporation, a witness in any
action, suit or proceeding, he shall be indemnified against all costs and
<PAGE>
expenses actually and reasonably incurred by him or on his behalf in connection
therewith.
6.6 INDEMNITY AGREEMENTS. The corporation may enter into agreement
with any director, officer, employee or agent of the corporation providing for
indemnification to the fullest extent permitted by Delaware law.
7. MISCELLANEOUS.
7.1 SEAL. The Board shall adopt a corporate seal, which shall be in
the form of a circle and shall bear the corporation's name and the year and
state in which it was incorporated.
7.2 FISCAL YEAR. The Board may determine the corporation's fiscal
year. Until changed by the Board, the last day of the corporation's fiscal year
shall be June 30.
7.3 VOTING OF SHARES IN OTHER CORPORATIONS. Shares in other
corporations held by the corporation may be represented and voted by an officer
of this corporation or by a proxy or proxies appointed by one of them. The
Board may, however, appoint some other person to vote the shares.
7.4 AMENDMENTS. By-laws may be amended, repealed or adopted by the
stockholders.
<PAGE>
ARTICLES OF INCORPORATION OF
SUPERIOR CABLE CORPORATION
I.
The name of the Corporation is:
SUPERIOR CABLE CORPORATION
II.
The Corporation is organized pursuant to the provisions of the Georgia
Business Corporation Code.
III.
The Corporation shall have perpetual duration.
IV.
The object of the Corporation is pecuniary gain and profit. The
Corporation is formed for the purpose of the transaction of any or all lawful
business for which corporations may be now or hereafter incorporated under the
Georgia Business Corporation Code and any other lawful business that the Board
of Directors of the Corporation from time to time may authorize.
In furtherance of, and not in limitation of, the general powers conferred
by the laws of the State of Georgia and the objects and purposes herein set
forth, it is expressly provided that to the extent that a corporation organized
under the Georgia Business Corporation Code may now or hereafter lawfully do so,
the Corporation shall have the power to do (either as principal or agent and
either alone or in connection with other corporations, firms or individuals) any
and all things necessary, suitable, convenient or proper for, or in connection
with, or incident to, the accomplishment of any of the purposes or the
attainment of any one or more of the objects herein enumerated, or designed
directly or indirectly to promote the interests of the Corporation or to enhance
the value of its properties; and in general to do any and all things and
exercise any and all powers, rights and privileges that a corporation may now or
hereafter be authorized to do or to exercise under the Georgia Business
Corporation Code or under any act amendatory thereof, supplemental thereto or
substituted therefor.
The foregoing provisions of this Article IV shall be construed both as
purposes and powers and each as an independent purpose and power. The foregoing
enumeration of specific purposes and powers herein specified shall, except when
otherwise provided in this Article IV, be in no way limited or restricted
<PAGE>
by reference to, or inference from the terms of any provision of this or any
other article of these Articles of Incorporation.
V.
The aggregate number of shares that the Corporation shall have authority to
issue is 10,000, all of which shall be common shares of $.01 par value per
share.
VI.
Shares of the Corporation may be issued by the Corporation for such
consideration, not less than the par value thereof, as shall be fixed from time
to time by the Board of Directors.
VII.
The Corporation shall be entitled to purchase its own shares out of its
unreserved and unrestricted earned and capital surplus available therefor.
VIII.
The Corporation shall be entitled to distribute a portion of its assets to
its shareholders out of capital surplus available therefor.
IX.
The Corporation shall not commence business until it shall have received
$500 in payment for the issuance of shares of stock.
X.
No shareholder shall have any preemptive right to subscribe for or to
purchase any shares or other securities issued by the Corporation.
XI.
The initial registered office of the Corporation is located at 5901
Peachtree-Dunwoody Road, Atlanta, Georgia 30328 and its initial registered agent
at such address is David S. Aldridge.
<PAGE>
XII.
The initial Board of Directors shall consist of three members whose names
and addresses are as follows:
James R. Kanely
5901-B Peachtree-Dunwoody Road
Atlanta, Georgia 30328
T.M. McMillan
5901-B Peachtree-Dunwoody Road
Atlanta, Georgia 30328
David S. Aldridge
5901-B Peachtree-Dunwoody Road
Atlanta, Georgia 30328
XIII.
The name and address of the incorporator is:
David S. Aldridge
5901 Peachtree-Dunwoody Road
Atlanta, Georgia 30328
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Incorporation.
Alan C. Leet, Esq.
_____________________
Attorneys for Incorporator
<PAGE>
ARTICLES OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
OF
SUPERIOR CABLE CORPORATION
The sole shareholder of SUPERIOR CABLE CORPORATION, a corporation organized
and existing under the laws of the State of Georgia, did on the 23rd day of
March, 1987, adopt the following amendments to the Articles of Incorporation of
said corporation:
1. Article V of the Articles of Incorporation is replaced in its entirety
by the following:
V.
The aggregate number of shares of all classes of stock that the
Corporation shall have the authority to issue shall be Fifteen
Thousand (15,000), of which Five Thousand (5,000) shares shall be
Preferred Stock, par value $1,000.00 per share, issuable in one or
more series, and Ten Thousand (10,000) shares shall be Common Stock,
par value $0.01 per share.
Section 1. Authority is hereby expressly granted to the Board of
Directors of the Corporation from time to time to issue the Preferred
Stock, for such consideration and on such terms as it may determine,
in one or more series, and in connection with the creation of any such
series to fix, by the resolution or resolutions providing for the
issuance of shares thereof, the designation, powers and relative
participating, optional or other special rights of such series and the
qualifications, limitations or restrictions thereof. Such authority
of the Board of Directors with respect to each such series shall
include, but not be limited to, the determination of the following:
(a) the distinctive designation of, and the number of
shares comprising, such series, which number may be
increased (except as otherwise provided by the Board of
Directors in the resolution or resolutions creating such
series) or decreased (but not below the number of shares
thereof then outstanding) from time to time by like action
of the Board of Directors;
<PAGE>
(b) the dividend rate or amount for such series, the
conditions and dates upon which such dividends shall be
payable, the relation that such dividends shall bear to the
dividends payable on any other class or classes or any other
series of any class or classes of stock and whether such
dividends shall be cumulative and if so, from which date or
dates such dividends shall be accumulated;
(c) whether or not the shares of such series shall be
subject to redemption by the Corporation and the times, prices
and other terms and conditions of such redemption;
(d) whether or not the shares of such series shall be
subject to the operation of a sinking fund or purchase fund
to be applied to the redemption or purchase of such shares
and if such a fund is to be established, the amount thereof
and the terms and provisions for the application thereof;
(e) whether or not the shares of such series shall be
convertible into or exchangeable for shares of any other
class or classes, or shares of any other series of any class
or classes, of stock of the Corporation, or for any other
securities, and if provision is made for conversion or
exchange, the times, places, rates, adjustments and other
terms and conditions of such conversion or exchange;
(f) whether or not the shares of such series shall
have voting rights, in addition to the voting rights
provided by law, and if they are to have such additional
voting rights, the extent thereof;
(g) the rights of the shares of such series in the
event of any liquidation, dissolution or winding up of the
Corporation or upon any distribution of its assets; and
(h) any other powers, preferences and relative,
participating, optional or other special rights of the
shares of such series, and the qualifications, limitations
or restrictions thereof, to the full extent now or hereafter
permitted by law and not inconsistent with the provisions
hereof.
2
<PAGE>
Section 2. Authority is hereby expressly granted to the Board of
Directors from time to time to issue authorized but unissued shares of
Common Stock for such consideration and on such terms as it may
determine.
Section 3. All shares of any one series of Preferred Stock shall
be identical in all respects except as to the dates from which
dividends thereon may be cumulative. Except as otherwise provided in
the resolution or resolutions providing for the issuance of any series
of Preferred Stock, all series of the Preferred Stock shall rank
equally and be identical in all respects.
Section 4. Except as otherwise required by law or provided by a
resolution or resolutions of the Board of Directors creating any
series of Preferred Stock, the holders of Common Stock shall have the
exclusive power to vote and shall have one vote in respect of each
share of such stock held by them and the holders of Preferred Stock
shall have no voting power whatsoever.
2. Article VI of the Articles of Incorporation is deleted in its
entirety, and Articles VII through XII are renumbered as Articles VI through XI,
respectively.
These Amendments were adopted by the unanimous written consent of the sole
shareholder of Superior Cable Corporation.
3
<PAGE>
IN WITNESS WHEREOF, SUPERIOR CABLE CORPORATION has caused these Articles of
Amendment to be executed and its corporate seal to be affixed and caused the
foregoing to be attested, all by its duly authorized officers, on this 23rd day
of March, 1987.
SUPERIOR CABLE CORPORATION
By:
----------------------------------------
James R. Kanely, President
ATTEST:
----------------------------------------
[CORPORATE SEAL]
4
<PAGE>
SUPERIOR CABLE CORPORATION
SERIES A REDEEMABLE
PREFERRED STOCK
STATEMENT OF DESIGNATIONS
1.
The name of the corporation is Superior Cable Corporation (the
"Corporation" or the "Company").
2.
The following is a copy of the resolutions adopted by the Board of
Directors of the Corporation establishing and designating, and fixing and
determining the relative rights and preferences of, the Series A Redeemable
Preferred Stock of the Corporation:
RESOLVED FURTHER, that the Company issue 5,000 shares of preferred stock,
$1,000 par value per share, to be designated as the Series A Redeemable
Preferred Stock (the "Series A Preferred Stock"), which Series A Preferred Stock
shall have the following rights and preferences:
Section 1. DIVIDENDS AND DISTRIBUTION. The holders of Series A Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for such purpose, quarterly dividends
payable in cash on the first business day of January, April, July and October in
each year during which the Series A Preferred Stock shall be outstanding (each
such date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on April 1, 1987, in the following amounts: (A) Prior to the July
1989 Quarterly Dividend Payment Date, $15 per share (except that the quarterly
dividend for the April 1987 Quarterly Dividend Payment Date shall be $1.44 per
share); and (B) On and after the July 1989 Quarterly Dividend Payment Date,
$18.75 per share.
Quarterly dividends shall begin to accrue and be cumulative with respect to
the initial issuance of Series A Preferred Stock on March 24, 1987, and with
respect to all subsequent issuances of Series A Preferred Stock, if any, on the
Quarterly Dividend Payment Date next preceding the date of any such issuance.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A Preferred Stock in an amount less than the total amount of
such dividend at the time accrued and payable on such shares shall be allocated
pro-rata on a share by share basis among such shares at the time outstanding.
No dividend or distribution shall be made to holders of the Corporation's
common stock (the "Common Stock") or the holders of any other class or series of
stock or other securities ranking
<PAGE>
junior to the Series A Preferred Stock (other than a dividend payable in Common
Stock or in stock ranking junior to the Series A Preferred Stock) unless and
until all cumulative dividends then due to the holders of the Series A Preferred
Stock, according to the terms of this statement of preferences, shall have been
fully paid or an adequate sum has been set aside by the Corporation for the
payment thereof.
Section 2. LIMITED VOTING RIGHTS. Without regard to whether funds are
legally available therefor, whenever (i) the Corporation shall have failed to
effect any quarterly dividend payable on the Series A Preferred Stock as
provided in Section 1 hereof on the Quarterly Dividend Payment Date and such
failure continues for 30 days thereafter (hereinafter referred to as a "Dividend
Default") or (ii) the Corporation shall have failed to effect mandatory monthly
redemptions pursuant to Section 4 hereof and such failure shall continue for 30
days thereafter (hereinafter referred to as a "Redemption Default"), the number
of directors constituting the Board of Directors of the Corporation shall be
increased by the number of directors then serving plus one (the "Additional
Directors") and the holders of the Series A Preferred Stock shall have the
special right, voting separately as a single class, to elect the Additional
Directors, which increase in the size of the Board of Directors shall be
effective, and which election shall be held, at a special meeting of
shareholders of the Corporation, which meeting shall be called by the Board of
Directors within 30 days following receipt of written notice from the holders of
a majority of the Series A Preferred Stock requesting such meeting, and at each
succeeding annual meeting of shareholders thereafter until such right shall
terminate (as hereinafter provided). Each Additional Director elected by the
holders of the Series A Preferred Stock shall hold office until the annual
meeting of shareholders next succeeding his election or until his successor, if
any, is elected by such holders and qualified, unless the term of such
Additional Director is earlier terminated as provided herein. In the case of
any vacancy occurring among the Additional Directors, such vacancy may be filled
for the unexpired portion of the term by a vote of the remaining Additional
Directors, or such Additional Directors' successors in office, or by the vote of
the holders of Series A Preferred Stock at a special meeting of such
shareholders called for that purpose.
Whenever: (i) in the case of a Dividend Default, all dividends accrued and
unpaid on the Series A Preferred Stock shall have been fully paid or adequate
provision is made therefor, or (ii) in the case of a Redemption Default, all
monthly redemptions then required pursuant to Section 4 hereof have been
effected, as applicable, the special right of the holders of the Series A
Preferred Stock to elect directors as provided in this Section 2 shall
terminate, and effective as of the next business day thereafter, the Additional
Directors shall no longer be directors of the Corporation and the Board of
2
<PAGE>
Directors of the Corporation shall be decreased in size to reflect the
elimination of directorships for the Additional Directors.
Except as specifically set forth above and in section 6 hereof, the holders
of the Series A Preferred Stock shall have and possess no voting power or rights
except as otherwise provided by law.
Section 3. OPTIONAL REDEMPTION. The Corporation shall have the right to
redeem shares of Series A Preferred Stock pursuant to the following provisions:
(A) The Corporation shall have the right, at its sole option and election,
to redeem the shares of Series A Preferred Stock, in whole or in part,
at any time and from time to time at a redemption price per share,
payable in cash only, equal to the par value thereof plus an amount
equal to all unpaid dividends thereon, including accrued dividends,
whether or not declared, to and through the redemption date
("cumulative dividends").
(B) If less than all of the Series A Preferred Stock at the time
outstanding is to be redeemed, the shares to be redeemed shall be
selected by lot, pro rata or in such other manner as the Board of
Directors, in its sole discretion, may determine to be fair and
proper.
(C) Notice of any redemption of the Series A Preferred Stock shall be
mailed at least ten (10) but not more than ninety (90) days prior to
the date fixed for redemption to each holder of Series A Preferred
Stock to be redeemed, at such holder's address as it appears on the
books of the Corporation.
(D) On the redemption date specified in the notice given pursuant to
paragraph (C) hereof, the Corporation shall, and at any time after
such notice shall have been mailed and before such redemption date the
Corporation may, deposit for the pro rata benefit of the holders of
the shares of the Series A Preferred Stock called for redemption the
funds necessary for such redemption with a bank or trust company in
the City of Atlanta, State of Georgia, having capital and surplus of
at least $10 Million. Such bank or trust company shall be authorized
to pay to holders of the Series A Preferred Stock called for
redemption the appropriate redemption amount upon presentation for
cancellation to such bank or trust company by such holders of
certificates representing such shares. Any monies so deposited by the
Corporation and unclaimed at the end of five years from the date
designated for such
3
<PAGE>
redemption shall revert to the general funds of the Corporation.
After such reversion, any such bank or trust company shall, on demand,
pay over to the Corporation such unclaimed amounts, whereupon the bank
or trust company shall be relieved of the responsibility in respect
thereof to such holder, and such holder shall look only to the
Corporation for the payment of the redemption price. Any interest
accrued on funds so deposited pursuant to this paragraph (D) shall be
paid, at the time share certificates are presented for redemption, to
the holders of Series A Preferred Stock for whose benefit such funds
were deposited, except that if such funds, or any portion thereof,
revert to the Corporation in accordance with this paragraph D, then
any remaining interest thereon shall be paid to the Corporation for
its own account.
(E) Upon the deposit of funds pursuant to paragraph (D) hereof in respect
of shares of the Series A Preferred Stock called for redemption,
notwithstanding that any certificates for such shares shall not have
been surrendered for cancellation, the shares represented thereby
shall no longer be deemed outstanding, the rights to receive dividends
thereon shall cease to accrue from and after the date of redemption
designated in the notice of redemption and all rights of the holders
of the shares of the Series A Preferred Stock called for redemption
shall cease and terminate, excepting only the right to receive the
redemption price therefor.
Section 4. MANDATORY REDEMPTION.
(A) To the extent funds are legally available therefor, the Corporation
shall redeem the outstanding shares of Series A Preferred Stock at a redemption
price per share equal to the par value thereof plus cumulative dividends thereon
to and through the redemption date, at such times and in the amounts set forth
in the following schedule:
(i) in the calendar month following the calendar month in which Fixed-
Asset Coverage (as defined in the Term Note III made by the
Corporation on March 24, 1987 to the order of Westinghouse Credit
Corporation (the "Term Note") occurs, $300,000 of par value of Series
A Preferred Stock plus cumulative dividends thereon, if any;
(ii) in the calendar month thereafter, the sum of $200,000 plus the product
of $100,000 multiplied by the remainder of 1 minus the Applicable
Fraction (as defined in the Term Note; the sum of 1 minus the
Applicable Fraction being hereinafter referred to as
4
<PAGE>
the "Redemption Fraction") of par value of Series A Preferred Stock
plus cumulative dividends thereon, if any;
(iii) for each calendar month thereafter, the Redemption Fraction of
$300,000 plus cumulative dividends thereon, if any, until the Series A
Preferred Stock has been redeemed in full (except that the redemption
amount in the last month shall only be an amount sufficient to redeem
the then outstanding Series A Preferred Stock plus cumulative
dividends thereon, if any); and
(iv) in addition to the foregoing, in the calendar month following the
calendar month in which (a) the Corporation has made a prepayment of
the Term Note pursuant to Section 8P of the Financing and Security
Agreement dated August 22, 1985 between the Corporation and
Westinghouse Credit Corporation, as amended on September 22, 1986 and
March 24, 1987 (the "F&SA"), and (b) Fixed Asset Coverage (as defined
in the Term Note) has occurred, the Redemption Fraction of 10% of the
Balance (as defined in the F&SA).
To the extent that the Corporation shall have repurchased or redeemed shares of
Series A Preferred Stock prior to the scheduled redemption obligation set forth
herein, the Company shall be entitled to a credit for such repurchases or
redemptions and may reduce its next due redemption obligation under this Section
4 by a corresponding amount.
(B) Redemptions pursuant to this Section 4 shall be made in accordance
with the following provisions:
(i) If the Corporation redeems less than all of the Series A Preferred
Stock then outstanding, the shares to be redeemed shall be selected by
lot, pro rata or in such other manner as the Board of Directors, in
its sole discretion, may determine to be fair and proper.
(ii) Redemptions pursuant to this Section 4 shall be made on the 15th day
of each calendar month for which a redemption is required under this
Section 4 (the "Due Date"), on which Due Date the Corporation shall
mail notice of such redemption to each holder of Series A Preferred
Stock to be redeemed, at such holder's address as it appears on the
books of the Corporation.
(iii) On or before the Due Date, the Corporation shall deposit for the pro
rata benefit of the holders of the shares of the Series A Preferred
Stock called for redemption the funds necessary for such redemption
with a bank or trust company in the City of Atlanta, State of Georgia,
having capital and surplus of at least $10
5
<PAGE>
million. Such bank or trust company shall be authorized to pay to
holders of the Series A Preferred Stock called for redemption the
appropriate redemption amount upon presentation for cancellation to
such bank or trust company by such holders of certificates
representing such shares. Any monies so deposited by the Corporation
and unclaimed at the end of five years from the date designated for
such redemption shall revert to the general funds of the Corporation.
After such reversion, any such bank or trust company shall, on demand,
pay over to the Corporation such unclaimed amounts, whereupon the bank
or trust company shall be relieved of the responsibility in respect
thereof to such holder, and such holder shall look only to the
Corporation for the payment of the redemption price. Any interest
accrued on funds so deposited pursuant to this subparagraph (iii)
shall be paid, at the time share certificates are presented for
redemption, to the holders of Series A Preferred Stock for whose
benefit such funds were deposited, except that if such funds, or any
portion thereof, revert to the Corporation in accordance with this
subparagraph (iii), then any remaining interest thereon shall be paid
to the Corporation for its own account.
(iv) Upon the deposit of funds pursuant to subparagraph (iii) hereof in
respect of shares of the Series A Preferred Stock called for
redemption, notwithstanding that any certificates for such shares
shall not have been surrendered for cancellation, the shares
represented thereby shall no longer be deemed outstanding, the rights
to receive dividends thereon shall cease to accrue from and after the
date of redemption designated in the notice of redemption and all
rights of the holders of the shares of the Series A Preferred Stock
called for redemption shall cease and terminate, excepting only the
right to receive the redemption price therefor.
Section 5. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation,
dissolution or winding up of the Corporation, either voluntary or involuntary,
before any payment or distribution of the assets of the Corporation (whether
capital or surplus) shall be made to or set apart for the holders of the Common
Stock or of any series or class of stock of or other securities having an
interest in the Corporation ranking junior to the Series A Preferred Stock upon
liquidation, dissolution or winding up, the holders of the Series A Preferred
Stock shall receive for each share the par value thereof plus cumulative
dividends thereon on the date of such payment. If, upon any liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation, or
proceeds thereof, distributable among the holders of the shares of Series A
Preferred Stock shall
6
<PAGE>
be insufficient to pay in full the preferential amount and liquidating payments
on any other stock of the Corporation ranking, as to liquidation, dissolution or
winding up, on parity with the Series A Preferred Stock, then such assets or
proceeds thereof shall be distributed among the holders of the Series A
Preferred Stock and any such other stock ratably in accordance with the
respective amounts which would be payable upon liquidation, dissolution or
winding up on such shares if all amounts payable thereon were paid in full. For
the purpose of this Section 5, a consolidation or merger of the Corporation with
or into any other corporation or corporations, at any time, or from time to
time, or a sale, transfer, mortgage, pledge or lease by the Corporation of all
or substantially all of the assets of the Corporation shall not be construed as
a liquidation, dissolution or winding up of the Corporation within the meaning
hereof.
Section 6. ISSUANCE OF ADDITIONAL PREFERRED STOCK. The Corporation shall
not issue any additional preferred stock without the prior written consent of
the holders of a majority of the then outstanding shares of Series A Preferred
Stock or the approval by vote at a duly called meeting of the holders of the
then outstanding shares of Series A Preferred Stock.
3.
The foregoing resolutions were duly adopted by the Board of Directors of
the Corporation by unanimous written consent dated as of March 23, 1987.
IN WITNESS WHEREOF, the undersigned has caused this Statement of
Preferences to be executed and its corporate seal to be affixed this 23rd day of
March, 1987.
SUPERIOR CABLE CORPORATION
By:
----------------------------------------
James R. Kanely, President
Attest:
-------------------------
[CORPORATE SEAL]
7
<PAGE>
ARTICLES OF AMENDMENT
OF
SUPERIOR TELETEC TRANSMISSION PRODUCTS INC.
I.
The name of the Corporation is Superior TeleTec Transmission Products Inc.
II.
Article I of the Corporation's Articles of Incorporation is hereby deleted
in its entirety and the following substituted therefor:
The name of the Corporation is Superior TeleTec Inc.
III.
The amendment set forth above was adopted as of February 3, 1994.
IV.
The amendment set forth above was adopted by the Board of Directors of the
Corporation without shareholder action pursuant to Section 14-2-1002(6) of the
Georgia Business Corporation Code, as amended, and no shareholder action was
required in order to effectuate such adoption.
V.
Except as expressly modified and amended hereby, all provisions of the
Articles of Incorporation of the Corporation shall remain in full force and
effect.
IN WITNESS WHEREOF, the undersigned have executed these Articles of
Amendment as of this 3rd day of February, 1994.
-------------------------------
JUSTIN F. DEEDY, JR., President
[CORPORATE SEAL]
ATTEST:
----------------------------
DAVID S. ALDRIDGE, Secretary
8
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
SUPERIOR TELETEC INC.
I
The name of the Corporation is SUPERIOR TELETEC INC.
II
Effective as of the date hereof, Article I of the Articles of Incorporation
of the Corporation is amended to read as follows:
"The name of the Corporation is SUPERIOR TELECOMMUNICATIONS INC."
III
All other provisions of the Articles of Incorporation shall remain in full
force and effect.
IV
These Articles of Amendment were duly approved by the Corporation's sole
shareholder in accordance with the provisions of Section 14-2-1003 of the
Georgia Business Corporation Code.
IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment
to be executed and attested by its duly authorized officers as of the 25th day
of May, 1995.
SUPERIOR TELETEC INC.
By:
-------------------------------
Justin F. Deedy, Jr., President
ATTEST:
By:
----------------------------
David S. Aldridge, Secretary
[CORPORATE SEAL]
9
<PAGE>
BYLAWS
OF
SUPERIOR TELECOMMUNICATIONS INC.
ARTICLE I
SHAREHOLDERS
Section 1. ANNUAL MEETINGS. The annual meeting of the shareholders for
the election of Directors and for the transaction of such other business as may
properly come before such annual meeting shall be held at such place, either
within or without the State of Georgia, on such date within four (4) months of
the end of each fiscal year of the Corporation and at such time as the Board of
Directors may from time to time by resolution provide. The Board of Directors
may specify by resolution prior to any special meeting of shareholders held
within the year that such special meeting shall be in lieu of the annual
meeting.
Section 2. SPECIAL MEETINGS; CALL AND NOTICE OF MEETINGS. Special
meetings of the shareholders may be called at any time by the Board of
Directors, the President, or upon written request of the holders of at least
twenty-five (25%) percent of the outstanding common stock. Such special
meetings shall be held at such place, either within or without the State of
Georgia, as is stated in the call and notice thereof. Written notice of each
annual or special meeting of shareholders, stating the time and place of such
meeting, and the purpose of any special meeting, shall be mailed to each
shareholder entitled to vote at or to notice of such meeting at his address
shown on the books of the Corporation not less than ten (10) nor more than fifty
(50) days prior to such meeting unless such shareholder waives notice of such
meeting. Any shareholder may execute a waiver of notice, in person or by proxy,
either before or after any annual or special meeting, and shall be deemed to
have waived notice if he is present at such meeting in person or by proxy.
Neither the business transacted at, nor the purpose of, any annual or special
meeting need be stated in the waiver of notice of such meeting, except that,
with respect to a waiver of notice of an annual or special meeting at which a
plan of merger or consolidation is considered, information as required by the
Georgia Business Corporation Code must be delivered to the shareholder prior to
his execution of the waiver of notice or the waiver itself must conspicuously
and specifically waive the right to such information.
Notice of any annual or special meeting may be given by the President, the
Secretary or by the person or persons calling such meeting. No notice need be
given of the time and place of
1
<PAGE>
reconvening of any adjourned annual or special meeting, if the time and place to
which such meeting is adjourned are announced at the adjourned meeting.
Section 3. QUORUM; REQUIRED SHAREHOLDER VOTE. A quorum for the
transaction of business at any annual or special meeting of shareholders shall
exist when the holders of a majority of the outstanding shares entitled to vote
are represented either in person or by proxy at such meeting. If a quorum is
present, the affirmative vote of the majority of the shares represented at an
annual or special meeting and entitled to vote on the subject matter shall be
the act of the shareholders, unless a greater vote is required by law, by the
Articles of Incorporation or by these Bylaws. When a quorum is once present to
organize an annual or special meeting, the shareholders present may continue to
do business at such meeting or at any adjournment thereof notwithstanding the
withdrawal of enough shareholders to leave less than a quorum. The holders of a
majority of the voting shares represented at an annual or special meeting,
whether or not a quorum is present, may adjourn such meeting from time to time.
Section 4. PROXIES. A shareholder may vote either in person or by a
proxy which he has duly executed in writing. No proxy shall be valid after
eleven (11) months from the date thereof unless a longer period is expressly
provided in the proxy.
Section 5. ACTION OF SHAREHOLDERS WITHOUT MEETING. Any action required to
be, or which may be, taken at an annual or special meeting of the shareholders,
may be taken without such a meeting if written consent, setting forth the
actions so taken, shall be signed by all of the shareholders entitled to vote
with respect to the subject matter thereof, except that, with respect to
approval of a plan of merger or consolidation by written consent, information as
required by the Georgia Business Corporation Code must be delivered to the
shareholders prior to their execution of the consent or the consent itself must
conspicuously and specifically waive the right to such information. Such
consent shall have the same force and effect as a unanimous affirmative vote of
the shareholders and shall be filed with the minutes of the proceedings of the
shareholders.
ARTICLE II
DIRECTORS
Section 1. POWER OF DIRECTORS. The Board of Directors shall manage the
business of the Corporation and may exercise all the powers of the Corporation,
subject to any restrictions imposed by law, by the Articles of Incorporation or
by these Bylaws.
2
<PAGE>
Section 2. COMPOSITION OF THE BOARD. The Board of Directors of the
Corporation shall consist of a minimum of three natural persons and a maximum of
nine natural persons of the age of eighteen years or over; the number of
directors may be changed by resolution of a majority of the Board or by the
stockholders. Directors need not be residents of the State of Georgia or
shareholders of the Corporation. At each annual meeting the shareholders shall
elect the Directors who shall serve until their successors are elected and
qualified; provided that the shareholders may, by the affirmative vote of the
holders of a majority of the shares entitled to vote at an election of
Directors, add or remove Directors with or without cause at any time.
Section 3. MEETINGS OF THE BOARD, NOTICE OF MEETINGS; WAIVER OF NOTICE.
The annual meeting of the Board of Directors for the purpose of electing
officers and transacting such other business as may be brought before such
meeting shall be held each year immediately following the annual meeting of
shareholders. The Board of Directors may by resolution provide for the time and
place of other regular meetings of the Board of Directors and no notice of such
regular meetings need be given. Special meetings of the Board of Directors may
be called by the President or by any two Directors, and written notice of the
time and place of such meetings shall be given to each Director by first class
mail or by telephone, telegraph, cablegram or in person at least two (2) days
before such meeting. Any Director may execute a waiver of notice, either before
or after any regular or special meeting of the Board of Directors, and shall be
deemed to have waived notice if he is present at such meeting. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the Board of Directors need be stated in the notice or waiver of notice of
such meeting. Any regular or special meeting of the Board of Directors may be
held at any place within or without the State of Georgia.
Section 4. QUORUM; VOTE REQUIREMENT. A majority of the Directors in
office at any time shall constitute a quorum for the transaction of business at
any regular or special meeting of the Board of Directors. When a quorum is
present, the vote of a majority of the Directors present shall be the act of the
Board of Directors, unless a greater vote is required by law, by the Articles of
Incorporation or by these Bylaws.
Section 5. ACTION OF BOARD WITHOUT MEETING. Any action required or
permitted to be taken at a meeting of the Board of Directors or any committee
thereof may be taken without a meeting if written consent, setting forth the
action so taken, is signed by all of the Directors or committee members and
filed with the minutes of the proceedings of the Board of Directors or
committee. Such consent shall have the same force and effect as a unanimous
affirmative vote of the Board of Directors or committee, as the case may be.
3
<PAGE>
Section 6. COMMITTEES. The Board of Directors, by resolution adopted
by a majority of all of the Directors, may designate from among its members one
or more committees to be composed of two or more Directors. Any such committee,
to the extent provided in the resolution, shall have and may exercise all of the
authority of the Board of Directors, subject only to the limitations prescribed
in Section 14-2-147 of the Georgia Business Corporation Code and any other
limitations which may hereafter be imposed under the laws of the State of
Georgia. Any such committee shall have such name as may be determined from time
to time by resolution adopted by the Board of Directors. A majority of each
such committee may determine its action and may fix the time and place of its
meetings, unless otherwise provided by the Board of Directors. Each committee
shall keep regular minutes of its meetings and report the same to the Board of
Directors when required. The Board may designate one or more Directors as
alternate members of any committee, who may replace any absent members at any
meeting of such committee.
Section 7. VACANCIES. A vacancy occurring in the Board of Directors by
reason of the removal of a Director by the shareholders shall be filled by the
shareholders, or, if authorized by the shareholders, by the remaining Directors.
Any other vacancy occurring in the Board of Directors may be filled by the
affirmative vote of a majority of the remaining Directors though less than a
quorum of the Board of Directors, or by the sole remaining Director, as the case
may be, or, if the vacancy is not so filled, or if no Director remains, by the
shareholders. A Director elected to fill a vacancy shall serve for the
unexpired term of his predecessor in office.
Section 8. INTERESTED DIRECTORS AND OFFICERS. An interested Director
or officer is one who is a party to a contract or transaction with the
Corporation or who is an officer or director of, or has a financial interest in,
another corporation, partnership or association which is a party to a contract
or transaction with the Corporation. Contracts and transactions between the
Corporation and one or more interested Directors or officers shall not be void
or voidable solely because of the involvement or vote of such interested persons
as long as (i) the contract or transaction is approved in good faith by the
Board of Directors or appropriate committee by the affirmative votes of a
majority of disinterested Directors, even if the disinterested Directors be less
than a quorum, at a meeting of the Board of Directors or committee at which the
material facts as to the interested person or persons and the contract or
transaction are disclosed or known to the Board of Directors or committee prior
to the vote; or (ii) the contract or transaction is approved in good faith by
the shareholders after the material facts as to the interested person or persons
and the contract or transaction have been disclosed to them; or (iii) the
contract or transaction is fair as to the Corporation as of the time it is
authorized, approved or ratified by the Board of
4
<PAGE>
Directors, committee, or shareholders. Interested Directors may be counted in
determining the presence of a quorum at a meeting of the Board of Directors or
committee which authorizes the contract or transaction.
ARTICLE III
OFFICERS
Section 1. EXECUTIVE STRUCTURE OF THE CORPORATION. The officers of the
Corporation shall consist of a President, a Secretary, a Treasurer and such
other officers or assistant officers, including Vice Presidents, as may be
elected by the Board of Directors. The Board of Directors may designate the
order in which Vice Presidents may act. Each officer shall hold office for the
term for which he has been elected and until he is removed or his successor has
been elected and qualified. Any two or more offices may be held by the same
person, except that the same person shall not be both President and Secretary.
Section 2. PRESIDENT. The President shall be the chief executive
officer of the Corporation and shall have responsibility for the general and
active management of the operations of the Corporation. He shall be responsible
for the administration of the Corporation, including general supervision of the
policies of the Corporation and general and active management of the financial
affairs of the Corporation and shall have authority to execute all contracts or
other instruments in the name and on behalf of the Corporation.
Section 3. VICE PRESIDENT. if a Vice President is elected, in the
absence of the President or in the event of his inability or refusal to act, the
Vice President (or in the event there be more than one Vice President, the Vice
Presidents in the order designated, or in the absence of any designation, then
in the order of their election) shall perform the duties of the President, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the President. The Vice President or Vice Presidents, as the
case may be, shall perform such other duties and have such other powers as the
President or the Board of Directors may from time to time prescribe.
Section 4. SECRETARY. The Secretary shall keep the minutes of the
proceedings of the shareholders and of the Board of Directors, shall have
custody of and attest the seal of the Corporation, and shall perform such other
duties and have such other powers as the President or the Board of Directors may
from time to time prescribe.
Section 5. TREASURER. The Treasurer shall be responsible for the
maintenance of proper financial books and records of the Corporation, and shall
perform such other duties
5
<PAGE>
and have such other powers as the President or the Board of Directors may from
time to time prescribe.
Section 6. REMOVAL OF OFFICERS. Any officer may be removed at any time
by the Board of Directors, and such vacancy may be filled by the Board of
Directors. This provision shall not prevent the making of a contract of
employment for a definite term with any officer and shall have no effect upon
any cause of action which any officer may have as a result of removal in breach
of a contract of employment.
Section 7. COMPENSATION. The salaries of the officers shall be fixed
from time to time by the Board of Directors. No officer shall be prevented from
receiving such salary by reason of the fact that he is also a Director of the
Corporation.
ARTICLE IV
STOCK
Section 1. STOCK CERTIFICATES. The shares of stock of the Corporation
shall be represented by certificates in such form as may be approved by the
Board of Directors, which certificates shall be issued to the shareholders of
the Corporation in numerical order from the stock book of the Corporation, and
each of which shall bear the name of the shareholder, the number of shares
represented, and the date of issue; and which shall be signed by the President
and the Secretary or an Assistant Secretary of the Corporation; and which shall
be sealed with the seal of the Corporation. No share certificate shall be
issued until the consideration for the shares represented thereby has been fully
paid.
Section 2. TRANSFER OF STOCK. Shares of stock of the Corporation shall
be transferred on the books of the Corporation upon surrender to the Corporation
of the certificate or certificates representing the shares to be transferred
accompanied by an assignment in writing of such shares properly executed by the
shareholder of record or his duly authorized attorney-in-fact and with all taxes
on the transfer having been paid. The Corporation may refuse any requested
transfer until furnished evidence satisfactory to it that such transfer is
proper. Upon the surrender of a certificate for transfer of stock, such
certificate shall at once be conspicuously marked on its face "Cancelled" or
"Void" and filed with the permanent stock records of the Corporation. The Board
of Directors may make such additional rules concerning the issuance, transfer
and registration of stock and requirements regarding the establishment of lost,
destroyed or wrongfully taken stock certificates (including any requirement of
an indemnity bond prior to issuance of any replacement certificate) as it deems
appropriate.
6
<PAGE>
Section 3. REGISTERED SHAREHOLDERS. The Corporation may deem and treat
the holder of record of any stock as the absolute owner thereof for all purposes
and shall not be required to take any notice of any right or claim of right of
any other person.
Section 4. RECORD DATE. For the purposes of determining shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, or entitled to receive payment of any dividend, or in order
to make a determination of shareholders for any other purpose, the Board of
Directors of the Corporation may fix in advance a date as the record date for
any such determination of shareholders, such date in any case to be not more
than 50 days and, in the case of a meeting of shareholders, not less than 10
days prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken.
ARTICLE V
SIGNATURES AND SEAL
Section 1. CONTRACTS AND DEEDS. All contracts, deeds and other
instruments shall be signed on behalf of the Corporation by the President or by
such other officer, officers, agent or agents as the Board of Directors may from
time to time by resolution provide.
Section 2. SEAL. The seal of the Corporation shall be as follows:
If the seal is affixed to a document, the signature of the Secretary or an
Assistant Secretary shall attest the seal. The seal and its attestation may be
lithographed or otherwise printed on any document and shall have, to the extent
permitted by law, the same force and effect as if it had been affixed and
attested manually.
ARTICLE VI
INDEMNITY
Any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (including any action by or in the
right of the Corporation) by reason of the fact that he is or was a Director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director or
7
<PAGE>
officer of another corporation, partnership, joint venture, trust or other
enterprise, shall be indemnified by the Corporation against expenses (including
reasonable attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation (and with respect
to any criminal action or proceeding, if he had no reasonable cause to believe
his conduct was unlawful), to the maximum extent permitted by, and in the manner
provided by, the Georgia Business Corporation Code.
ARTICLE VII
AMENDMENT OF BYLAWS
The Board of Directors shall have the power to alter, amend or repeal the
Bylaws or adopt new bylaws, but any bylaws adopted by the Board of Directors may
be altered, amended or repealed and new bylaws adopted by the shareholders. The
shareholders may prescribe that any bylaw or bylaws adopted by them shall not be
altered, amended or repealed by the Board of Directors. Action by the Directors
with respect to the Bylaws shall be taken by an affirmative vote of a majority
of all of the Directors then in office. Action by the shareholders with respect
to the Bylaws shall be taken by an affirmative vote of a majority of all shares
outstanding and entitled to vote.
8
<PAGE>
Registration Rights Agreement
Dated as of July 21, 1995
among
The Alpine Group, Inc.
Issuer,
Adience, Inc.,
Superior Telecommunications Inc.
Superior Cable Corporation
Subsidiary Guarantors,
and
Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Nomura Securities International, Inc.
and
First Albany Corporation
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of July 21, 1995, among The Alpine Group, Inc., a Delaware
corporation (the "Company"), Adience, Inc., a Delaware corporation ("Adience")
Superior Telecommunications Inc., a Georgia corporation and Superior Cable
Corporation, a corporation organized under the laws of Ontario, Canada
("Superior Canada" and together, with Adience and Superior, the "Subsidiary
Guarantors" and, individually, each a "Subsidiary Guarantor"), and Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Nomura Securities
International, Inc. and First Albany Corporation (collectively, the "Initial
Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated July
14, 1995 among the Company, the Subsidiary Guarantors and the Initial Purchasers
(the "Purchase Agreement"), which provides for the sale by the Company to the
Initial Purchasers of an aggregate of $153,000,000 principal amount of the
Company's 12 1/4% Senior Secured Notes due 2003 (the "Initial Notes"). The
obligations of the Company under the Indenture and the Notes will be guaranteed
by the Subsidiary Guarantors. Additionally, the Initial Notes are to be secured
by the capital stock of the Subsidiary Guarantors that is owned by the Company,
together with profits and proceeds therefrom and property received with respect
thereto, in addition thereto, in exchange therefor or in substitution thereof,
which will be pledged to the trustee under the Indenture (as defined herein).
In order to induce the Initial Purchasers to enter into the Purchase Agreement,
the Company and the Subsidiary Guarantors have agreed to provide to the Initial
Purchasers and their direct and indirect transferees the registration rights set
forth in this Agreement. The execution of this Agreement is a condition to the
closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. DEFINITIONS. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended from time
to time.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
<PAGE>
2
"CLOSING DATE" shall mean the Closing Time as defined in the Purchase
Agreement.
"COMPANY" shall have the meaning set forth in the preamble of this
Agreement and also includes the Company's successors.
"DEPOSITARY" shall mean the Depositary Trust Company, or any other
depositary appointed by the Company; PROVIDED, HOWEVER, that such
depositary must have an address in the Borough of Manhattan, in the City of
New York.
"EXCHANGE NOTES" shall mean 12 1/4% Series B Senior Secured Notes due
2003 issued by the Company which are jointly and severally guaranteed by
the Subsidiary Guarantors under the Indenture containing terms identical to
the Initial Notes (except that (i) interest thereon shall accrue from the
last date on which interest was paid on the Initial Notes or, if no such
interest has been paid, from July 21, 1995, (ii) the transfer restrictions
thereon shall be eliminated and (iii) certain provisions relating to an
increase in the stated rate of interest thereon shall be eliminated) and
the guarantee thereof by each of the Subsidiary Guarantors to be offered to
Holders of Initial Notes in exchange for Initial Notes pursuant to the
Exchange Offer.
"EXCHANGE OFFER" shall mean the exchange offer by the Company of
Exchange Notes for Registrable Notes pursuant to Section 2(a) hereof.
"EXCHANGE OFFER REGISTRATION" shall mean a registration under the 1933
Act effected pursuant to Section 2(a) hereof.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such registration
statement, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"HOLDERS" shall mean the Initial Purchasers, for so long as they own
any Registrable Notes, and each of their successors, assigns and direct and
indirect transferees who become registered owners of Registrable Notes
under the Indenture.
"INDENTURE" shall mean the Indenture relating to the Initial Notes
dated as of July 21, 1995 among the Company, the Subsidiary Guarantors
and Midland Marine Bank, as trustee, as the same may be amended from
time to time in accordance with the terms thereof.
<PAGE>
3
"INITIAL PURCHASERS" shall have the meaning set forth in the preamble
of this Agreement.
"MAJORITY HOLDERS" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Notes; PROVIDED that
whenever the consent or approval of Holders of a specified percentage of
Registrable Notes is required hereunder, Registrable Notes held by the
Company or any of its affiliates (as such term is defined in Rule 405 under
the 1933 Act) (other than the Initial Purchasers or subsequent holders of
Registrable Notes if such subsequent holders are deemed to be such
affiliates solely by reason of their holding of such Registrable Notes)
shall be disregarded in determining whether such consent or approval was
given by the Holders of such required percentage or amount.
"PERSON" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political
subdivision thereof.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Notes covered by a Shelf Registration Statement,
and by all other amendments and supplements to a prospectus, including
post-effective amendments, and in each case including all material
incorporated by reference therein.
"PURCHASE AGREEMENT" shall have the meaning set forth in the preamble
of this Agreement.
"REGISTRABLE NOTES" shall mean the Initial Notes and the guarantees
thereof; PROVIDED, HOWEVER, that the Initial Notes and guarantees shall
cease to be Registrable Notes and the guarantees when (i) a Registration
Statement with respect to such Initial Notes and guarantees shall have
been declared effective under the 1933 Act and such Initial Notes and
guarantees shall have been disposed of pursuant to such Registration
Statement, (ii) such Initial Notes and guarantees shall have been sold to
the public pursuant to Rule 144 (or any similar provision then in force,
but not Rule 144A) under the 1933 Act, (iii) such Initial Notes and
guarantees shall have ceased to be outstanding or (iv) such Initial Notes
and guarantees have been exchanged for Exchange Notes upon consummation of
the Exchange Offer.
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance by the Company and the Subsidiary Guarantors
with this Agreement, including without limitation: (i) all SEC, stock
exchange or National Association of
<PAGE>
4
Securities Dealers, Inc. ("NASD") registration and filing fees, (ii) all
fees and expenses incurred in connection with compliance with state or
other securities or blue sky laws and compliance with the rules of the NASD
(including reasonable fees and disbursements of counsel for any
underwriters or Holders in connection with state or other securities or
blue sky qualification of any of the Exchange Notes or Registrable Notes),
(iii) all expenses of any Persons in preparing or assisting in preparing,
word processing, printing and distributing any Registration Statement, any
Prospectus, any amendments or supplements thereto, any underwriting
agreements, securities sales agreements and other documents relating to the
performance of and compliance with this Agreement, (iv) all rating agency
fees, (v) all fees and expenses incurred in connection with the listing, if
any, of any of the Registrable Notes on any securities exchange or
exchanges, (vi) all fees and disbursements relating to the qualification of
the Indenture under applicable securities laws, (vii) the fees and
disbursements of counsel for the Company and the Subsidiary Guarantors and
of the independent public accountants of the Company and the Subsidiary
Guarantors, including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance,
(viii) the fees and expenses of the Trustee, including its counsel, and any
escrow agent or custodian, and (ix) any fees and disbursements of the
underwriters customarily required to be paid by issuers or sellers of
securities and the reasonable fees and expenses of any special experts
retained by the Company and the Subsidiary Guarantors in connection with
any Registration Statement, but excluding fees of counsel to the
underwriters or the Holders and underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of Registrable
Notes by a Holder.
"REGISTRATION STATEMENT" shall mean any registration statement of the
Company and the Subsidiary Guarantors which covers any of the Exchange
Notes or Registrable Notes pursuant to the provisions of this Agreement,
and all amendments and supplements to any such Registration Statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"SHELF REGISTRATION" shall mean a registration effected pursuant to
Section 2(b) hereof.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration
statement of the Company and the Subsidiary Guarantors pursuant to the
provisions of Section 2(b) of this Agreement which covers all of the
Registrable Notes on an appropriate form under Rule 415 under the 1933 Act,
or any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective
<PAGE>
5
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"SUBSIDIARY GUARANTORS" shall have the meaning set forth in the
preamble of this Agreement and also includes each Subsidiary Guarantor's
successors.
"TRUSTEE" shall mean the trustee with respect to the Initial Notes
under the Indenture.
2. REGISTRATION UNDER THE 1933 ACT. (a) EXCHANGE OFFER
REGISTRATION. To the extent not prohibited by any applicable law or applicable
interpretation of the Staff of the SEC, the Company and the Subsidiary
Guarantors shall use their best efforts (A) to file within 30 days after the
Closing Date an Exchange Offer Registration Statement covering the offer by the
Company and the Subsidiary Guarantors to the Holders to exchange all of the
Registrable Notes for Exchange Notes, (B) to cause such Exchange Offer
Registration Statement to be declared effective by the SEC within 90 days after
the Closing Date, (C) to cause such Registration Statement to remain effective
until the closing of the Exchange Offer and (D) to consummate the Exchange Offer
within 120 days following the Closing Date. The Exchange Notes will be issued
under the Indenture. Upon the effectiveness of the Exchange Offer Registration
Statement, the Company and the Subsidiary Guarantors shall promptly commence the
Exchange Offer, it being the objective of such Exchange Offer to enable each
Holder (other than Participating Broker-Dealers (as defined in Section 3(f)))
eligible and electing to exchange Registrable Notes for Exchange Notes (assuming
that such Holder is not an affiliate of the Company within the meaning of Rule
405 under the 1933 Act, acquires the Exchange Notes in the ordinary course of
such Holder's business and has no arrangements or understandings with any person
to participate in the Exchange Offer for the purpose of distributing the
Exchange Notes) to trade such Exchange Notes from and after their receipt
without any limitations or restrictions under the 1933 Act and without material
restrictions under the securities laws of a substantial proportion of the
several states of the United States.
In connection with the Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(ii) keep the Exchange Offer open for not less than 30 days after the
date notice thereof is mailed to the Holders (or longer if required by
applicable law);
(iii) use the services of the Depositary for the Exchange Offer;
<PAGE>
6
(iv) permit Holders to withdraw tendered Registrable Notes at any time
prior to the close of business, New York City time, on the last business
day on which the Exchange Offer shall remain open, by sending to the
institution specified in the notice, a telegram, telex, facsimile
transmission or letter setting forth the name of such Holder, the principal
amount of Registrable Notes delivered for exchange, and a statement that
such Holder is withdrawing his election to have such Initial Notes
exchanged; and
(v) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer, the
Company and the Subsidiary Guarantors shall:
(i) accept for exchange Registrable Notes duly tendered and not
validly withdrawn pursuant to the Exchange Offer in accordance with the
terms of the Exchange Offer Registration Statement and the letter of
transmittal which is an exhibit thereto;
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Notes so accepted for exchange by the Company
and the Subsidiary Guarantors; and
(iii) cause the Trustee promptly to authenticate and deliver
Exchange Notes to each Holder of Registrable Notes equal in amount to the
Registrable Notes of such Holder so accepted for exchange.
Interest on each Exchange Note will accrue from the last date on which
interest was paid on the Registrable Notes surrendered in exchange therefor or,
if no interest has been paid on the Registrable Notes, from July 21, 1995. The
Exchange Offer shall not be subject to any conditions, other than that the
Exchange Offer, or the making of any exchange by a Holder, does not violate
applicable law or any applicable interpretation of the Staff of the SEC. Each
Holder of Registrable Notes (other than Participating Broker-Dealers) who wishes
to exchange such Registrable Notes for Exchange Notes in the Exchange Offer
shall have represented that (i) it is not an affiliate of the Company or any
Subsidiary Guarantor, (ii) any Exchange Notes to be received by it were acquired
in the ordinary course of business and (iii) at the time of the commencement of
the Exchange Offer it has no arrangement with any person to participate in the
distribution (within the meaning of the 1933 Act) of the Exchange Notes. The
Company shall inform the Initial Purchasers of the names and addresses of the
Holders to whom the Exchange Offer is made, and the Initial Purchasers shall
have the right to contact such Holders and otherwise facilitate the tender of
Registrable Notes in the Exchange Offer.
<PAGE>
7
(b) SHELF REGISTRATION. (i) If, because of any change in law or
applicable interpretations thereof by the Staff of the SEC, the Company and the
Subsidiary Guarantors are not permitted to effect the Exchange Offer as
contemplated by Section 2(a) hereof, or (ii) if for any other reason the
Exchange Offer Registration Statement is not declared effective within 90 days
following the Closing Date or the Exchange Offer cannot be consummated within
120 days following the Closing Date, or (iii) if any Holder (other than an
Initial Purchaser) is not eligible to participate in the Exchange Offer or (iv)
upon the request of any Initial Purchaser (with respect to any Registrable Notes
which it acquired directly from the Company) following the consummation of the
Exchange Offer if such Initial Purchaser shall hold Registrable Notes which it
acquired directly from the Company and if such Initial Purchaser is not
permitted, in the opinion of counsel to such Initial Purchaser, pursuant to
applicable law or applicable interpretation of the Staff of the SEC to
participate in the Exchange Offer, the Company and the Subsidiary Guarantors
shall, at their cost:
(A) as promptly as practicable, file with the SEC a Shelf
Registration Statement relating to the offer and sale of the Registrable
Notes by the Holders from time to time in accordance with the methods of
distribution elected by the Majority Holders of such Registrable Notes and
set forth in such Shelf Registration Statement, and use their best efforts
to cause such Shelf Registration Statement to be declared effective by the
SEC by the 120th day after the Closing Date (or promptly in the event of a
request by any Initial Purchaser pursuant to clause (iv) above). In the
event that the Company and the Subsidiary Guarantors are required to file a
Shelf Registration Statement upon the request of any Holder (other than an
Initial Purchaser) not eligible to participate in the Exchange Offer
pursuant to clause (iii) above or upon the request of any Initial Purchaser
pursuant to clause (iv) above, the Company and the Subsidiary Guarantors
shall file and have declared effective by the SEC both an Exchange Offer
Registration Statement pursuant to Section 2(a) with respect to all
Registrable Notes and a Shelf Registration Statement (which may be a
combined Registration Statement with the Exchange Offer Registration
Statement) with respect to offers and sales of Registrable Notes held by
such Holder or such Initial Purchaser after completion of the Exchange
Offer;
(B) use their best efforts to keep the Shelf Registration Statement
continuously effective in order to permit the Prospectus forming part
thereof to be usable by Holders for a period of three years from the date
the Shelf Registration Statement is declared effective by the SEC (or one
year from the date the Shelf Registration Statement is declared effective
if such Shelf Registration Statement is filed upon the request of any
Initial Purchaser pursuant to clause (iv) above) or such shorter period
which will terminate when all of the Registrable Notes covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement; and
<PAGE>
8
(C) notwithstanding any other provisions hereof, use their best
efforts to ensure that (i) any Shelf Registration Statement and any
amendment thereto and any Prospectus forming part thereof and any
supplement thereto complies in all material respects with the 1933 Act and
the rules and regulations thereunder, (ii) any Shelf Registration Statement
and any amendment thereto does not, when it becomes effective, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading and (iii) any Prospectus forming part of any Shelf
Registration Statement, and any supplement to such Prospectus (as amended
or supplemented from time to time), does not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements, in light of the circumstances under which they were made,
not misleading.
The Company and the Subsidiary Guarantors each, jointly and severally,
further agree, if necessary, to supplement or amend the Shelf Registration
Statement if reasonably requested by the Majority Holders with respect to
information relating to the Holders and otherwise as required by Section 3(b)
below, to use all reasonable efforts to cause any such amendment to become
effective and such Shelf Registration to become usable as soon as practicable
thereafter and to furnish to the Holders of Registrable Notes copies of any such
supplement or amendment promptly after its being used or filed with the SEC.
(c) EXPENSES. The Company and the Subsidiary Guarantors shall pay
all Registration Expenses in connection with the registration pursuant to
Section 2(a) or 2(b) and, in the case of any Shelf Registration Statement, will
reimburse the Holders or Initial Purchasers for the reasonable fees and
disbursements of one firm or counsel designated in writing by the Majority
Holders to act as counsel for the Holders of the Registrable Notes in connection
therewith, and, in the case of an Exchange Offer Registration Statement, will
reimburse the Initial Purchasers, as applicable, for the reasonable fees and
disbursements of counsel in connection therewith. Each Holder shall pay all
expenses of its counsel other than as set forth in the preceding sentence,
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Registrable Notes pursuant to the Shelf
Registration Statement.
(d) EFFECTIVE REGISTRATION STATEMENT. (i) The Company or a
Subsidiary Guarantor will be deemed not to have used its best efforts to cause
the Exchange Offer Registration Statement or the Shelf Registration Statement,
as the case may be, to become, or to remain, effective during the requisite
period if the Company or such Subsidiary Guarantor, as the case may be,
voluntarily takes any action that would result in any such Registration
Statement not being declared effective or in the Holders of Registrable Notes
covered thereby not being able to exchange or offer and sell such Registrable
Notes during that period unless (A) such action is required by applicable law or
(B) such action is taken by the Company or such
<PAGE>
9
Subsidiary Guarantor, as the case may be, in good faith and for valid business
reasons (not including avoidance of the Company's or such Subsidiary Guarantor's
respective obligations hereunder), including the acquisition or divestiture of
assets, so long as the Company or such Subsidiary Guarantor, as the case may be,
promptly complies with the requirements of Section 3(k) hereof, if applicable.
(ii) An Exchange Offer Registration Statement pursuant to Section 2(a)
hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof will
not be deemed to have become effective unless it has been declared effective by
the SEC; PROVIDED, HOWEVER, that if, after it has been declared effective, the
offering of Registrable Notes pursuant to a Registration Statement is interfered
with by any stop order, injunction or other order or requirement of the SEC or
any other governmental agency or court, such Registration Statement will be
deemed not to have been effective during the period of such interference, until
the offering of Registrable Notes pursuant to such Registration Statement may
legally resume.
(e) INCREASE IN INTEREST RATE. In the event that either (i) the
Exchange Offer Registration Statement is not filed with the Commission on or
prior to the 30th day following the Closing Date, (ii) the Exchange Offer
Registration Statement is not declared effective on or prior to the 90th day
following the Closing Date or (iii) the Exchange Offer is not consummated on or
prior to the 120th day following the Closing Date or a Shelf Registration
Statement with respect to the Registrable Notes is not declared effective on or
prior to the 120th day following the Closing Date, the interest rate borne by
the Initial Notes shall be increased by 0.25% per annum, which rate will be
increased by an additional one quarter of one percent per annum for each 90-day
period that any such additional interest continues to accrue, PROVIDED that the
aggregate increase in such interest rate (for all increases in interest rate
pursuant to this paragraph (e) whenever they occur) will in no event exceed
1.00%. Upon (x) the filing of the Exchange Offer Registration Statement after
the 30-day period described in clause (i) above, (y) the effectiveness of the
Exchange Offer Registration Statement after the 90-day period described in
clause (ii) above or (z) the day before the date of the consummation of the
Exchange Offer or the effectiveness of a Shelf Registration Statement, as the
case may be, after the 120-day period described in clause (iii) above, the
interest rate borne by the Initial Notes from the date of such filing,
effectiveness or the day before the date of consummation, as the case may be,
will be reduced to the original interest rate; PROVIDED, HOWEVER, that, if after
any such reduction in interest rate, a different event specified in clauses (i),
(ii) or (iii) above occurs, the interest rate may again be increased pursuant to
the foregoing conditions.
(f) SPECIFIC ENFORCEMENT. Without limiting the remedies available to
the Initial Purchasers and the Holders, the Company and the Subsidiary
Guarantors each acknowledge that any failure by the Company or any of the
Subsidiary Guarantors to comply with its respective obligations under Section
2(a) and Section 2(b) hereof may result in material irreparable injury to the
Initial Purchasers or the Holders for which there is no adequate remedy
<PAGE>
10
at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, the Initial Purchasers or
any Holder may obtain such relief as may be required to specifically enforce the
Company's and the Subsidiary Guarantors' obligations under Section 2(a) and
Section 2(b) hereof.
3. REGISTRATION PROCEDURES. In connection with the obligations of
the Company and each Subsidiary Guarantor with respect to the Registration
Statements pursuant to Sections 2(a) and 2(b) hereof, the Company and the
Subsidiary Guarantors shall:
(a) prepare and file with the SEC a Registration Statement, within
the time period specified in Section 2, on the appropriate form under the
1933 Act, which form (i) shall be selected by the Company and the
Subsidiary Guarantors, (ii) shall, in the case of a Shelf Registration, be
available for the sale of the Registrable Notes by the selling Holders
thereof and (iii) shall comply as to form in all material respects with the
requirements of the applicable form and include or incorporate by reference
all financial statements required by the SEC to be filed therewith, and use
its best efforts to cause such Registration Statement to become effective
and remain effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary under
applicable law to keep such Registration Statement effective for the
applicable period; cause each Prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule
424 under the 1933 Act; and comply with the provisions of the 1933 Act with
respect to the disposition of all securities covered by each Registration
Statement during the applicable period in accordance with the intended
method or methods of distribution by the selling Holders thereof;
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Notes, at least five days prior to filing, that a Shelf
Registration Statement with respect to the Registrable Notes is being filed
and advising such Holders that the distribution of Registrable Notes will
be made in accordance with the method elected by the Majority Holders; and
(ii) furnish to each Holder of Registrable Notes, to counsel for the
Initial Purchasers, to counsel for the Holders and to each underwriter of
an underwritten offering of Registrable Notes, if any, without charge, as
many copies of each Prospectus, including each preliminary Prospectus, and
any amendment or supplement thereto and such other documents as such Holder
or underwriter may reasonably request, including financial statements and
schedules and, if the Holder so requests, all exhibits (including those
incorporated by reference) in order to facilitate the public sale or other
disposition of the Registrable Notes; and (iii) subject to the last
paragraph of Section 3, hereby consent to the use of the Prospectus or any
amendment or supplement thereto by each
<PAGE>
11
of the selling Holders of Registrable Notes in connection with the offering
and sale of the Registrable Notes covered by the Prospectus or any
amendment or supplement thereto;
(d) use their best efforts to register or qualify the Registrable
Notes under all applicable state securities or "blue sky" laws of such
jurisdictions as any Holder of Registrable Notes covered by a Registration
Statement and each underwriter of an underwritten offering of Registrable
Notes shall reasonably request by the time the applicable Registration
Statement is declared effective by the SEC, to cooperate with the Holders
in connection with any filings required to be made with the NASD, and do
any and all other acts and things which may be reasonably necessary or
advisable to enable such Holder to consummate the disposition in each such
jurisdiction of such Registrable Notes owned by such Holder; PROVIDED,
HOWEVER, that neither the Company nor any Subsidiary Guarantor shall be
required to (i) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d) or (ii) take any action which would
subject it to general service of process or taxation in any such
jurisdiction if it is not then so subject;
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Notes and counsel for the Initial Purchasers promptly and, if
requested by such Holder or counsel, confirm such advice in writing
promptly (i) when a Registration Statement has become effective and when
any post-effective amendments and supplements thereto become effective,
(ii) of any request by the SEC or any state securities authority for post-
effective amendments and supplements to a Registration Statement and
Prospectus or for additional information after the Registration Statement
has become effective, (iii) of the issuance by the SEC or any state
securities authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that
purpose, (iv) if, between the effective date of a Registration Statement
and the closing of any sale of Registrable Notes covered thereby, the
representations and warranties of the Company and the Subsidiary Guarantors
contained in any underwriting agreement, securities sales agreement or
other similar agreement, if any, relating to such offering cease to be true
and correct in all material respects, (v) of the receipt by the Company or
any Subsidiary Guarantor of any notification with respect to the suspension
of the qualification of the Registrable Notes for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, (vi)
of the happening of any event or the discovery of any facts during the
period a Shelf Registration Statement is effective which makes any
statement made in such Registration Statement or the related Prospectus
untrue in any material respect or which requires the making of any changes
in such Registration Statement or Prospectus in order to make the
statements therein not misleading and (vii) of any determination by the
Company or a Subsidiary Guarantor that a post-effective amendment to a
Registration Statement would be appropriate;
<PAGE>
12
(f) (A) in the case of the Exchange Offer, (i) include in the
Exchange Offer Registration Statement a "Plan of Distribution" section
covering the use of the Prospectus included in the Exchange Offer
Registration Statement by broker-dealers who have exchanged their
Registrable Notes for Exchange Notes for the resale of such Exchange Notes,
(ii) furnish to each broker-dealer who desires to participate in the
Exchange Offer, without charge, as many copies of each Prospectus included
in the Exchange Offer Registration Statement, including any preliminary
prospectus, and any amendment or supplement thereto, as such broker-dealer
may reasonably request, (iii) include in the Exchange Offer Registration
Statement a statement that any broker-dealer who holds Registrable Notes
acquired for its own account as a result of market-making activities or
other trading activities (a "Participating Broker-Dealer"), and who
receives Exchange Notes for Registrable Notes pursuant to the Exchange
Offer, may be a statutory underwriter and must deliver a prospectus meeting
the requirements of the 1933 Act in connection with any resale of such
Exchange Notes, (iv) subject to the last paragraph of Section 3, hereby
consent to the use of the Prospectus forming part of the Exchange Offer
Registration Statement or any amendment or supplement thereto, by any
broker-dealer in connection with the sale or transfer of the Exchange Notes
covered by the Prospectus or any amendment or supplement thereto, and (v)
include in the transmittal letter or similar documentation to be executed
by an exchange offeree in order to participate in the Exchange Offer (x)
the following provision:
"If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a
distribution of Exchange Notes. If the undersigned is a broker-dealer
that will receive Exchange Notes for its own account in exchange for
Registrable Notes, it represents that the Registrable Notes to be
exchanged for Exchange Notes were acquired by it as a result of
market-making activities or other trading activities and acknowledges
that it will deliver a prospectus meeting the requirements of the 1933
Act in connection with any resale of such Exchange Notes pursuant to
the Exchange Offer; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the 1933 Act"; and
(y) a statement to the effect that by a broker-dealer making the
acknowledgment described in subclause (x) and by delivering a Prospectus in
connection with the exchange of registrable Securities, the broker-dealer
will not be deemed to admit that it is an underwriter within the meaning
of the 1933 Act; and
(B) to the extent any Participating Broker-Dealer participates in the
Exchange Offer, the Company and each Subsidiary Guarantor shall use its
best efforts to cause to be delivered at the request of an entity
representing the Participating Broker-Dealers
<PAGE>
13
(which entity shall be one of the Initial Purchasers, unless it elects not
to act as such representative) only one, if any, "cold comfort" letter with
respect to the Prospectus in the form existing on the last date for which
exchanges are accepted pursuant to the Exchange Offer and with respect to
each subsequent amendment or supplement, if any, effected during the period
specified in clause (C) below; and
(C) to the extent any Participating Broker-Dealer participates in the
Exchange Offer, the Company and each Subsidiary Guarantor shall use its
best efforts to maintain the effectiveness of the Exchange Offer
Registration Statement for a period of one year following the closing of
the Exchange Offer; and
(D) neither the Company nor any Subsidiary Guarantor shall be
required to amend or supplement the Prospectus contained in the Exchange
Offer Registration Statement as would otherwise be contemplated by
Section 3(b), or take any other action as a result of this Section 3(f),
for a period exceeding 180 days after the last date for which exchanges are
accepted pursuant to the Exchange Offer (as such period may be extended by
the Company) and Participating Broker-Dealers shall not be authorized by
the Company to, and shall not, deliver such Prospectus after such period in
connection with resales contemplated by this Section 3.
(g) (A) in the case of an Exchange Offer, furnish counsel for the
Initial Purchasers and (B) in the case of a Shelf Registration, furnish
counsel for the Holders of Registrable Notes copies of any request by the
SEC or any state securities authority for amendments or supplements to a
Registration Statement and Prospectus or for additional information;
(h) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement as soon as
practicable and provide immediate notice to each Holder of the withdrawal
of any such order;
(i) in the case of a Shelf Registration, furnish to each Holder of
Registrable Notes, without charge, at least one conformed copy of each
Registration Statement and any post-effective amendment thereto (without
documents incorporated therein by reference or exhibits thereto, unless
requested);
(j) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Notes to facilitate the timely preparation and
delivery of certificates representing Registrable Notes to be sold and not
bearing any restrictive legends; and cause such Registrable Notes to be in
such denominations (consistent with the provisions of the Indenture) and
registered in such names as the selling Holders or the underwriters,
<PAGE>
14
if any, may reasonably request at least one business day prior to the
closing of any sale of Registrable Notes;
(k) in the case of a Shelf Registration, upon the occurrence of any
event or the discovery of any facts, each as contemplated by Section
3(e)(vi) hereof, use its best efforts to prepare a supplement or post-
effective amendment to a Registration Statement or the related Prospectus
or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the purchasers of the
Registrable Notes, such Prospectus will not contain at the time of such
delivery any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company and
the Subsidiary Guarantors agree to notify each Holder to suspend use of the
Prospectus as promptly as practicable after the occurrence of such an
event, and each Holder hereby agrees to suspend use of the Prospectus until
the Company and the Subsidiary Guarantors have amended or supplemented the
Prospectus to correct such misstatement or omission. At such time as such
public disclosure is otherwise made or the Company and the Subsidiary
Guarantors determine that such disclosure is not necessary, in each case to
correct any misstatement of a material fact or to include any omitted
material fact, the Company and the Subsidiary Guarantors agree promptly to
notify each Holder of such determination and to furnish each Holder such
numbers of copies of the Prospectus, as amended or supplemented, as such
Holder may reasonably request;
(l) obtain a CUSIP number for all Exchange Notes, or Registrable
Notes, as the case may be, not later than the effective date of a
Registration Statement, and provide the Trustee with printed certificates
for the Exchange Notes or the Registrable Notes, as the case may be, in a
form eligible for deposit with the Depositary;
(m) (i) cause the Indenture to be qualified under the Trust Indenture
Act of 1939, as amended (the "TIA"), in connection with the registration of
the Exchange Notes, or Registrable Notes, as the case may be,
(ii) cooperate with the Trustee and the Holders to effect such changes to
the Indenture as may be required for the Indenture to be so qualified in
accordance with the terms of the TIA and (iii) execute, and use its best
efforts to cause the Trustee to execute, all documents as may be required
to effect such changes, and all other forms and documents required to be
filed with the SEC to enable the Indenture to be so qualified in a timely
manner;
(n) in the case of a Shelf Registration, enter into agreements
(including underwriting agreements) and take all other customary and
appropriate actions (including those reasonably requested by the Majority
Holders) in order to expedite or facilitate the disposition of such
Registrable Notes and in such connection whether or not an
<PAGE>
15
underwriting agreement is entered into and whether or not the registration
is an underwritten registration:
(i) make such representations and warranties to the Holders of
such Registrable Notes and the underwriters, if any, in form,
substance and scope as are customarily made by issuers to underwriters
in similar underwritten offerings as may be reasonably requested by
them;
(ii) obtain opinions of counsel to the Company and the Subsidiary
Guarantors and updates thereof (which counsel and opinions (in form,
scope and substance) shall be reasonably satisfactory to the managing
underwriters, if any, and the holders of a majority in principal
amount of the Registrable Notes being sold) addressed to each selling
Holder and the underwriters, if any, covering the matters customarily
covered in opinions requested in sales of securities or underwritten
offerings and such other matters as may be reasonably requested by
such Holders and underwriters;
(iii) obtain "cold comfort" letters and updates thereof from
the Company's and the Subsidiary Guarantors' independent certified
public accountants addressed to the underwriters, if any, and will use
best efforts to have such letters addressed to the selling Holders of
Registrable Notes, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters to
underwriters in connection with similar underwritten offerings;
(iv) enter into a securities sales agreement with the Holders and
an agent of the Holders providing for, among other things, the
appointment of such agent for the selling Holders for the purpose of
soliciting purchases of Registrable Notes, which agreement shall be in
form, substance and scope customary for similar offerings;
(v) if an underwriting agreement is entered into, cause the same
to set forth indemnification provisions and procedures substantially
equivalent to the indemnification provisions and procedures set forth
in Section 5 hereof with respect to the underwriters and all other
parties to be indemnified pursuant to said Section; and
(vi) deliver such documents and certificates as may be reasonably
requested and as are customarily delivered in similar offerings.
<PAGE>
16
The above shall be done at (i) the effectiveness of such Registration
Statement (and, if appropriate, each post-effective amendment thereto) and
(ii) each closing under any underwriting or similar agreement as and to the
extent required thereunder. In the case of any underwritten offering, the
Company shall provide written notice to the Holders of all Registrable
Notes of such underwritten offering at least 30 days prior to the filing of
a prospectus supplement for such underwritten offering. Such notice shall
(x) offer each such Holder the right to participate in such underwritten
offering, (y) specify a date, which shall be no earlier than 10 days
following the date of such notice, by which such Holder must inform the
Company of its intent to participate in such underwritten offering and (z)
include the instructions such Holder must follow in order to participate in
such underwritten offering;
(o) in the case of a Shelf Registration, make available for
inspection by representatives of the Holders of the Registrable Notes and
any underwriters participating in any disposition pursuant to a Shelf
Registration Statement and any counsel or accountant retained by such
Holders or underwriters, all financial and other records, pertinent
corporate documents and properties of the Company and the Subsidiary
Guarantors reasonably requested by any such persons, and cause the
respective officers, directors, employees, and any other agents of the
Company and the Subsidiary Guarantors to supply all information reasonably
requested by any such representative, underwriter, special counsel or
accountant in connection with a Registration Statement;
(p) (i) a reasonable time prior to the filing of any Exchange Offer
Registration Statement, any Prospectus forming a part thereof, any
amendment to an Exchange Offer Registration Statement or amendment or
supplement to a Prospectus, provide copies of such document to the Initial
Purchasers, and make such changes in any such document prior to the filing
thereof as any of the Initial Purchasers or their counsel may reasonably
request; (ii) in the case of a Shelf Registration, a reasonable time prior
to filing any Shelf Registration Statement, any Prospectus forming a part
thereof, any amendment to such Shelf Registration Statement or amendment or
supplement to such Prospectus, provide copies of such document to the
Holders of Registrable Notes, to the Initial Purchasers, to counsel on
behalf of the Holders and to the underwriter or underwriters of an
underwritten offering of Registrable Notes, if any, and make such changes
in any such document prior to the filing thereof as the Holders of
Registrable Notes, the Initial Purchasers on behalf of such Holders, their
counsel and any underwriter may reasonably request; and (iii) cause the
representatives of the Company and the Subsidiary Guarantors to be
available for discussion of such document as shall be reasonably requested
by the Holders of Registrable Notes, the Initial Purchasers on behalf of
such Holders or any underwriter and shall not at any time make any filing
of any such document of which such Holders, the Initial Purchasers on
behalf of such Holders, their counsel or any underwriter shall not have
previously been advised and
<PAGE>
17
furnished a copy or to which such Holders, the Initial Purchasers on behalf
of such Holders, their counsel or any underwriter shall reasonably object;
(q) in the case of a Shelf Registration, use their best efforts to
cause all Registrable Securities to be listed on any securities exchange on
which similar debt securities issued by the Company are then listed if
requested by the Majority Holders or by the underwriter or underwriters of
an underwritten offering of Registrable Securities, if any;
(r) in the case of a Shelf Registration, use their best efforts to
cause the Registrable Notes to be rated with the appropriate rating
agencies, if so requested by the Majority Holders or by the underwriter or
underwriters of an underwritten offering of Registrable Notes, if any,
unless the Registrable Notes are already so rated;
(s) otherwise use their best efforts to comply with all applicable
rules and regulations of the SEC and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering
at least 12 months which shall satisfy the provisions of Section 11(a) of
the 1933 Act and Rule 158 thereunder; and
(t) cooperate and assist in any filings required to be made with the
NASD and in the performance of any due diligence investigation by any
underwriter and its counsel.
In the case of a Shelf Registration Statement, the Company and the
Subsidiary Guarantors may (as a condition to such Holder's participation in the
Shelf Registration) require each Holder of Registrable Notes to furnish to the
Company and the Subsidiary Guarantors such information regarding such Holder and
the proposed distribution by such Holder of such Registrable Notes as the
Company and the Subsidiary Guarantors may from time to time reasonably request
in writing.
In the case of a Shelf Registration Statement, each Holder agrees
that, upon receipt of any notice from the Company and the Subsidiary Guarantors
of the happening of any event or the discovery of any facts, each of the kind
described in Section 3(e)(ii)-(vi) hereof, such Holder will forthwith
discontinue disposition of Registrable Notes pursuant to a Registration
Statement until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 3(k) hereof, and, if so directed by
the Company and the Subsidiary Guarantors, such Holder will deliver to the
Company and the Subsidiary Guarantors (at their expense) all copies in its
possession, other than permanent file copies then in such Holder's possession,
of the Prospectus covering such Registrable Notes current at the time of receipt
of such notice. If the Company and the Subsidiary Guarantors shall give any
such notice to suspend the disposition of Registrable Notes pursuant to a Shelf
Registration Statement as a result of the happening of any event or the
discovery of any facts, each of the kind described
<PAGE>
18
in Section 3(e)(vi) hereof, the Company and the Subsidiary Guarantors shall be
deemed to have used its best efforts to keep the Shelf Registration Statement
effective during such period of suspension provided that the Company and each
Subsidiary Guarantor shall use its best efforts to file and have declared
effective (if an amendment) as soon as practicable an amendment or supplement to
the Shelf Registration Statement and shall extend the period during which the
Registration Statement shall be maintained effective pursuant to this Agreement
by the number of days during the period from and including the date of the
giving of such notice to and including the date when the Holders shall have
received copies of the supplemented or amended Prospectus necessary to resume
such dispositions.
4. UNDERWRITTEN REGISTRATIONS. If any of the Registrable Notes
covered by any Shelf Registration are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
manage the offering will be selected by the Majority Holders of such Registrable
Notes included in such offering and shall be reasonably acceptable to the
Company and the Subsidiary Guarantors.
No Holder of Registrable Notes may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Notes on the basis provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
5. INDEMNIFICATION AND CONTRIBUTION. (a) The Company and each
Subsidiary Guarantor, jointly and severally, shall indemnify and hold harmless
each Initial Purchaser, each Holder, including Participating Broker-Dealers,
each underwriter who participates in an offering of Registrable Notes, their
respective affiliates, and their respective directors, officers, employees,
agents and each Person, if any, who controls any of such parties within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all losses, liabilities, claims, damages and
expenses whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) pursuant to which Exchange Notes or
Registrable Notes were registered under the 1933 Act, including all
documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
<PAGE>
19
(ii) against any and all losses, liabilities, claims, damages and
expenses whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company and the Subsidiary Guarantors; and
(iii) against any and all expenses whatsoever, as incurred
(including fees and disbursements of counsel chosen by any indemnified
party), reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any court or
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under subparagraph (i) or (ii) of this Section 5(a);
PROVIDED, HOWEVER, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company or a Subsidiary
Guarantor by the Initial Purchasers, any Holder, including Participating Broker-
Dealers or any underwriter expressly for use in the Registration Statement (or
any amendment thereto) or the Prospectus (or any amendment or supplement
thereto).
(b) In the case of a Shelf Registration, each Holder agrees,
severally and not jointly, to indemnify and hold harmless the Company, each
Subsidiary Guarantor, each Initial Purchaser, each underwriter who participates
in an offering of Registrable Notes and the other selling Holders and each of
their respective directors and officers (including each officer of the Company
and any Subsidiary Guarantor who signed the Registration Statement) and each
Person, if any, who controls the Company or any Subsidiary Guarantor, any
Initial Purchaser, any underwriter or any other selling Holder within the
meaning of Section 15 of the 1933 Act, against any and all losses, liabilities,
claims, damages and expenses described in the indemnity contained in Section
5(a) hereof, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company or a Subsidiary Guarantor by such Holder, as the case
may be, expressly for use in the Registration Statement (or any amendment
thereto), or the Prospectus (or any amendment or supplement thereto); PROVIDED,
HOWEVER, that no such Holder shall be liable for any claims hereunder in excess
of the amount of net proceeds received by such Holder from the sale of
Registrable Notes pursuant to such Shelf Registration Statement.
<PAGE>
20
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it may
have other than on account of this indemnity agreement. An indemnifying party
may participate at its own expense in the defense of such action. In no event
shall the indemnifying party or parties be liable for the fees and expenses of
more than one counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
(d) In order to provide for just and equitable contribution in
circumstances in which any of the indemnity provisions set forth in this
Section 5 are for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company and the Subsidiary
Guarantors, the Initial Purchasers and the Holders shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement incurred by the Company and the
Subsidiary Guarantors, the Initial Purchasers and the Holders, as incurred;
PROVIDED, HOWEVER, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any Person that was not guilty of such fraudulent misrepresentation. As
between the Company and the Subsidiary Guarantors, the Initial Purchasers and
the Holders, such parties shall contribute to such aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement in such proportion as shall be appropriate to reflect
(i) the relative benefits received by the Company and the Subsidiary Guarantors
on the one hand, the Initial Purchasers on another hand, and the Holders on
another hand, from the offering of the Exchange Notes or Registrable Notes
included in such offering, and (ii) the relative fault of the Company and the
Subsidiary Guarantors on the one hand, the Initial Purchasers on another hand,
and the Holders on another hand, with respect to the statements or omissions
which resulted in such loss, liability, claim, damage or expense, or action in
respect thereof, as well as any other relevant equitable considerations. The
Company, the Subsidiary Guarantors, the Initial Purchasers and the Holders of
the Registrable Notes agree that it would not be just and equitable if
contribution pursuant to this Section 5 were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the relevant equitable considerations. For purposes of this Section 5, each
affiliate of an Initial Purchaser or a Holder, and each director, officer,
employee, agent and Person, if any, who controls an Initial Purchaser or a
Holder or such affiliate within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Initial Purchaser or such Holder, and each director of the Company and each of
the Subsidiary Guarantors, each officer of the Company and each of the
Subsidiary Guarantors who signed the Registration Statement, and each Person, if
any, who controls the Company or any Subsidiary Guarantor within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company and such Subsidiary Guarantor. The
parties hereto agree that any underwriting discount or commission or
reimbursement of fees paid
<PAGE>
21
to any Initial Purchaser pursuant to the Purchase Agreement shall not be deemed
to be a benefit received by any Initial Purchaser in connection with the
offering of the Exchange Notes or Registrable Notes included in such offering.
6. MISCELLANEOUS. (a) RULE 144 AND RULE 144A. For so long as the
Company or any Subsidiary Guarantor is subject to the reporting requirements of
Section 13 or 15 of the 1934 Act, the Company and such Subsidiary Guarantor,
jointly and severally, covenant that it will file the reports required to be
filed by it under Section 13(a) or 15(d) of the 1934 Act and the rules and
regulations adopted by the SEC thereunder, that if it ceases to be so required
to file such reports, it will upon the request of any Holder of Registrable
Notes (i) make publicly available such information as is necessary to permit
sales pursuant to Rule 144 under the 1933 Act, (ii) deliver such information to
a prospective purchaser as is necessary to permit sales pursuant to Rule 144A
under the 1933 Act and it will take such further action as any Holder of
Registrable Notes may reasonably request, and (iii) take such further action
that is reasonable in the circumstances, in each case, to the extent required
from time to time to enable such Holder to sell its Registrable Notes without
registration under the 1933 Act within the limitation of the exemptions provided
by (x) Rule 144 under the 1933 Act, as such Rule may be amended from time to
time, (y) Rule 144A under the 1933 Act, as such Rule may be amended from time to
time, or (z) any similar rules or regulations hereafter adopted by the SEC.
Upon the request of any Holder of Registrable Notes, the Company and the
Subsidiary Guarantors will deliver to such Holder a written statement as to
whether it has complied with such requirements.
(b) NO INCONSISTENT AGREEMENTS. Neither the Company nor any
Subsidiary Guarantor has entered into nor will the Company or any Subsidiary
Guarantor on or after the date of this Agreement enter into any agreement which
is inconsistent with the rights granted to the Holders of Registrable Notes in
this Agreement or otherwise conflicts with the provisions hereof. The rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's or any
Subsidiary Guarantor's other issued and outstanding securities under any such
agreements.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company and the Subsidiary Guarantors have obtained
the written consent of Holders of at least a majority in aggregate principal
amount of the outstanding Registrable Notes affected by such amendment,
modification, supplement, waiver or departure; PROVIDED, HOWEVER, that no
amendment, modification, supplement or waiver or consent to any departure from
the provisions of Section 5 hereof shall be effective as against any Holder of
Registrable Notes unless consented to in writing by such Holder.
<PAGE>
22
(d) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telex, telecopier, or any courier guaranteeing overnight delivery
(i) if to a Holder, at the most current address given by such Holder to the
Company by means of a notice given in accordance with the provisions of this
Section 6(d), which address initially is, with respect to the Initial
Purchasers, the address set forth in the Purchase Agreement; and (ii) if to the
Company or any Subsidiary Guarantor, or all of them, initially at the Company's
address set forth in the Purchase Agreement and thereafter at such other
address, notice of which is given in accordance with the provisions of this
Section 6(d).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the person giving the same to the Trustee, at the
address specified in the Indenture.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; PROVIDED that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Notes in violation of the terms hereof or of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Registrable Notes, in
any manner, whether by operation of law or otherwise, such Registrable Notes
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Notes, such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement, including the restrictions on resale set forth in this Agreement and,
if applicable, the Purchase Agreement, and such Person shall be entitled to
receive the benefits hereof.
(f) THIRD PARTY BENEFICIARY. The Initial Purchasers shall be third
party beneficiaries to the agreements made hereunder between the Company and the
Subsidiary Guarantors, on the one hand, and the Holders, on the other hand, and
shall have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed
<PAGE>
23
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
<PAGE>
24
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
THE ALPINE GROUP, INC.
By
------------------------------
Name:
Title:
ADIENCE, INC.
By
------------------------------
Name:
Title:
SUPERIOR TELECOMMUNICATIONS INC.
By
------------------------------
Name:
Title:
SUPERIOR CABLE CORPORATION
By
------------------------------
Name:
Title:
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
NOMURA SECURITIES INTERNATIONAL, INC.
FIRST ALBANY CORPORATION
By: MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
By:______________________________
Name:
Title:
<PAGE>
THE ALPINE GROUP, INC.
12 1/4% Senior Secured Note due 2003
Cusip No. 02085AC9
No. R-2 $1,000,000.00
THE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR OTHER SECURITIES LAWS. NEITHER
THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION. THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE PRIOR TO THE DATE WHICH
IS THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
NOTE (OR ANY PREDECESSOR OF THIS NOTE) ONLY (A) TO THE COMPANY, (B) PURSUANT TO
A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT
TO OFFERS AND SALE TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPHS (a)(1),
(a)(2), (a)(3) OR (a)(7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING
THE NOTE FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR", FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER,
<PAGE>
2
SALE OR TRANSFER (i) PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS NOTE IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.
<PAGE>
3
This Note is issued with original issue discount and the following
information is supplied for purposes of Sections 1273 and 1275 of the Internal
Revenue Code.
Issue Date: July 21, 1995 Original issue discount under Section 1273
of the Internal Revenue Code (for each
$1,000 principal amount): $82.63
Issue Price (for each $1,000 Yield to Maturity: 14% compounded
principal amount): $917.37 semiannually on each January 15 and July 15
commencing January 15, 1996 (computed
without giving effect to any additional
payments of interest in the event the issuer
fails to consummate an exchange offer or
cause a registration statement to be
declared effective, in each case as
described on the reverse hereof)
The Alpine Group, Inc., a corporation organized under the laws of Delaware
(the "Company", which term includes any successor entity under the Indenture
hereinafter referred to), for value received, hereby promises to pay to Merrill
Lynch, Pierce, Fenner & Smith Incorporated or registered assigns, the principal
sum of One Million Dollars on July 15, 2003, at the office or agency of Alpine
referred to below, and to pay interest thereon on January 15, 1996 and
semiannually thereafter, on January 15 and July 15 in each year, from July 21,
1995 or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, at the rate of 12 1/4% per annum until the principal
hereof is paid or duly provided for, and (to the extent lawful) to pay on demand
interest on any overdue interest at the rate borne by the Notes from the date of
the Interest Payment Date on which such overdue interest becomes payable to the
date payment of such interest has been made or duly provided for. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person in whose name
this Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest, which shall be the
January 1 or July 1 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for, and interest on such defaulted interest at the interest
rate borne by the Notes, to the extent lawful, shall forthwith cease to be
payable to the Holder on such Regular Record Date, and may be paid to the Person
in whose name this Note (or one or more Predecessor Notes) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Notes not less than 10 days prior to such Special Record Date, or may be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in said
Indenture.
<PAGE>
4
The Holder of this Note is entitled to the benefits of the Registration
Rights Agreement, dated as of July 21, 1995, among the Company, the Subsidiary
Guarantors and the Initial Purchasers named therein (the "Registration Rights
Agreement"). In the event that either (a) an Exchange Offer Registration
Statement (as such term is defined in the Registration Rights Agreement) is not
filed with the Securities and Exchange Commission on or prior to the 30th day
following the date of original issue of the Notes, (b) such Exchange Offer
Registration Statement has not been declared effective on or prior to the 90th
day following the date of original issue of the Notes or (c) the Exchange Offer
(as such term is defined in the Registration Rights Agreement) is not
consummated or a Shelf Registration Statement (as such term is defined in the
Registration Rights Agreement) is not declared effective on or prior to the
120th day following the date of original issue of the Notes, the interest rate
borne by this Note shall be increased by 0.25% per annum, which rate will be
increased by an additional one-quarter of one percent per annum for each 90-day
period that any such additional interest continues to accrue: PROVIDED that the
aggregate increase in such interest rate will in no event exceed 1.00%. Upon
(x) the filing of the Exchange Offer Registration Statement after the 30-day
period described in clause (a) above, (y) the effectiveness of the Exchange
Offer Registration Statement after the 90-day period described in clause (b)
above or (z) the day before the date of the consummation of the Exchange Offer
or the effectiveness of a Shelf Registration Statement, as the case may be,
after the 120-day period described in clause (c) above, the interest rate borne
by this Note from the date of such filing, effectiveness or the day before the
date of consummation, as the case may be, will be reduced to the original
interest rate set forth above, PROVIDED, HOWEVER, that, if after such
reduction in interest rate, a different event specified in clauses (a), (b) or
(c) above occurs, the interest rate may again be increased pursuant to the
foregoing provisions.
Payment of the principal of, (and premium, if any) and interest on the
Notes will be made at the office or agency of the Company maintained for that
purpose in The City of New York (which shall be the Corporate Trust Office of
the Trustee, unless the Company shall designate and maintain some other office
or agency for such purpose), or at such other office or agency of the Company as
may be maintained for such purpose, in lawful money of the United States of
America; PROVIDED, HOWEVER, that payment of interest may be made at the option
of the Company by (i) check mailed to the address of the Person entitled thereto
as such address shall appear on the Register or (ii) by transfer to an account
maintained by the payee located in the United States.
Reference is hereby made to the further provisions of the Notes set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
<PAGE>
5
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: 7/21/95 THE ALPINE GROUP, INC.
By
--------------------------------------
Attest:
------------------------
Authorized Signature
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
MARINE MIDLAND BANK, as Trustee
By
--------------------------------------
Authorized Signature
<PAGE>
6
This Note is one of a duly authorized issue of securities of the Company
designated as its 12 1/4% Senior Secured Notes due 2003 (herein called the
"Notes"), limited (except as otherwise provided in the Indenture referred to
below) in aggregate principal amount of $153,000,000, which may be issued under
an indenture (herein called the "Indenture") dated as of July 15, 1995, among
the Company, Superior Telecommunications, Inc., a corporation organized under
the laws of the State of Georgia ("Superior"), Adience, Inc., a corporation
organized under the laws of the State of Delaware ("Adience") and Superior Cable
Corporation, a corporation organized under the laws of Ontario, Canada
("Superior Canada" and together with Superior and Adience, the "Subsidiary
Guarantors", which term will include all successor guarantors under the
Indenture) and Marine Midland Bank, trustee (herein called the "Trustee", which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, the Subsidiary Guarantors, the Trustee and the
Holders of the Notes, and of the terms upon which the Notes are, and are to be,
authenticated and delivered.
As provided in the Indenture, the Notes are secured by the pledge to the
Trustee pursuant to the Pledge Agreement. Each Holder by accepting a Note shall
be bound by and be entitled to the benefits of the Pledge Agreement, as the same
may be amended from time to time pursuant to the respective provisions thereof
and of the Indenture.
On or before each payment date, the Company shall deliver or cause to be
delivered to the Trustee or the Paying Agent an amount in dollars sufficient to
pay the amount due on such payment date.
The Notes will be redeemable at the option of the Company, as a whole or
from time to time in part, at any time on or after July 15, 1999, on not less
than 30 nor more than 60 days' prior notice at the Redemption Prices (expressed
as percentages of principal amount at maturity) set forth below, together with
accrued interest, if any, to the Redemption Date, if redeemed during the 12-
month period beginning on July 15 of the years indicated below (subject to the
right of holders of record on relevant record dates to receive interest due on
an Interest Payment Date):
Redemption
Year Price
---- ----------
1999. . . . . . . . . . . . . 103%
2000. . . . . . . . . . . . . 102
2001. . . . . . . . . . . . . 101
and thereafter at 100% of the principal amount at maturity, together with
accrued interest, if any, to the Redemption Date.
<PAGE>
7
In addition to the optional redemption of the Notes in accordance with the
provisions of the preceding paragraph, during the two years after the original
issue date of the Initial Notes, the Company may, with the net proceeds of one
or more public offerings of its Common Stock, redeem up to 33 1/3% of the
original aggregate principal amount at maturity of the Notes at 104 1/2% of the
principal amount at maturity thereof for any such redemption, together with
accrued interest, if any, to the Redemption Date, (subject to the right of
holders of record on relevant record dates to receive interest due on an
Interest Payment Date); PROVIDED, HOWEVER, that at least 66 2/3% of the original
aggregate principal amount at maturity of the Notes remains outstanding
thereafter.
If less than all of the Notes are to be redeemed, the particular Notes to
be redeemed will be selected not more than 60 days prior to the Redemption Date
by the Trustee PRO RATA, by lot or by such method as the Trustee deems fair and
appropriate.
In the case of any redemption of Notes, interest installments whose Stated
Maturity is on or prior to the Redemption Date will be payable to the Holders of
such Notes, or one or more Predecessor Notes, of record at the close of business
on the relevant record date referred to on the face hereof. Notes for whose
redemption and payment provision is made in accordance with the Indenture shall
cease to bear interest from and after the Redemption Date.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company on this Note and (b) certain restrictive
covenants and the related Defaults and Events of Default, upon compliance by the
Company with certain conditions set forth therein, which provisions apply to
this Note.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the Subsidiary Guarantors and the rights of the Holders under the
Indenture at any time by the Company, the Subsidiary Guarantors and the Trustee
with the consent of the Holders of a majority in aggregate principal amount of
the Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Notes at the time Outstanding, on behalf of the Holders of all the Notes, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by or on behalf of the Holder of this Note shall be conclusive
and binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange herefor or
in lieu hereof whether or not notation of such consent or waiver is made upon
this Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company or the
Subsidiary Guarantors (in the event the Subsidiary Guarantors are obligated to
make payments in respect of the Notes), which is absolute and unconditional, to
pay the principal of (and premium, if any) and interest on this Note at the
times, place and rate, and in the coin or currency, herein prescribed.
<PAGE>
8
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable on the Register of the Company,
upon surrender of this Note for registration of transfer at the office or agency
of the Company maintained for such purpose in The City of New York, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more
replacement Notes, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Notes are
exchangeable for a like aggregate principal amount of Notes of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Company may require payment of a sum
sufficient to pay all documentary, stamp or similar issue or transfer taxes or
other governmental charges payable in connection with any registration of
transfer or exchange.
The Notes are entitled to the benefit of a Subsidiary Guarantee by each
Subsidiary Guarantor to the extent provided in each such Subsidiary Guarantee.
Prior to the time of due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the Company,
the Trustee nor any agent shall be affected by notice to the contrary.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
<PAGE>
9
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
INSERT TAXPAYER IDENTIFICATION NO.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
please print or typewrite name and address including zip code of assignee
--------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
--------------------------------------------------------------------------------
attorney to transfer said Note on the books of the Company with full power of
substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES
EXCEPT PERMANENT OFFSHORE PHYSICAL
CERTIFICATES
In connection with any transfer of this Note occurring prior to the date
that is the earlier of the date of an effective Registration Statement or
July 21, 1998, the undersigned confirms that without utilizing any general
solicitation or general advertising that:
[CHECK ONE]
[ ] (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by
Rule 144A thereunder.
OR
[ ] (b) this Note is being transferred other than in accordance with (a) above
and documents are being furnished that comply with the conditions of
transfer set forth in this Note and the Indenture.
<PAGE>
10
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 307 of the Indenture shall have
been satisfied.
Dated:
------------------------------ ---------------------------------------------
NOTICE: The signature must correspond with
the name as written upon the face of the
within mentioned instrument in every
particular, without alteration or any change
whatsoever.
Signature Guarantee:
-----------------------------------
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933, as amended,
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
------------------------------ ---------------------------------------------
NOTICE: To be executed by an executive
officer.
<PAGE>
THE ALPINE GROUP, INC.
12 1/4% Series B Senior Secured Note due 2003
Cusip No. 02085AC9
NO. $
------------- --------------------
The Note is issued with original issue discount and the following
information is supplied for purposes of Sections 1273 and 1275 of the Internal
Revenue Code:
Issue Date: Original issue discount under Section
1273 of the Internal Revenue Code (for
each $1,000 principal amount): $82.63
Issue Price (for each $1,000 Yield to Maturity: 14% compounded semi-
principal amount): $917.37 annually on each January 15 and July 15
commencing January 15, 1996 (computed
without giving effect to any additional
payments of interest in the event the
issuer fails to consummate an exchange
offer or cause a registration statement
to be declared effective, in each case
as described on the reverse hereof)
The Alpine Group, Inc., a corporation organized under the laws of
Delaware (the "Company", which term includes any successor entity under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to _________________ or registered assigns, the principal sum of ______________
Dollars on July 15, 2003, at the office or agency of Alpine referred to below,
and to pay interest thereon on January 15, 1996 and semiannually thereafter, on
January 15 and July 15 in each year, from July 21, 1995 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for, at
the rate of 12 1/4% per annum until the principal hereof is paid or duly
provided for, and (to the extent lawful) to pay on demand interest on any
overdue interest at the rate borne by the Notes from the date of the Interest
Payment Date on which such overdue interest becomes payable to the date payment
of such interest has been made or duly provided for. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Note (or
one or more Predecessor Notes) is registered
<PAGE>
at the close of business on the Regular Record Date for such interest, which
shall be the January 1 or July 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for, and interest on such defaulted interest at
the interest rate borne by the Notes, to the extent lawful, shall forthwith
cease to be payable to the Holder on such Regular Record Date, and may be paid
to the Person in whose name this Note (or one or more Predecessor Notes) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Notes not less than 10 days prior to such Special Record
Date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Notes may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture.
Payment of the principal of (and premium, if any) and interest on the
Notes will be made at the office or agency of the Company maintained for that
purpose in The City of New York (which shall be the Corporate Trust Office of
the Trustee, unless the Company shall designate and maintain some other office
or agency for such purpose), or at such other office or agency of the Company as
may be maintained for such purpose, in lawful money of the United States of
America; PROVIDED, HOWEVER, that payment of interest may be made at the option
of the Company by (i) check mailed to the address of the Person entitled thereto
as such address shall appear on the Register or (ii) by transfer to an account
maintained by the payee located in the United States.
Reference is hereby made to the further provisions of the Notes set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: THE ALPINE GROUP, INC.
By
--------------------------------
Attest:
-----------------------------
Authorized Signature
<PAGE>
FORM OF REVERSE OF NOTE.
This Note is one of a duly authorized issue of securities of the
Company designated as its 12 1/4% Series B Senior Secured Notes due 2003 (herein
called the "Notes"), limited (except as otherwise provided in the Indenture
referred to below) in aggregate principal amount to $153,000,000, which may be
issued under an indenture (herein called the "Indenture") dated as of July 15,
1995, among the Company, Superior Telecommunications, Inc., a corporation
organized under the laws of the State of Georgia ("Superior"), Adience, Inc., a
corporation organized under the laws of the State of Delaware ("Adience") and
Superior Cable Corporation, a corporation organized under the laws of Ontario,
Canada ("Superior Canada" and together with Superior and Adience, the
"Subsidiary Guarantors", which term will include all successor guarantors under
the Indenture) and Marine Midland Bank, trustee (herein called the "Trustee",
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties, obligations
and immunities thereunder of the Company, the Subsidiary Guarantors, the Trustee
and the Holders of the Notes, and of the terms upon which the Notes are, and are
to be, authenticated and delivered.
As provided in the Indenture, the Notes are secured by the pledge to
the Trustee pursuant to the Pledge Agreement. Each Holder by accepting a Note
shall be bound by and be entitled to the benefits of the Pledge Agreement, as
the same may be amended from time to time pursuant to the respective provisions
thereof and of the Indenture.
On or before each payment date, the Company shall deliver or cause to
be delivered to the Trustee or the Paying Agent an amount in dollars sufficient
to pay the amount due on such payment date.
The Notes will be redeemable at the option of the Company, as a whole
or from time to time in part, at any time on or after July 15, 1999, on not less
than 30 nor more than 60 days' prior notice at the Redemption Prices (expressed
as percentages of principal amount at maturity) set forth below, together with
accrued interest, if any, to the Redemption Date, if redeemed during the 12-
month period beginning on July 15 of the years indicated below (subject to the
right of holders of record on relevant record dates to receive interest due on
an Interest Payment Date):
Redemption
Year Price
---- ----------
1999. . . . . . . . . . . . . . . . . . 103%
2000. . . . . . . . . . . . . . . . . . 102
2001. . . . . . . . . . . . . . . . . . 101
<PAGE>
and thereafter at 100% of the principal amount at maturity, together with
accrued interest, if any, to the Redemption Date.
In addition to the optional redemption of the Notes in accordance with
the provisions of the preceding paragraph, during the two years after the
original issue date of the Initial Notes, the Company may, with the net proceeds
of one or more public offerings of its Common Stock, redeem up to 33 1/8% of the
original aggregate principal amount at maturity of the Notes at 104 1/2% of the
principal amount at maturity thereof for any such redemption, together with
accrued interest, if any, to the Redemption Date (subject to the right of
holders of record on relevant record dates to receive interest due on an
Interest Payment Date); PROVIDED, HOWEVER, that at least 66 2/3% of the original
aggregate principal amount at maturity of the Notes remains outstanding
thereafter.
If less than all of the Notes are to be redeemed, the particular Notes
to be redeemed will be selected not more than 60 days prior to the Redemption
Date by the Trustee PRO RATA, by lot or by such method as the Trustee deems fair
and appropriate.
In the case of any redemption of Notes, interest installments whose
Stated Maturity is on or prior to the Redemption Date will be payable to the
Holders of such Notes, or one or more Predecessor Notes, of record at the close
of business on the relevant record date referred to on the face hereof. Notes
for whose redemption and payment provision is made in accordance with the
Indenture shall cease to bear interest from and after the Redemption Date.
The Indenture contains provisions for defeasance at any time of (a)
the entire indebtedness of the Company on this Note and (b) certain restrictive
covenants and the related Defaults and Events of Default, upon compliance by the
Company with certain conditions set forth therein, which provisions apply to
this Note.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the Subsidiary Guarantors and the rights of the Holders under the
Indenture at any time by the Company, the Subsidiary Guarantors and the Trustee
with the consent of the Holders of a majority in aggregate principal amount of
the Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Notes at the time Outstanding, on behalf of the Holders of all the Notes, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by or on behalf of the Holder of this Note shall be conclusive
and binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange herefor or
in lieu hereof whether or not notation of such consent or waiver is made upon
this Note.
<PAGE>
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company or the
Subsidiary Guarantors (in the event the Subsidiary Guarantors are obligated to
make payments in respect of the Notes), which is absolute and unconditional, to
pay the principal of (and premium, if any) and interest on this Note at the
times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable on the Register of
the Company, upon surrender of this Note for registration of transfer at the
office or agency of the Company maintained for such purpose in The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more
replacement Notes, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Notes are
exchangeable for a like aggregate principal amount of Notes of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Company may require payment of a sum
sufficient to pay all documentary, stamp or similar issue or transfer taxes or
other governmental charges payable in connection with any registration of
transfer or exchange.
The Notes are entitled to the benefit of a Subsidiary Guarantee by
each Subsidiary Guarantor to the extent provided in each such Subsidiary
Guarantee.
Prior to the time of due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the Company,
the Trustee nor any agent shall be affected by notice to the contrary.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
<PAGE>
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
INSERT TAXPAYER IDENTIFICATION NO.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
please print or typewrite name and address including zip code of assignee
--------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
--------------------------------------------------------------------------------
attorney to transfer said Note on the books of the Company with full power of
substitution in the premises.
In connection with any transfer of this Note occurring prior to the
date that is the earlier of the date of an effective Registration Statement or
July 21, 1998, the undersigned confirms that without utilizing any general
solicitation or general advertising that:
[CHECK ONE]
[ ] (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by
Rule 144A thereunder.
OR
[ ] (b) this Note is being transferred other than in accordance with (a) above
and documents are being furnished that comply with the conditions of
transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 307 of the Indenture shall have
been satisfied.
Date:
------------------------------ ----------------------------------------
<PAGE>
NOTICE: The signature must correspond
with the name as written upon the face
of the within-mentioned instrument in
every particular, without alteration or
any change whatsoever.
Signature Guarantee:
---------------------------------
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:
------------------------------ ----------------------------------------
NOTICE: To be executed by an executive
officer.
<PAGE>
EXHIBIT 23(A)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-4 of our report dated June
16, 1995 included in The Alpine Group, Inc.'s Form 10-K for the year ended April
30, 1995 and to all references to our Firm included in this registration
statement.
ARTHUR ANDERSEN LLP
New York, New York
August 16, 1995
<PAGE>
EXHIBIT 23(B)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-4 of The Alpine Group, Inc. of our
post-emergence report dated March 28, 1994, except for Notes 1, 6 and 7, which
are as of October 12, 1994 and our pre-emergence report dated March 28, 1994
relating to the financial statements of Adience, Inc. which appear in such
Prospectus. We also consent to the reference to us under the heading "Experts"
in such Prospectus.
PRICE WATERHOUSE LLP
Pittsburgh, Pennsylvania
August 16, 1995
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each director and officer whose
signature appears below hereby constitutes and appoints Steven S. Elbaum and
Bragi F. Schut, or either of them, as his true and lawful attorney-in-fact and
agent, with full power of substitution, to sign on his behalf individually and
in any and all capacities any and all amendments (including post-effective
amendments) to a Registration Statement on Form S-4 (or other appropriate form)
and to file the same with all exhibits thereto and all other documents in
connection therewith with the Securities and Exchange Commission, granting to
such attorneys-in-fact and agents, and each of them, full power and authority to
do all such other acts and things requisite or necessary to be done, and to
execute all such other documents as they, or either of them, may deem necessary
or desirable in connection with the foregoing, as fully as the undersigned might
or could do in person, hereby ratifying and confirming all that such
attorneys-if-fact and agents, or either of them, may lawfully do or cause to be
done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------------------------------------------- ---------------------------------------------- ------------------
<C> <S> <C>
/s/STEVEN S. ELBAUM Chairman of the Board and Chief Executive
Steven S. Elbaum Officer (prinicpal executive officer) August 16, 1995
Chief Financial Officer and
/s/DAVID S. ALDRIDGE Treasurer (principal financial and accounting August 16, 1995
David S. Aldridge officer)
/s/KENNETH G. BYERS, JR.
Kenneth G. Byers, Jr. Director August 16, 1995
/s/RANDOLPH HARRISON
Randolph Harrison Director August 16, 1995
/s/JOHN C. JANSING
John C. Jansing Director August 16, 1995
/s/ERNEST C. JANSON, JR.
Ernest C. Janson, Jr. Director August 16, 1995
/s/JAMES R. KANELY
James R. Kanely Director August 16, 1995
/s/GENE E. LEWIS
Gene E. Lewis Director August 16, 1995
/s/BRAGI F. SCHUT
Bragi F. Schut Director August 16, 1995
</TABLE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
----------------------
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
----------------------
MARINE MIDLAND BANK
(Exact name of trustee as specified in its charter)
New York 16-1057879
(Jurisdiction of incorporation (I.R.S. Employer
or organization if not a U.S. Identification No.)
national bank)
140 Broadway, New York, N.Y. 10005-1180
(212) 658-1000 (Zip Code)
(Address of principal executive offices)
Eric Parets
Senior Vice President
140 Broadway
New York, New York 10005-1180
Tel: (212) 658-6560
(Name, address and telephone number of agent for service)
THE ALPINE GROUP, INC.
(Exact name of obligor as specified in its charter)
Delaware 22-1620387
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1790 Broadway
New York, New York 10019
(212) 757-3333 (Zip Code)
(Address of principal executive offices)
12 1/4% SERIES B SENIOR SECURED NOTES DUE 2003
(Title of Indenture Securities)
<PAGE>
General
Item 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory
authority to which it is subject.
State of New York Banking Department.
Federal Deposit Insurance Corporation, Washington, D.C.
Board of Governors of the Federal Reserve System,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe
each such affiliation.
None
<PAGE>
Item 16. LIST OF EXHIBITS.
Exhibit
-------
T1A(i) * - Copy of the Organization Certificate of
Marine Midland Bank.
T1A(ii) * - Certificate of the State of New York
Banking Department dated December 31,
1993 as to the authority of Marine
Midland Bank to commence business.
T1A(iii) - Not applicable.
T1A(iv) * - Copy of the existing By-Laws of Marine
Midland Bank as adopted on January 20,
1994.
T1A(v) - Not applicable.
T1A(vi) * - Consent of Marine Midland Bank required
by Section 321(b) of the Trust Indenture
Act of 1939.
T1A(vii) - Copy of the latest report of condition
of the trustee (March 31, 1995),
published pursuant to law or the
requirement of its supervisory or
examining authority.
T1A(viii) - Not applicable.
T1A(ix) - Not applicable.
* Exhibits previously filed with the Securities and Exchange Commission
with Registration No. 33-53693 and incorporated herein by reference
thereto.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
Marine Midland Bank, a banking corporation and trust company organized under the
laws of the State of New York, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York on the 16th day of August 1995.
MARINE MIDLAND BANK
By:/s/ Frank J. Godino
----------------------------
Frank J. Godino
Corporate Trust Officer
<PAGE>
Exhibit T1A(vii)
This form is for use by State Banks only. It should be
used for publication purposes only, and should not be
returned to the FDIC.
Federal Reserve Bank
Administrator of State Banks
REPORT OF CONDITION
Consolidated Report of Condition of Marine Midland Bank
of Buffalo, New York and Foreign and Domestic
Subsidiaries, a member of the Federal Reserve System, at
the close of business on March 31, 1995, published in
accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the
Federal Reserve Act.
ASSETS
<TABLE>
<CAPTION>
Thousands
of dollars
<S> <C>
Cash and balances due from depository
institutions:
Noninterest-bearing balances
currency and coin....................................$974,096
Interest-bearing balances ........................... 897,640
Held-to-maturity securities.........................2,095,379
Available-for-sale securities........................ 43,753
Federal Funds sold and securities purchased
under agreements to resell in domestic
offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
Federal funds sold................................... 782,000
Securities purchased under
agreements to resell................................. 317,383
Loans and lease financing receivables:
Loans and leases net of unearned
income............................... 12,647,803
<PAGE>
LESS: Allowance for loan and lease
losses............................... 540,156
LESS: Allocated transfer risk reserve 0
Loans and lease, net of unearned
income, allowance, and reserve.......................12,107,647
Trading assets....................................... 399,701
Premises and fixed assets (including
capitalized leases).................................. 182,043
Other real estate owned................................. 21,078
Investments in unconsolidated
subsidiaries and associated companies................... 0
Customers' liability to this bank on
acceptances outstanding................................. 20,189
Intangible assets....................................... 61,282
Other assets............................................ 656,014
Total assets............................................18,558,205
LIABILITIES
Deposits:
In domestic offices..................................12,873,835
Noninterest-bearing.................. 2,935,310
Interest-bearing..................... 9,938,525
In foreign offices, Edge, and Agreement
subsidiaries, and IBFs.................................. 2,509,707
Noninterest-bearing.................. 0
Interest-bearing..................... 2,509,707
Federal funds purchased and securities sold
under agreements to repurchase in domestic
offices of the bank and its Edge and
Agreement subsidiaries, and in IBFs:
Federal funds purchased.............................. 412,770
Securities sold under agreements to
repurchase........................................... 325,438
Demand notes issued to the U.S. Treasury 94,586
Trading Liabilities...................................... 80,731
Other borrowed money:
<PAGE>
With original maturity of one year
or less.............................................. 43,408
With original maturity of more than
one year............................................. 0
Mortgage indebtedness and obligations
under capitalized leases................................ 38,288
Bank's liability on acceptances
executed and outstanding................................ 20,189
Subordinated notes and debentures....................... 225,000
Other liabilities....................................... 413,450
Total liabilities.......................................17,037,402
Limited-life preferred stock and
related surplus......................................... 0
EQUITY CAPITAL
Perpetual preferred stock and related
surplus................................................. 0
Common Stock............................................ 185,000
Surplus................................................. 1,758,098
Undivided profits and capital reserves.................. (422,295)
Net unrealized holding gains (losses)
on available-for-sale securities........................ 0
Cumulative foreign currency translation
adjustments............................................. 0
Total equity capital.................................... 1,520,803
Total liabilities, limited-life.........................
preferred stock, and equity capital.....................18,558,205
</TABLE>
I, Gerald A. Ronning, Exec. Vice President & Controller of
the above-named bank hereby declare that (Name and title of
officer authorized to sign report) this Report of Condition
has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve
System and is true to the best of my knowledge and belief.
/s/ Harold A. Ronning
Signature of officer authorized to sign
report
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been
examined by us and to the best of our knowledge and belief
has been prepared in conformance with the instructions
<PAGE>
issued by the Board of Governors of the Federal Reserve
System and is true and correct.
/s/ James H. Cleave
Director
/s/ B. J. Kennedy
Director
/s/ Henry J. Nowak
Director
